Not so lucky?

money frown faceLast Friday the Schenectady County DA offered William Rivenburgh a plea deal -- two years in prison -- on drug charges. It's not really a notable story except for the fact that only three years ago Rivenburgh and his wife won a million dollars from a scratch-off lottery ticket. Now, they're broke and accused of selling cocaine.

It's quite a contrast from November 2006. From a TU story at the time:

It's not the kind of windfall he can retire on. But it's just enough to take the pressure off. Besides home repairs and bill payments, he will invest some of his winnings in stable accounts. It will be a good supplement to his annual salary, which is about $50,000, depending on how much overtime he picks up.

As it happens, the Rivenburghs' story is just the latest in a long line of lottery winner woe.

The web is full stories about people winning the lottery and going broke. A guy who won $315 million in a 2002 Powerball lottery told ABC News a few years back that he felt like the score had cursed his family and "I wish I'd torn that ticket up." (ABC didn't say whether the man had played 4 8 15 16 23 42.)

Research on the subject has found that people don't necessarily end up that much better off after a win. A study from the 1970s found that lottery winners weren't any happier than a control group (money can buy many things, happiness might not be one of them). And a recent working paper based on data about Florida lottery winners reported that a lotto score often just helps a person headed for bankruptcy postpone going broke -- not prevent it.

But a 1987 study of 576 winners found "overall, winners were well-adjusted, secure and generally happy from the experience." A study published in 2005 found that Britons who won moderate amounts (up to $200k) did "go on eventually to exhibit significantly better psychological health."

Comments

If anybody reading this ever has the misfortune of winning, I'll shoulder the burden of the cash for you.

I love the LOST reference! Huge fan.

I can see how winning the lottery would be more of a curse than a blessing. Picture this - you've been dirt poor all your life, then all of the sudden you've got tons of money. You have no idea how to control yourself. You can do just about anything you want. So, you start pissing it away on anything and everything, and next thing you know, you're flat broke. I can totally understand how it happens.

I think a lot of it is poor financial planning/execution. It can be hard to say no to family and friends that ask you for a little bit of cash, since you figure "Well, I did just get all of this for free..."

Personally, if I were ever to hit it big, I'd be off to a planner and pocketing it away to collect some nice dividends somewhere so I'd know it was somewhere, but not really have it at my immediate disposal. Then again, I don't really play the lottery, so I'd probably have to start...

@Albany Jane: Your comment reminded me of a guy who won $85 million a few years back -- he seemed to have the right approach:

http://money.cnn.com/2007/02/20/magazines/fortune/lottery_winnings.fortune/index.htm

4 8 15 16 23 42

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