Posted on 09/12/2010 11:09:58 AM PDT by jakerobins
I stumbled upon a fascinating academic article called, “The Ticket to Easy Street? The Financial Consequences of Winning the Lottery.”
It was written by three economics professors, Scott Hankins from the University of Kentucky, Paige Marta Skiba from Vanderbilt University, and Mark Hoekstra from the University of Pittsburgh.
The professors were not just looking to learn the habits of lottery winners. They were searching for the answer to a much larger question: “Whether a bailout will have a permanent impact or whether it will merely postpone financial pain.”
In other words, does throwing money at people solve financial problems or just push those problems down the road?
The paper gives empirical proof of two things that I’ve been saying for a long time: 1. Bailouts don’t work; and, 2. People who get large sums of money run through it in five years or less.
I am starting my 28th year in the structured settlement business. I have written a book about lottery winners. I’ve seen people blow huge amounts of cash.
The professors came up with an ingenious and comprehensive method for their research. They obtained a list of winners of the Florida lottery Fantasy Five lotto game from April, 1993, to November, 2002.
They compared those names to Florida bankruptcy records to see how many of the winners filed bankruptcy and when.
Filing bankruptcy means a person has completely hit bottom. You wouldn’t expect that to happen to a lottery winner. Yet it does. Over and over again
(Excerpt) Read more at richmondregister.com ...
Their article could have been exprsesed in a well known, four word axiom: Easy come, easy go.
.. a lawyer, an accountant, security guards... snicker... hehehehe
Guess this answers the riddle.....”what has five balls and screws people?”
Let me answer that without reading the article.
Yes, bailouts are like winning the lottery!
The SAME people who created the problems will bet the money and make the situation WORSE. They will REPEAT the SAME MISTAKES and require MORE MONEY and NEVER SOLVE the problem. They will continue to exasperate the problem and make it WORSE with MORE MONEY, FROM YOU, the taxpayer.
It's just a spending spree for liberals to use to throw at fellow liberals and make the liberals, “rich”. In short, YOU who get the bill for it are screwed AGAIN and AGAIN and AGAIN. Of course all this funding is in the name of “compassion” and “making life fair”.
Slightly off topic, what about the talk of paying reparations for slavery?
If we ever did pay reparations for slavery, isn’t it likely that those receiving such payments would not manage the money wisely, and would end up poor again, similar to these lottery winners?
I know a couple who won the lottery. They have given a nice chunk to our church and pays the grandchildren’s catholic school tuition. They have not changed to much to me. They still live in the same modest home and drive the same reasonable type cars. They won the money in the 90’s. Again the media going against anybody that has a bit of wealth.
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I wouldn’t mind the opportunity to see how quickly or otherwise I could go through a few million! If I went through it in under 5 years it will have been 5 years to remember.
Mel
It drove her nuts, because all the relatives came out of the woodwork - not 'requesting' things, but demanding.....including one from an uncle she didn't even know; he needed a heart transplant, and now expected her to finance it.
” The professors’ paper refers to a 2007 study in the Journal of Political Economy, where it was determined that although “consumers initially used federal rebate checks to reduce debt, eventually debt levels returned to pre-rebate levels.”
....... notice that was just 1 year into the democrat controlled congress
At 3 million and current interest rates I don’t have to change my lifestyle and just live off the interest.
I really don’t understand how people can clear through double or triple digit millions and have nothing to show for it five years later.
Garde la Foi, mes amis! Nous nous sommes les sauveurs de la République! Maintenant et Toujours!
(Keep the Faith, my friends! We are the saviors of the Republic! Now and Forever!)
LonePalm, le Républicain du verre cassé (The Broken Glass Republican)
I could see that happen. If I won the lottery, I would immediately get a financial counselor and lawyer and make about 10 trusts so that it would be impossible for me to dole out the money to people who beg. The trust would go to my Mom, my four kids, my brother and sister. My wife and I would have what is left. My brother and sister would have to figure out how to give some to my nephew and nieces. Of course both are married so they would need some of it for themselves too. I guess I am looking at the 1 billion area of my winnings....lol.
Brilliant analogy.
That’s a great example. It shows that money is just a tool -— its use reflects the character of the person wielding it. Some use it for good (John Huntsman) and others use it for evil (George Soros). The same with any item or task that requires judgment.
Someone with a modicum of financial education, long term thinking, and a sense of responsibility who isn't concerned about having a bunch of expensive 'toys' can turn a winning lottery ticket into a lifetime of financial freedom for themselves and their families.
Riley's Rule of Sudden Wealth:
'If you weren't my friend when I was broke and needed your friendship, then you can kiss my posterior when I strike it rich.'
If you study the subject you’ll find slavery reparations have been offered and given many times, going so far as to establish the nation of Liberia for exactly that reason. Funny, regardless of all the money and opportunities and apologies given, such are forgotten and the demands & squalor remain.
Throwing money at bad policy does no good.
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