I don’t think I’d be capable of blowing that much money. Even buying everything I’d ever dreamed of, I don’t think I’d even get through the interest - and that’s including things like armoured vehicles.
I *could *pretty easily blow it in 8 years. I wouldn’t though.
There’s a book called Secrets of the Millionare Mind that says pretty much the same thing. If you’ve always thought like a poor person, you figure out little strategies to keep yourself poor. That’s why poor people who win the lottery nearly always end up poorer than ever within just a few years. And people like Donald Trump can lose everything and get it all back in just a few months.
That may have been the one I was thinking of. My memory is not what it was in my youth.
Maybe that other book says it too. They sound pretty similar.
Youth, like money, is wasted on the young.
I’ve heard of people blowing their millions on booze and drugs but for criminy’s sake, how much do booze and drugs cost? How drunk and stoned can you be? You can’t be drunk and stoned all the time on $200K/year?
I am an acquaintance of a lottery winner and a friend-of-a-friend of another. I’ve never seen any evidence winning the lottery does anything good for people. Most people don’t have the knowledge to deal with that sort of money. It’s almost a job, figuring out how to manage it effectively.
I used to know a couple of guys that were good friends with a guy who inherited a fortune. Great guy, they said. Would do anything for you. Wouldn’t let you pay for your own drinks or food or car. He had your back.
I wonder how long he stayed wealthy. If not long, I wonder how many friends he lost when he became poor.
That statement is widely believed, but appears to be media selection bias.
If you look at the PDF linked from this page, the data indicates a bankruptcy rate of less than 5% over five years (despite the headline). Now, it would be nice to find data over longer than five years (I’ve only found unsourced summaries, but they claim less than 8% over a lifetime), and of course it’s possible to return to poverty without bankruptcy (although maybe not for someone who can blow millions in a five years) – but it’s pretty clear from this data that “nearly always end up poorer than ever within just a few years” is overstating it. It doesn’t directly follow from my cite, but based on that data, it seems a reasonable conclusion that a majority–and maybe a large majority–of lottery winners manage or find someone to manage their money in at least an “acceptable” fashion for maintaining it.
It’s basically the shark attack/stranger child abduction/mad cow/home invasion/vaccination reaction syndrome: you take a very rare phenomenon and report every instance of it widely, and it suddenly appears a lot less rare, especially when the news reports are from worldwide or a large source population.
This is the kind of thinking that leads to where he landed.
Those of us who have never had it can’t imagine spending it - because we don’t really understand how easy it is to spend. I’ve never had it myself, but I worked in entertainment business management for three years, which means my daily job was to pay the bills of people who had money, whether new or old, and you would be blown away to see how fast, how easily millions of dollars can be spent. You do not have to buy castles and jets, nothing like it.
It’s hard to do the adjustments for time periods, but when I first went to work in that business, I was earning a monthly full time salary as a trainee on the computer doing data entry, of $900. It was, I think, 1984. The first time I entered checks into the computer, I entered a check to a clothing store on behalf of Toni Taupin, Bernie Taupin’s then-wife. (Elton John, Bernie Taupin?) It was for a dress. Not a gown, a dress. A dress she could wear out to dinner on a normal night to a normal restaurant.
It was for $900. My salary for the month. One normal dress.
I paid the bills for a famous sports figure who had a job doing commentary on TV. He made 1 million a year at that job. In 1984. Hardly chump change. And he was always scrambling to get the bills paid, because just the maintenance on his wives, kids, houses and toys ran to 100,000 plus monthly. That was his NUT in 1984, no extras.
So don’t kid yourself.
Actually, I’d be very interested to see some sort of detailed follow up on the lives of lotto millionaires. Anyone know of one? Surely they can’t all be unappreciative wastrels?
Interest rate, probably. But its actually pretty easy to make that in dividends in a diverse portfolio of fairly safe stocks. I’ve been investing in dividend stocks since the last market crash - I don’t buy anything (for the dividend portfolio) that doesn’t pay less than 4% in dividends and isn’t a respectable firm.
There was a documentary on C4 a few years back. Most of them that appeared on it were what you describe; but I think that’s probably a self selecting sample.
“When you give nine million pounds to a 19-year-old what do you think is going to happen?” saith Carroll. I’d say that depended on the nineteen-year-old - some of ‘em, dare I say including me, would have considered listening to the team of advisers and tried to work out a way of living a lifetime of moderately-rich idleness for the next sixty years. I’m guessing ol’ Mike didn’t listen for a minute and was probably too innumerate not to realize that 9,000,000 and infinity aren’t functionally identical. Poor sap. Still, there’s still the ghost-written autobiography and the film deal to fall back on, so he’s not on his uppers yet, surely.
He probably just wasted the rest.
I think a relevant aspect of this is that people who win the lottery are typically people who play the lottery. And playing the lottery is an indicator of poor money management skills.
At 19?
I had already been working a real world job since I was 16, had emancipated at 16 and was simultaneously working and attending high school. I had a savings and a checking account, and if I had gotten that kind of influx of money, would probably have done what I did with most money I got windfall at the time - stashed most of it in the savings account and blown 10% on fun.
Hey, I knew that you should save money, but you should also budget for some fun, it had been written about in a readers digest article, that people on tight budgets should take and allot a small amount of money in the budget to fun so you don’t feel deprived and do something stupid like spend all of your savings.
Even today, I think that no matter how much money we had, our regular daily vehicle would still probably be a VW - we would of course buy something like a Jensen FF simply for the fun factor, but how much car do you really need to schlep to the grocery store anyway?
I can see how it happens.
I bet a lot of people quickly tire of idleness and decide to start businesses. They open that nightclub or whatever that they’ve always dreamed of. But without good management experience, I bet those businesses lose money like crazy.
Another factor is that it’s going to change ALL of your relationships, and probably not for the better. Even the most loyal friends are going to be touched by greed and expectations. You may well find yourself in a situation where you have to shell out plenty of money just to avoid social isolation.
The thing about some of the fancier toys people buy is that they have more expensive upkeep. I was watching that one show on VH1 that’s all about the lifestyles of the rich and famous (that’s close to the exact title, I think), and the cost of upkeep on the palaces these people owned was un-freakin’-believable. Literally millions of dollars go into these places, probably spent on hiring people like gardeners and maids, and the very specific equipment needed for very specific purposes. Not to mention the fact that once you realize you can buy more expensive versions of everyday stuff (like the $900 gown Stoid mentioned), you’re not going to want to go back to the cheaper stuff you used to get. By and large, there’s a reason most cheap stuff is cheap.
If I got that kind of money, I would most definitely need that financial adviser. I’d want to get, say, a new computer, and pay for grad school, but I’d need to stop myself from getting carried away and playing the “I want it, I get it” game.
And I probably wouldn’t even quit my job. Sure, it’s not the best-paying gig in the world, but I actually like it, and I’d have to do something with my time.