It’s a disappointing trend. Yet another lottery winner who has lost his winnings and is now back to living the lifestyle that he had prior to winning the lottery in the first place.
Andrew Cicero used to be a security guard. He won $5.5 million in the Wisconsin megabucks lottery. He started out with annual payments of about $98,000 per year but ultimately sold off his payments for about $2 million in a lump sum. He took that money and invested it in a Smith-Barney account with the help of some financial advisers. Unfortunately it was the height of the dot come craze and the advisers had him heavily invested in tech stocks. We all know what happened after that. He lost heavily.
Andrew also didn’t realize that taking the lump sum had tax implications and the IRS hit him for over $200,000. Now Andrew is down to just about a pension and social security. From the article it sounds like he isn’t destitute, but he’s certainly a far cry from being a wealthy lottery winner.
I’d just like one chance to handle a chunk of winnings from a lottery. I know that, with basic personal finance skills, I could responsibly invest the money for the future like Brad Duke did.
Amazing. Ther’s proof that no matter how much money people make or have, some will end up broke and some will end up ok. Most PF Bloggers wouldn’t even need to win big money to be set for life. With just $1,000,000 invested wisely, you could be set for life in 15 years or so, even if you had no other savings.
Lottery winners should be forced to take the annual payments rather than lump sum. By the mere fact that they play the lottery, they are bad at managing their finances (I know this isn’t always the case, but it is a fair generalization). Why let them handle that money themselves.
Yea, sometimes people are so scared they won’t be able to spend all the money. lol!
If you can’t manage $40,000 per year well, then you won’t be able to manage $98k per year well, and you sure won’t hold onto a windfall like the one our hero above received.
One of those Immutable Laws of Finance, I think.