Arizona Lottery winner shows what not to do with $6.7M

Jul 18, 2006, 12:30 pm (21 comments)

After the Big Win

Winner: Shefik Tallmadge.

Year: 1988.

Jackpot: $6.7 million, $335,000 each year for 20 years.

When Tallmadge was 29, he became the biggest winner in the Pick lottery at the time.

He bought a $60,000 nougat-brown Porsche 911 Carrera convertible the day he got his check, quit his $10.75 per hour job at Yuma Proving Ground and took his mother and his sister on a luxurious world tour to Honolulu; Bangkok, Thailand; and Sierra Leone.

Tallmadge transferred from community college to Northern Arizona University and completed a degree in political science. He met and married a pharmacist from Yuma. They moved to California, bought a house on the beach in Encinitas and then a huge house in Escondido.

But Tallmadge soon got into trouble with his California taxes. He moved to Florida, which has no state income tax, and bought another beach house. He tried out law school in Michigan but came back to Florida after the birth of his second child to be a stay-at-home dad.

In 1998, he decided to cash in the rest of his lottery payments through a private company, buying an even bigger waterfront home and investing millions in four Shell gas stations.

But his stations quickly began losing money. He had to sell Porsche No. 7 to stay afloat and the house on the beach. By 2000, Tallmadge had sold or given up his gas stations.

He lost more than $2 million of his lottery winnings and filed suit against Shell for practices that he says were aimed at muscling independent operators like him out of the business. He settled in 2002 for pennies on the dollar for his emotional distress.

Last year, while battling the Internal Revenue Service over back taxes on his lottery winnings, he filed bankruptcy to save the smaller house he had left. He is a stay-at-home dad again and plays the Florida Lottery every week, betting on those same numbers that struck it big in Arizona.

"I entered into the big shark pool, and I was the little minnow," Tallmadge says of his lottery experience.

"The lottery did change my life. What I did with it afterward was the problem."

Arizona Republic

Comments

Fibonacci's avatarFibonacci

At least he was sensible enough to get a degree from a fairly decent school....

You go boy...He is now 47 or so...and can still earn 7 million over the rest of his lifetime even in a wage earning job

He could probably still finish law school....and increase his earning potential...

He lived well but you cannot escape the time-honored maxim: easy come, easy go...

If he was spending hours studying systems as we do on Lp it would be different...

That would be reward for work done

 

bellyache's avatarbellyache

It does look like he lived well for a few years, but he might still have some of that money if he didn't buy so many cars and houses.

frbl

It does look like he lived well for a few years, but he might still have some of that money if he didn't buy so many cars and houses.

I'm sure it's been said elsewhere here before - cars are almost always a bad investment - they depreciate and usually very quickly.  Some do maintain their worth or even gain - but there is still a lot of maintenance costs to boot.

Houses, on the other hand, may or may not appreciate - but they would seem to be the better bet - especially over the long run.  Still, multiple homes also mean increased maintenace, insurance, etc.

I do like that he tried to do constructive things with his money - education and running his own business.  But perhaps he should have checked out the gas station business first.  I know someone in that business and the "little guy" often gets screwed by the big corporations - and then they are the face the public screams at because of high prices.

 

 

justxploring's avatarjustxploring

Just because this man claimed bankruptcy doesn't mean he's broke. I wish I had listened to an attorney many years ago and claimed bankrupty when I moved here, but I was brought up to pay my bills. Florida is one of the few states with a Homestead Act that puts no limit on the value of your home when filing for personal bankruptcy.  It's always been common practice for millionaires to move to Florida, buy a mansion on the beach, and file for bankruptcy while hiding money in other places. (remember O.J. ?) The new bankruptcy laws are Federal, but they are designed to prevent some of this fraud. I'm not saying Tallmadge committed fraud, but if he owns a home on the beach in Florida, he still has a net worth of over a million, more than most of us.  Also, this man is married to a pharmacist. Depending on the degree, experience and location, the salary in the United States for a pharmacist ranges from a low of $68,000 to start to over $100,000 according to several sources. He has a house on the beach, a wife who makes a good living and he's a stay-at-home Dad. Doesn't sound as if he's suffering too much IMHO. 

Just6ntlc

I'm disappointed that he went into bankruptcy. Next time if anybody wins a jackpot, they should spend it wisely!

ChazzMatt

"Jackpot: $6.7 million, $335,000 each year for 20 years. "

He won back in 1988 and declared bankruptcy due to business problems with his gas stations in 2005.  Him declaring banruptcy had nothing to do with his lottery winnings.  His lottery winnings allowed him to try to play a "bigger" game -- the business world. 

Howver, he seems to have a weakness for bigger and bigger beachfront homes.  He won $6.7 million and acted like he won $100 million.  Also, 10 years after he won (1998) he cashed in his winnings with a private company.  THAT is when his problems began.  He had no annuity as a cushion for bad investments.  Instead, he should have been living off half the money and investing the rest in stocks, bonds, annuities -- so that when the 20 years was up the revenue stream would continue!  And stop buying so many cars and houses. 

"He had to sell Porsche No. 7 to stay afloat."

You can only drive one at a time.  :)

psykomo's avatarpsykomo

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PSYKOMO 

Chamillionaire

$6.7 million is not that big of a jackpot to be doing the things he wanted to do so he paid the price for it. 

The odds of winning the lottery are bad enough, so if you do play make it worth it, make sure the cash value of the jackpot is a good $20-$30 million atleast 

ChazzMatt

$6.7 million is not that big of a jackpot to be doing the things he wanted to do so he paid the price for it. 

The odds of winning the lottery are bad enough, so if you do play make it worth it, make sure the cash value of the jackpot is a good $20-$30 million atleast 

So you are saying don't play until the cash value is at least $20 million (aprox. $40 million jackpot)?
I don't agree with that. Even $10 - $12 million is worth the dollar ticket!  But if you win a few million (this guy won less than $7 million) -- just thank the Lord and don't go crazy.  If you don't screw it up, you've got a nice retirement and then before that a comfortable lifestyle.  But, you aren't RICH.  Some CEOs make that in one year,  many movie stars make $20 million or more per film and they 2 or 3 films per year.  So, don't go trying to buy a dozen Porsches like you are Jerry Seinfeld (he's a big Porsche fanatic).  You aren't in that league.  God blessed you once with a few million -- now take care of it!  Make it last, even make it grow some, but don't go crazy thinking you are some smart businessman.  Know your limitations -- and be thankful you don't have to work in the factory anymore.
DoctorEw220's avatarDoctorEw220

$6.7 million is not that big of a jackpot to be doing the things he wanted to do so he paid the price for it. 

The odds of winning the lottery are bad enough, so if you do play make it worth it, make sure the cash value of the jackpot is a good $20-$30 million atleast 

Remember that back in 1988, $6.7 million meant more to people than it does today.

CASH Only

He screwed up when he bought that ticket. There was no such thing as a cash option 18 years ago.

Uff Da!'s avatarUff Da!

He screwed up when he bought that ticket. There was no such thing as a cash option 18 years ago.

So you are saying he would have been better off if he had never played and won at all.  I don't think so!

justxploring's avatarjustxploring

He screwed up when he bought that ticket. There was no such thing as a cash option 18 years ago.

So you are saying he would have been better off if he had never played and won at all.  I don't think so!

 

Oy gevalt!  Don't encourage him.  LOLSmash

DoubleDown

He screwed up when he bought that ticket. There was no such thing as a cash option 18 years ago.

That is your opinion and you are certainly entitled, but I seriously doubt you have anyone that shares your view, especially the winner.

...DD

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