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Lottery winner gets help on plan to turn good fortune into lifelong prosperity

After the Big WinAfter the Big Win: Lottery winner gets help on plan to turn good fortune into lifelong prosperity
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Richie Randazzo became New York's luckiest and most famous doorman last year when he scored a $5 million lottery prize.

The wisecracking 45-year-old from Gravesend, Brooklyn, became an overnight sensation, hitting the media circuit to tell his rags-to-riches story and enjoying a sitdown on Howard Stern's radio show.

But even after hitting the jackpot, Randazzo could not escape his troubled past.

For nearly two decades the one-time Park Ave. doorman had been a drug addict and, at one point, was homeless. He credits a stint in rehab for helping turn his life around 10 years ago.

"I remember very little of the '80s — it was just a blur — but I had a great time," Randazzo deadpanned before turning serious. "I never had goals. I had good direction, but I never took it."

Mindful of where he's been and how easily life can fall apart, the lottery winner said he's played it safe with his winnings so far.

While Randazzo no longer works — he got booted from his job at 1021 Park Ave. after skipping out to Atlantic City one day with his then girlfriend — he still lives in the same modest home, which his parents own. He said he has no major debts.

For a year, he made no major purchases: no waterfront home in Florida, no fancy watches. He just indulged in his first big buy, a $45,000 black Lexus for his parents. He's now considering getting dental implants.

Although it would be a fortune for most New Yorkers, Randazzo will tell you his winnings weren't all that big. Sure, his winning ticket in the lottery's Set For Life instant scratchoff game guarantees him at least $5 million. But the rules dictate that he gets a $65,000 check every three months, for the rest of his life. After taxes, he takes home the equivalent of $3,500 a week.

"There ain't that much money," Randazzo said. "I got the small stuff that fell off the sides of the Mega Millions."

He's turned down offers to buy his ticket in exchange for an upfront payout.

"My philosophy was to make no drastic moves," Randazzo said. "Pick up a bill, pick up a tab here and there, send mom and dad an anonymous check every once in a while, save for a few years and build some capital."

Given the prominent financial failings of many prior lottery winners, the Daily News offered to arrange for some professional guidance, and Randazzo accepted. A Money Makeover was set up with certified financial planner Charles Failla of Sovereign Financial Group.

The ex-doorman decided to bring an entourage — his parents, Cora and Frank Randazzo, who were visiting from West Palm Beach, Fla., and two longtime neighborhood buddies, Lenny Ferrara and Frankie Lavoti.

While Randazzo is guaranteed income, he has no hedge against inflation, Failla noted. As the years go by, his $14,000 in posttax monthly winnings will buy less and less.

When Failla asked Randazzo about his expenses, he said he needed $4,000 a month to get by. He quickly added another $1,000 a month for trips to Atlantic City. That means he could save at least $100,000 a year without changing his lifestyle.

That money should go toward investments that should grow and generate income, Failla said. "The goal is to take this cash flow and create wealth."

Randazzo told Failla he's considered buying a small business or franchise, but the planner cautioned against it because of the experience and time commitment required. If he wants to be an entrepreneur, Failla said, a wiser choice would be residential real estate.

"Real estate needs a lot less experience and is an easier business to learn," said Failla, who follows the strategy himself. "I have a condo I haven't walked into in a year and a half."

"That's a beautiful thing," Randazzo said.

Buying property — Failla recommended bargain-priced Florida condos — would provide rental income and tax deductions.

"Save a hundred grand and then start buying stuff," Failla said. "I would buy some stocks, but real estate will give you something stocks will not: a tax break."

Failla recommended an investment portfolio with 80% concentrated in real estate and 20% in stock and bond funds.

"Assuming your investments grow 6% a year, you will be a millionaire in seven and a half years, Failla said. "You are a millionaire waiting to happen."

After the meeting, Randazzo sat down with his parents and friends over lasagna and meatballs to talk about what he'd learned.

The session "opened my mind to other options; there is more to capitalize on. There is risk involved, but life is a risk," he said. Would he invest 80% of his savings in condos?

"Right now, no," he said. "Maybe in a year or so. The most successful people in my neighborhood own a lot of real estate."

"I think he should take his advice," Cora Randazzo said.

"Sure, she wants me to live next to her," her son said. "Who's she B.S.-ing?"

She would also like to see her single son who dated a Swedish model who danced at a lap dance club soon after he won get married.

"Why make one miserable when I can make more happy?" he told his mom. "When I meet her, I meet her."

Randazzo talked about other goals, which mostly involved him returning to the spotlight. He wanted to go on "Deal or No Deal" and give his winnings to the drug treatment center that helped him. He wants to inspire addicts with his story of recovery and believes his life would make a great book.

"There will be people who will try to take advantage of you," his mom warned.

"Richie is street smart," said his friend, Lavoti. "He will apply that to his earnings."

In the meantime, Randazzo will continue to take trips to Atlantic City, hang out with his buddies and ride his bicycle to Coney Island. He has plenty of time to think about how lucky he's been and how his luck could fade.

"What if I sell my ticket to a lending company? What if I buy something that is way out of my means?" he said. "This was given to me so easily, and it could be taken away."

News story photo(Click to display full-size in gallery)

Thanks to duce for the tip.

N.Y. Daily News

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23 comments. Last comment 7 years ago by mylollipop.
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United States
Member #61296
May 17, 2008
187 Posts
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Posted: October 6, 2009, 3:17 pm - IP Logged

I can pretty much guarentee that in 15 years this guy will be broke, probably less. But good for him..

    Littleoldlady's avatar - basket
    Clarksville
    United States
    Member #487
    July 15, 2002
    17638 Posts
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    Posted: October 6, 2009, 5:28 pm - IP Logged

    I wouldn't invest my money in florida condos  that for sure.If he wants to invest in real estate, he needs to do his REAL Homework.  He should buy him a house that he can generate income from such as a three story house in a nice neighborhood.  Rent out the 2 floors that he doesn't live in. the Florida real esate market is rich with scams and scam artists just waiting like fat sharks for a free meal.

    If you know your number is going to hit, have patience and then KILL IT!

    You never know when you will get another hit.

      rdgrnr's avatar - walt
      Way back up in them dadgum hills, son!
      United States
      Member #73904
      April 28, 2009
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      Posted: October 6, 2009, 5:58 pm - IP Logged

      I think this guy will be alright. He hasn't seemed to go nuts with big ticket items with his winnings so far outside of the Lexus for his parents.

      I think his biggest risk of certain failure will be if he ever goes back to booze and drugs.


                                                   
                           
                                               

       

       

       

       

                                                                                                         

      "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                  --Edmund Burke

       

       

        barbos's avatar - gold bar-and-cash1.jpg
        California
        United States
        Member #23908
        October 17, 2005
        122 Posts
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        Posted: October 6, 2009, 6:09 pm - IP Logged

             Sounds like the guy is trying to be smart just has too many plans for only $5M. less tax deduction.  If I win that much in California and don't move somewhere to Dakota or Wisconsin I probably will have to keep my job - after taxes and if I share a little to someone close and charities there would be only peanuts left over.

          jeffrey's avatar - moon
          Hamilton, OH
          United States
          Member #4162
          March 27, 2004
          277 Posts
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          Posted: October 6, 2009, 6:51 pm - IP Logged

          I can pretty much guarentee that in 15 years this guy will be broke, probably less. But good for him..

          Wow, I don't know where you get your crystal ball. Sounds like he is trying to be sensible. Just don't spend the cash, build wealth. Sounds like a decent plan. I know many people who have done well with rentals. Now is the time to get in; prices are very low. He may have a happy life. Best of luck and congratulations.

            TheGameGrl's avatar - character catafly.jpg
            A long and winding road
            United States
            Member #17084
            June 10, 2005
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            Posted: October 6, 2009, 8:51 pm - IP Logged

            True Jeffrey that now is the time to invest in real estate, but as the the story stated, its stil a risk. The safest risk I would take is with IRA or savings since its a low amount of 100k per year. No way would I soak the winnings into a shaky stock market . Been there done that and lost my shirt from that maneuver. Even local municpal bonds have a safe return over time. Sorry but I do not trust the market of stocks at this time.

            The guy did have his reckless behavior when he first won, they just gave it a mild gleem over. Sensible though that he is listening to a financial advisor. They have the degree and experience.

            ~~Is it true, Is it kind,Is it necessary. ~~~

            christmas holly jolly numbers: 255,303,6911, 474,477 silver:47,gold:79.

              psykomo's avatar - animal shark.jpg

              United States
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              May 30, 2004
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              Posted: October 6, 2009, 10:41 pm - IP Logged

              I can pretty much guarentee that in 15 years this guy will be broke, probably less. But good for him..

              GUY>>>>>>>UR>>>>>REALLY GREAT!!!!!

              PSYKOMO

                Avatar
                FL
                United States
                Member #77284
                July 19, 2009
                60 Posts
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                Posted: October 7, 2009, 2:21 am - IP Logged

                all this talk about real estate... sigh.

                 

                if you really wanted to get in, you should have got in 7 months ago when there was blood on the street...

                just look at the housing inventory these days... most worthy foreclosure prop. have been all gobbled up and the price has actually increased 6-7% in fl from the lows.

                 

                and during the height of the credit panic, you could have picked up great properties for less than 0.50 on the dollar.

                 

                now it's too late.

                 

                and never by a condo. HOA and maintence fee is too high of an overhead cost to be worthwhile. and the appreciation rate for condos in FL have always lagged behind residentials due to lack of demand that is seemingly elastic.

                  Avatar
                  California
                  United States
                  Member #80929
                  October 7, 2009
                  94 Posts
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                  Posted: October 7, 2009, 12:36 pm - IP Logged

                  Wow, I don't know where you get your crystal ball. Sounds like he is trying to be sensible. Just don't spend the cash, build wealth. Sounds like a decent plan. I know many people who have done well with rentals. Now is the time to get in; prices are very low. He may have a happy life. Best of luck and congratulations.

                  In my opinion, Richie Randazzo has already made 1 BIG mistake:  he didn't keep his newfound fortune to himself.  He didn't go to a lawyer and create a "blind trust" to collect the money.  It is a HUGE mistake to tell others you have won the lotto.  It's an even BIGGER mistake to allow yourself to be interviewed by ANY media outlet and be photographed by them.  Now he wants to be on a TV show!  That is ridiculous!  He's going to have people coming at him from every direction asking him for money.  And remember, he lives in New York City, one of the most litigious
                  cities in the WORLD!
                    Every time I see one of these lotto winners show up in the news, smiling and holding one of those huge replica winner checks, I just want to hit them over the head with something.  Chair  If I ever won anything major in the Lotto and IF I ever wanted to tell anyone, I'd rather tell others through one of these Lotto web sites.  I prefer the anonymity of the Internet and my computer.  Hiding Behind Computer

                  In the story, the financial advisor states, with a 6% annual growth rate in real estate value, Randazzo will become a millionaire in 7.5 years.  The problem is, from what I have read, real estate values will increase in value by 2-4%.  Also, because the FED is pumping out money, economists are expecting an increase in inflation.  Moreover, there was a recent news story of rumors the financial ministers of the other major economies met to discuss changing the trading currency for oil from the US dollar to something else!

                  $3,500/week is nice, but it really isn't that much.  I think what will happen is, all his money will be gone within 10 years.

                    savagegoose's avatar - ProfilePho
                    adelaide sa
                    Australia
                    Member #37136
                    April 11, 2006
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                    Posted: October 7, 2009, 1:35 pm - IP Logged

                    hey he made the 1st call about winning an annuity, that it isnt a lot of money. once the time is up he has to have something to live on after. good luck to the guy. there is 1 real estate deal he should buy and thats a place to live.

                    2014 = -1016; 2015= -1409; 2016 JAN = -106; FEB= -81; MAR= -131; APR= - 87: MAY= -91; JUN= -39; JUL=-134; AUG= -124; SEP = -123; OCT= -84  NOV=- 73 TOT= -3498

                    keno historic = -2291 ; 2015= -603; 2016= JAN=-32, FEB= +12 , MAR= -86, APR = -77. MAY= -48, JUN= -29, JUL=-71; AUG = -52; SEPT= -43; OCT = +56 NOV = -33 TOT= -3297

                      foragoodcause's avatar - Lottery-021.jpg

                      France
                      Member #49288
                      January 25, 2007
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                      Posted: October 7, 2009, 3:46 pm - IP Logged

                      He looks like he's in his 60's,i guess it's the drugs he used in  the past.He like to go to Atlantic city and likes attentions,my guess he will be broke in a few years.

                        lovinwinning's avatar - Lottery-008.jpg
                        Hiddenite , NC
                        United States
                        Member #77805
                        August 1, 2009
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                        Posted: October 7, 2009, 5:01 pm - IP Logged

                        I just like he's trying to be sensible . It's refreshing !

                        Happy Thanksgiving everyone ! May we all have something to be thankful for !! Big Smile

                          maringoman's avatar - images q=tbn:ANd9GcTbRxpKQmOfcCoUqF2FyqIOAwDo7rg9G-lfJLAALPGWJWwiz19eRw
                          Massachusetts
                          United States
                          Member #37433
                          April 14, 2006
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                          Posted: October 7, 2009, 6:26 pm - IP Logged

                          If I was him I'd try to get a job, or atleast his old job back. $5,000,000 after taxes is not a lot of money to a man his age, especially in high flying NY NY.

                          The last thing he should attempt is to go into business, businesses fail miserably and only after burning lots of money do people begin to earn profits. He could invest in high interest CD's or treasury bonds, which earn a small interest but are guaranteed by the banks or cities.

                            DC81's avatar - batman39
                            MI
                            United States
                            Member #54830
                            August 31, 2007
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                            Posted: October 8, 2009, 4:55 am - IP Logged

                            It's a minimum of 5M, there's no cash option and I'm quite sure New York doesn't allow for any sort of anonymity. Yes we made predictions about this guy being a future "lottery loser" but maybe he's finally got at least a little sense, his head on straight now and will be fine though granted continuing to put himself out there might not be the best idea, even if his winnings over all were "small" people out there don't care, they see someone has money they "didn't earn" they'll be out there wanting a piece.. Also going to Atlantic City could certainly end up being something that comes back and bites him he ever gets out of hand with gambling and as someone who's already admitted addiction in the past, it really might not be the smartest idea. Granted they're not the same type of addiction but it still seems like something that'd be a good idea to stay away from.

                            You can't predict random.