This man cleverly hid his face using the over-sized award check. Why would you want to remain anonymous? What are the downsides to winning the lottery? As we shall see, many.
A couple went on national television to tell the world they won the lottery. They are enjoying the publicity, but I suspect within a decade, odds are they will be broke and will regret playing the lottery. A staggeringly large number of big lottery winners end up broke. Even those who survive the financial perils often regret the whole process. Google it. I am sure you have already read many a story about lottery winners who went broke. The bankruptcy rate for lottery winners is double the national average. The divorce rate, four times. Why is this?
Well, to begin with, having a lot of money is a real responsibility. Even managing a small portfolio of say, a million dollars or so, requires some thought and work. A hundred million or four-hundred million is a full-time job. The fantasy that you can "go back to your day job" and life will go on just as before is just that - a fantasy. Your new day job is four hundred million dollars. It is a staggering responsibility.
The big problem, of course, is that everyone you've ever known will show up in your life and demand (not ask) for money. From the parasite point of view, you are "lucky" (and indeed you are) so you should "share the wealth" and give them some, otherwise you are being "mean". Even total strangers will show up at your doorstep, demanding cash and relaying sob stories about lost jobs, spouses, or whatever. One winner was pestered by people wanting him to invest in anti-gravity and perpetual-motion schemes.
So right off the bat, you have to change your phone number (unlisted of course) and move to a new home - in a secure, gated community. Your existing home will be broken into, before you can even sell it. If you are there, you may be beaten and abused, if not actually killed. Four hundred million dollars is a lot of money, and yes, desperate people will do desperate things to get at it.
If they don't kidnap you and hold you for ransom, they may go after someone you love or care about. A neighbor, a friend, a family member, or even your pet dog. And they will mail them back to you one piece at a time, until you cough up the money.
So, you'd better go about hiring a bodyguard or guards, for your new secure home. Most Billionaires have one - along with an armored limousine. Ask Freddie Heinekin. Not only are people now a nuisance, they are a real danger as well. Home invasion is a real possibility for rich folks.
Your life cannot be the same as it was before. You can't keep driving the Camry to your old job. Odds are, you will be fired or asked to leave, anyway. Your presence will be a disruption to other workers. And let's face it, with enough money in the bank to buy the company are you really going to take any shit from your boss anymore?
So what's the answer? Well, six States allow you to remain anonymous if you win the lottery, and if you live in one of those six States, that would be a very, very good idea. If not, consult an attorney - you will need one anyway, as we will see. It may be possible to set up a Subchapter-S corp or blind trust and claim the lottery winnings through such a vehicle and remain anonymous or at least semi-anonymous at best.
Ah yes, lawyers. Expect to get sued. Many lottery winners get sued, by former co-workers, family members, and spouses or ex-spouses. You see, with that much money on the table, people "suddenly remember" that the lottery ticket that you bought was actually part of the office "pool" or family "pool" and these folks want their share!
Some States explicitly eschew such verbal agreements with regard to lottery winnings (the Statute of Frauds requires that contracts for big-ticket items, like Real Estate, be in writing only). Other States are not so strict. You may be tied up in litigation anyway, and have to settle for substantial sums, just to make the other side's attorneys go away.
Anyone you've ever met, dated, employed, worked for, contracted with, saw at a distance, or occupied the same State with, will likely sue you on some trumped-up basis. They will claim to have slipped on your sidewalk, that you breached a contract, that you molested or raped them, or some other act of malfeasance. It isn't true, of course, but you have to spend $100,000 going to trial to prove it. Eventually you settle - and you move to that gated secure community where strangers can't slip on your sidewalk.
By the way, divorcing your spouse and not telling them about the lottery win is a bad idea. In most States, the punishment for failing to disclose lottery winnings is forfeiture of the entire amount to your ex-spouse. And yes, it has happened more than once.
The problem is, of course, like the recent lottery winners who are plastering their face all over the media, most winners are not very sophisticated with money. I know I certainly wasn't - and I am still quite a bit naive, which is why I started this blog. Going from paycheck-to-paycheck to near-Billionaire overnight isn't easy, if in fact it is do-able at all.
Many folks think that the amount they won is an infinite amount of money, so they give away huge portions, or buy friends cars or other expensive toys - or buy them for themselves. They build huge overpriced houses (that are worth far less than their construction cost) that are also drains on their pocketbook. Marshal Mathers, (the rapper M&M) built a huge mansion across the street from the trailer park he grew up in, so he could show his peeps he "made it." Of course, the house being located in a bad neighborhood, is almost worthless.
This happens all the time to rap stars and athletes. Inundated by money, they assume the pipeline is endless, while it is quite finite. Adding to this is the maintenance cost of a lot of white elephant items that people buy on impulse. A private jet sounds like a nice toy, until you realize the purchase cost is a just a down payment on the storage, fuel, and maintenance costs, not to mention the salaries of the pilots and attendants and other service people needed to own such a plane. A 300-foot yacht sounds like a swell investment, until you realize you need a permanent crew of 12 to keep it shipshape and sail it where you want to go.
Other winners, being given enough money to last several lifetimes, still want more. One fellow said that he wanted to "grow his winnings" even further, as if he could will himself yet more money (not explained is why he could not become a millionaire this way, based on his current income!). So many hire financial managers who, of course, want a piece of the pie themselves - and get it by churning accounts or other financial mismanagement. Huge amounts of money + financial naivety = opportunity for greed to rear its ugly head.
So, what's the answer to all of this? Smaller jackpots, of course. Winning a million dollars is enough to change your life, without ruining it. It might allow you to retire early, if you play your cards right. Anything above five or ten million, on the other hand, is going to destroy rather than enhance the quality of life of the recipient.
Second, anonymity of the winner should be guaranteed in all States. One reason names are published is to prevent fraud in the games - by preventing lottery employees from "winning" by forging a winning card. And yes, it has been done in the past - even with the Powerball. People will do crazy shit to get money, remember?
Plus, the lottery people love the smiling faces of "winners" with big oversized checks on television - it gets people to play more.
And sadly, this also negates my first idea. Large jackpots encourage people to play more. Let's face it, when the jackpot goes to a half-billion or more, you start to think about buying a ticket, right? And it makes no sense, if you think about it. $40 million or $400 million, it is more than you can spend in one lifetime, and the odds of winning are the same.
But alas, lotteries are the "poor man's 401(k)" (according to Jeff Foxworthy) and are "poor people's business" as someone recently reminded a "celebrity":
The poor resent it when mainstream America plays their game.
So, what prompted me to write all of this? Well, you guessed it - I won the Powerball. Quite literally. I matched only the powerball, which was 10. So I won a staggering $4 for my $2 investment. $4, not $4 Million or $400 Million. But... I doubled my money overnight!
Now, the only problem is, how to keep other people off my front lawn. Because you know they'll come a-knocking!
UPDATE: Even the military won't want you around if you win the lottery. Apparently, in the past, lottery winners in the military were given honorable discharges when they won the lottery. The military didn't want a millionaire in the ranks mucking things up and causing disruption.
