It is very likely that on more than one occasion you have wanted to win the lottery as this would mean the end of your existential and economic problems; however, as strange as it may seem, there are people who have had this fortune and years later, claim that it was the worst thing that could happen to them in life.
We have heard sad stories of lottery winners who in the blink of an eye they lost all the money they earned or else, they had a tragic end. But why is this happening?
Although at some point it was said that the National Endowment for Financial Education (NEFE) asserted that the 70% of the winners of a lottery jackpot end up in ruins, this data was denied by the same organization.
What is verifiable is that those people who receive or win money quickly, either thanks to the lottery or through an inheritance, they quickly lose half of their money in useless expenses or bad investments.
Figures collected in the United States corroborate that lottery winners are more likely to declare bankruptcy within 3 to 5 years. Similarly, other studies also show that sudden large sums do not prevent the ruin of the winners, but only postpone it.
Every lottery winner is different; however, there seem to be common elements that explain why the lottery is not the answer to our economic ills, quite the opposite.
5 reasons why a lottery winner ends up bankrupt
1) Lack of financial culture. It is no secret that, according to studies in England, the USA or Germany, the people who play the lottery the most have a lower cultural and economic level, therefore less financial culture and everything that this involves, such as what are good or bad investments, tax issues, among others.
2) Decision-making based on emotions. Having a lot of money in your hands can lead you to make decisions with your guts, that is, without you having processed them intelligently. To this we must add that many are blackmailed by relatives, friends and acquaintances who seek to take advantage of this situation.
3) The phenomenon known as mental accounting is ignored. Mental accounting refers to the value you place on money, based on where it came from and how you will use it. In practice, it means that we see the lottery as “free money”, not hard earned. For this reason, more is usually spent on unnecessary or luxurious things, than on cleaning up credits or making sensible investments.
4) Spending excessively. There is a very particular phenomenon in which you spend more the more money you have, since immediately, we get used to the good life and always want to have more, which automatically leads you to spend on unnecessary things, quickly running out of money .
5) Quit work without having an alternative plan. Abandoning your usual source of income without having calculated well that the lottery prize money will not last a lifetime is a great risk that can soon lead you to bankruptcy.
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