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The less flash, the more kept cash!

Published:

We were watching TLC last night when they showed the lottery programs.

When David Edwards came on my wife said he sounded likedecent guy. I told her people on LP said he was just like Jack Whitaker. She asked why so I looked on the net (couldn't remember exactly what he had done) and found this.

Considering all our threads here about "What would you do if you won $ _ _ _ million", this is well worth reading (my bolding, article on blue background):

David Edwards, another lottery loser

                                                                           

Don McNay

                                                                                                                 

"The world’s original hard luck story and a hard time losing man."

-Jim Croce

In light of increasing media cost consciousness, news outlets can save money by pre-arranging a "fill in the blanks" news story.

It would say:

Powerball winner ______________ is in trouble with the law again. This is the _____ time the jackpot recipient has been arrested.

There are reports that he/she has spent all of their money in _____ years. There have been ______ lawsuits filed against he/she and family members in the past year.

The media should have the story ready. They are going to use it over and over again.


The most recent chance to “fill in the blanks” came from Powerball winner David Edwards, who hails from Ashland, Ky.

Ken Hart at the Ashland Independent newspaper has written a number of articles about Edwards and his wife Shawna.

Edwards won a $41 million Powerball and took home $27 million in August 2001. Six years later, the money was apparently gone.

Edwards was evicted from his $1.2 million home in Palm Beach Garden, Fla., for not paying his association dues. Shortly thereafter, Edwards was evicted from a storage unit that he was apparently living in. The items in storage were auctioned to pay Edward’s storage fees.

His wife was arrested for not paying $17,000 in back child support. She was released and then arrested again. She missed a court date and failed a drug test.

You would think someone who won the lottery would get it right.

About a week after Edwards won the lottery, I watched him on television and predicted that he would run through all the money. He had every red flag for disaster. An out-of-work ex-con, Edwards immediately acquired an entourage and went on a buying spree. He was all over the media, and I remember him saying that he was going to meet with financial advisers.

If I had been Edwards’ financial advisor, I would not put it on my resume.

I’m not sure the best adviser could have kept Edwards from running through the money. There would have been several ways to try. Before Edwards started spending like a drunken sailor, an adviser could have placed some of the money into a trust and some into annuities that would have paid over Edwards lifetime.

It didn’t happen, and Edwards became another “shake your head” kind of story.

I saw Edwards on a show called “The Curse of the Lottery.” The show’s premise was that winning the lottery was a curse, not a blessing.

Receiving a life-changing amount of money is not a curse as long as the receiver takes steps to keep him or herself under control.

Most people have built-in controls on their finances. They work for a paycheck and pay their bills. They have a budget based on a steady amount coming in.

When people get “sudden money” from an inheritance, lottery or other source, they often don’t know how to handle it.

It makes them easy prey to family and friends wanting a “loan” and prey to temptation to spend on unneeded items.

There is a whole economy built around people who let money run through their fingers.


I’ve noted a ton of advertisements aimed at “helping” people spend their tax refunds. A tax refund is not manna from heaven. A refund means that the government took more money out of a person’s paycheck than needed. People should be saving that money for a rainy day instead of blowing it on a trip to Las Vegas.

If people can’t handle a tax refund, imagine what they would do with $27 million.

It is actually easier to handle big money than manage a small amount. With big money, there is a point where all your immediate needs can be met. You can buy a nice house and car and not have any debts. You can go anywhere you want and do what you want.

After that, everything else is just showing off.

It is the showing-off part that gets lottery winners into trouble.

The less flash they have with their money, the less likely they are to be part of a “fill in the blanks” media story.


Edwards is another lottery hard-luck story and a hard-time losing man.

Don McNay is author of the upcoming book, “Son of a Son of a Gambler: Winners, Losers and What to Do if you win the Lottery.”

 

 

We've had plenty of threads about remaining anonymous or not and some people say they'd want all the publicity they could get.

We've had threads about winning multi - millions and buying fleets of cars and mansions.  

The story above tells us that the less showing off people do with a jackpot win, the more likely they are to keep it.

This should be the mantra of everyone here.

 

Entry #35

Comments

1.
justxploringComment by justxploring - December 26, 2007, 1:21 pm
It's true that if you own your home without a mortgage and have no car payment or credit card debt, then you basically need to pay your monthly bills like insurance, utilities, food & gas. That can be a lot too, especially if you have medical bills. However, someone who wins the lottery should be able to manage all of his/her expenses without ever running into financial trouble. I am 100% positive that if I "only" won $500,000 (after taxes) today I would never worry about money again..aside from all of the banks going under and the FDIC failing to provide coverage.
2.
Coin TossComment by Coin Toss - December 26, 2007, 6:37 pm
Isn't that why the "big boys" have offshore investments?
3.
justxploringComment by justxploring - December 26, 2007, 6:53 pm
I know very little about offshore investments. This was discussed recently on a thread (or blog) I mentioned The Brothers in Costa Rica who were put out of business by the government after paying people 3% a month or more. The problem is that people who never took out the money were left with nothing and the the IRS began investigating. I know that we are still supposed to pay taxes on overseas investments, but I'm sure the very wealthy know loopholes. I don't know if it's still that way, but I remember years ago reading that the reason all the cruiselines register the ships in other countries is to avoid paying U.S. tax although all their business comes from U.S. travelers. For example, Carnival Cruiseline has its headquarters here in Florida, but it is "incorporated" in Panama. That saves the company about $400 million a year in income tax!   Why can't the rest of us do that?

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