After all the stories of previous lottery winners losing all their money within a few years, how do these people continue to make such bad decisions? The initial cost of the home is only a part of the expense of such a purchase since upkeep, utilities, and maintenance of such a property is more than the average worker in our nation makes in a year.
The first thing a lottery winner should do is hire an accountant and financial adviser. If they hired one and he or she advised that these purchases were a wise decision, then the winner should fire that person and find someone more intelligent and experienced in handling sudden cash windfalls.
What isn’t understood is that the wealthy have monetized their homes. That is why they can afford to live in mansions.
I would never advise anybody to buy a mansion, under any sort of circumstances. Buy a nicer home that is one step up from what you can normally afford and fix it up so it is optimized for your enjoyment, but stay away from mansions.
I think the problem with all ofthese folks is that they don’t have a financial plan for investment and capital preservation. If you had $1.2B after tax, you would think you would want to divide it 6 or 10 ways with different investment houses and let them know they are competing for some ill-defined combination of safety and capital growth. It’s a lot of money and if you only expect to spend something like 1-2% of the capital per year in having a good time while keeping the rest invested you should be able to have a great life and do just fine.
It seems that the first thing these guys do is buy things they want,but don’t need rather than get the funds into a diversity of places so it is safe and productive. And make sure say $100M or so is in absolutely safe places [is there such a thing anymore] like short term treasuries and/or gold and/or oil stocks or some such. So even if everyone else is a crook and whipes out your account, you still have a nice comfortable life ahead of you even you are now reduced to living on a mere $1M a year or something.
The first thing a lottery winner should do is hire an accountant and financial adviser.
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Actually, he should hire a few and split the money up among them. Then hire a top flight law firm and accounting firm to audit and oversee all of them.