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Lottery winner lost money after investing funds

Topic closed. 63 replies. Last post 7 years ago by Littleoldlady.

Page 3 of 5
United States
Member #83352
December 5, 2009
223 Posts
Posted: January 22, 2010, 11:01 pm - IP Logged

Isn't this the kid who was on one of those Lottery curse TV shows or something?...If its him, it showed him at the stock exchange wearing a high priced suit. When I seen him on TV, I said to myself that this kid is doomed. No real basis behind it, just a feeling. Hope i'm wrong though. Seems like a good kid...

    United States
    Member #83352
    December 5, 2009
    223 Posts
    Posted: January 22, 2010, 11:04 pm - IP Logged

    why are there no dates in this article?

      four4me's avatar - gate1
      United States
      Member #1701
      June 18, 2003
      8365 Posts
      Posted: January 22, 2010, 11:20 pm - IP Logged

      why are there no dates in this article?

      he won back in July - 07 i think.


      Big John says. You don't hit the number. The number hits you!!!!

                     I'm not Big John, I'm Four4me, Big John's a friend.

        United States
        Member #67052
        November 15, 2008
        80 Posts
        Posted: January 23, 2010, 2:23 am - IP Logged


        A lottery winner deciding between choosing a Lump Sum vs Annuity like investing in stocks, bonds or planning retirement plans,  is not one size fits all.  Some people may be better with an annuity.  Maybe  they have not been successful with money matters in their past or are reluctant about having to plan  large sum of money at one time, etc.

        Lump sum may be preferable for those interested  investing over the long term or living off the interest and re-investing part of interest.  A Good Financial Advisor assesses the clients risk leve, what they want the money to do for them, etcl then recommends strategies for savings, investments, spending plans, etc.


        My personal choice for a lottery win would be Lump Sum payment. live off of 1/2 or 1/3 of the interest and re-invest the other portion of interest.  Money invested doubles every seven years.  I'd risk Investing rather than annuity payments.

          Nino224's avatar - Lottery-013.jpg
          United States
          Member #62793
          July 9, 2008
          673 Posts
          Posted: January 23, 2010, 3:02 am - IP Logged

          This kid was on TLC's Lottery Changed My Life. He was going on and on like he'd won 100 million. I have a feeling he'll be broke by the time he's 25.

          The stat about 70% of winners ending up broke can't be right.

          "...a chance to push everything aside, the circumstances that've controlled our lives, and do it our way now. Good, bad or otherwise. You'll maybe get lost in it, tied up in it a little bit, but if you work your way through that the real you shows up, I think. Maybe what's at your core deep down, maybe that comes out. Maybe that's what it's about." Mike Pace 

            savagegoose's avatar - ProfilePho
            adelaide sa
            Member #37136
            April 11, 2006
            3301 Posts
            Posted: January 23, 2010, 3:40 am - IP Logged

            interest on savings in USA 3.8% then there is the whole will my bank fail? when can i get my money ?


            $330k sure isnt retire early, not a care in the world amount. at 3.8% thats $12.5k a year. dunno how thats taxed, but anyone here think of retiring on $12k a year?  hes still got 330k and a degree, just dont tell your prospectivbe employers you won the lotto. 

            good luck kid

            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

              dopey7719's avatar - Lottery-049.jpg
              Midlands, SC
              United States
              Member #69698
              January 14, 2009
              303 Posts
              Posted: January 23, 2010, 6:30 am - IP Logged

              Judging by my weakness for giving in to family members that need to "borrow" money when I don't have it to loan out in the first place, I would take the annuity option.  It's safter for me because then I can say sorry, I only get a check once a year and I've got to live off of it...no lump sum in my bank account to give you money. 

              Plus, judging by my fiances at the moment and in the past....I'm playing it safe....money just goes too darn fast for me and I'd be severly depressed 5 years down the road looking back at how I blew 1 million or more in a short amount of time because I had it all handed to me at once.  So for my sanity...I'm taking the annuity option.


                United States
                Member #171
                April 7, 2002
                181 Posts
                Posted: January 23, 2010, 10:20 am - IP Logged

                The problem is the stock market is a scam to take money away from retail investors, the average investor doesn't understand what goes on, and investing in individual stocks today is just like going to Vegas, it's a gamble, not an investment.  This lottery winner may have purchased good quality stocks, but lost money anyway to short sellers.

                Did you know that your broker lends your stocks out, without your knowledge, and then it is sold by the borrower, and then the borrower has to give it back to the broker in a certain amount of time, buying it back at the lowest price possible to return it and make money?  The individual stock owner wants his stock to go up, while the person (short seller) who borrowed it wants it to go as low as possible, and many things happen behind the scenes to force your stock price lower so the short sellers make money, then you panic and sell your stock when you see how low it went, and the short seller gets rich because he wiped out your stock value!  The worst thing that was ever put into place was 401K's, the short sellers robbed the middle class of their savings.  Barney Frank (Rep. Mass.) promised to regulate short selling after the market downfall, but nothing has been done so far.

                If you are an average retail investor, keep your money out of individual stocks until short selling restrictions are put in place by our government.  Short selling in not illegal, but immoral. With all this talk about Ponzi schemes, short selling is an outrageous scheme to con the average investor out of hard earned dollars and it should be outlawed, IMO.


                Example of short selling:  Borrowed shares from broker/indivdual stock owner of XYZ company are sold for -     $100.00

                                                        Stock price falls, borrower (short seller) buys it back to return it to broker -                  -  25.00

                                                                                                                                          Borrower makes profit-                     75.00



                  time*treat's avatar - radar

                  United States
                  Member #13130
                  March 30, 2005
                  2171 Posts
                  Posted: January 23, 2010, 11:08 am - IP Logged

                  With stocks, for every buyer there is a seller (and a commission collected from each).

                  When Trader Adam makes that "historical average of 10%", it is because Trader Bob has lost that amount; and each pays a commission when they buy and again when they sell, whether or not the trade is a 'win' or 'loss' to the individual.

                  CEOs on TOUT-TV saying they think their company's stock could go up another 30% ... meanwhile they're selling. BS
                  (Sure they might go to jail, later, but the folks who lost money don't get it back)

                  Commentators promising that things are "fine" at a company that goes bust within a week. Crazy

                  Going to the casino can be fun and profitable; just know that it's a casino and the money to pay the winners (and the house) comes from the losers. Wink

                  In neo-conned Amerika, bank robs you.
                  Alcohol, Tobacco, and Firearms should be the name of a convenience store, not a govnoment agency.

                    Litebets27's avatar - power
                    United States
                    Member #10465
                    January 14, 2005
                    6065 Posts
                    Posted: January 23, 2010, 11:15 am - IP Logged

                    At least when he graduates he won't have student loans hounding at his back.  Unlike many, he gets to finish college without all of the debt.  Good 4 him!!!  He will be blessed again...he's a good kid with a good head on his shoulders.

                    My daughter is a graduate of Towson University. Believe me, it would have been nice if she could have had that scratch off win while she attended Towson. Although, I doubt that she would have a cent left now. (she is the ultimate shopaholic)

                    At the time he invested, his mind was moving in the right direction. Trying to invest on his own, without professional help, while attending college is a big gamble. Too many things to concentrate on at once.

                    His best bet would have been to put it all awayin a safe place such as a bank, drawing interest until he finished school.

                    Feeling,  PRICELESS!!!Banana

                    Come on Jackpot!!!

                      United States
                      Member #80778
                      October 4, 2009
                      4 Posts
                      Posted: January 23, 2010, 11:27 am - IP Logged

                      Everybody wants to make a killing in the stock market.Remember slow and steady wins the race.When i win the lottery i'll put my money in index funds and conservative dividends stocks.


                        United States
                        Member #54390
                        August 17, 2007
                        313 Posts
                        Posted: January 23, 2010, 11:38 am - IP Logged

                        Wow, he lost alot of weight as well.  Lottery winners should be like this guy.  Unfortunately, many lottery players are low-income and received poor eduation so they blow it all away after they win.

                          United States
                          Member #23835
                          October 16, 2005
                          3475 Posts
                          Posted: January 23, 2010, 11:46 am - IP Logged

                          "One cant lose that which they do not place up for risk"

                          I guess you've never heard of inflation. Assuming you didn't lose money to  a fire or theft, over the past 20 year you still would have lost about 3% every year. That means that every dollar you "safely" saved by not investing 20 years ago would be worth about 55% of what it was when you stuck it in your mattress, and you'd have about a zero chance that it would ever recover. For those who think that "investing"  their money in a bank is safer, consider that in many years inflation was as high as the bank's interest rate. Then after that lets your money just break even for the year, taxes reduced the "earnings" so that you had a net loss in purchasing power.

                          "He started his investments when the stock market was doing good then when it went belly up he should have pulled his money out"

                          It must be nice to always be able to buy low, sell high, get out at the beginning of a downturn and get back in at the beginning of the upswings. In reality, you can't lose a dime unless you sell, or the stock truly becomes absolutely worthless. The market always goes up and down, but over the long haul it goes up. Selling early in a downturn and buying back early in an upturn is a great theory, but in practice it seldom works. In some cases, including this one, things tank so fast that a lot of the damage is done by the time you can make a rational decison.

                          "Can anyone tell me why they would put their money in the stock market, EVER? "

                          Sure. Warren Buffett can tell you.

                          "It is STUPID to invest in ANYTHING, market or otherwise that can turn down on a whim."

                          What's stupid is investing in something because you think it's foolproof. Anything can lose value.

                          "Another shocker is that the "financial advisor" quoted in the articlesaid you'd do better to take the annuity then to take the lump sum -I've never heard that before."

                          That's not what he said. He said that  most winners lose the money if they don't take the annuity. Of course many winners have sold the annuity on their way back to the poorhouse.

                          "No difference in betting on the Colts or Jets this week. In fact atleast with betting, I am always aware of my risk/return, not so withthe market.."

                          With any investment  you always know that the worst possible outcome is exactly the same as betting: you might lose all of your money. Unlike betting, though, the chances of that hapening are  far less than the roughly 50% chance with sports. Another difference is that the potential upside is huge, vs the doubling of your money that would be typical by betting on sports.

                          "When Trader Adam makes that "historical average of 10%", it is because Trader Bob has lost that amount"

                          That would be true only if the long term average value of a stock never changed. In reality, somebody making a profit on a stock simply means that the seller didn't make that same profit on that same stock. If a stock was worth $50 when it was first issued and is worth $100 the people who invested in it have an average net gain of 100%.

                          It sounds like this kid is in it for the long haul, and he's getting a good education. Odds are he's going to do just fine.

                            ca-dreamin*'s avatar - Lottery-065.jpg
                            United States
                            Member #70678
                            February 8, 2009
                            889 Posts
                            Posted: January 23, 2010, 11:48 am - IP Logged

                            Although I realize everyone is different I think his first mistake was to start giving some of the money away.

                            In the article he states putting the bulk of his money in the stock market which was his second mistake. Anyone who knows anything about the stock market knows it's a risk. If he had done his homework he would have put the biggest chunk in safer investments and/or hired his financial team to start with.

                            All in all I think he's still doing pretty good! Face it most 19 year olds would have blown most if not all of it before they realized it was gone. He still has a nice chunk to work with and hopefully can look forward to an early retirement in life.


                              United States
                              Member #171
                              April 7, 2002
                              181 Posts
                              Posted: January 23, 2010, 1:15 pm - IP Logged

                              The problem I have is the average investor doesn't understand what short selling is and what the actual  risks in the market really are.  If I bet on the JETS and know the spread, I know what has to happen in order for me to win money, unless the game is fixed.  Some people think the stock market is fixed and the odds are against the retail investor to make money, so we have three things in the market to cause an investor to lose money on individual stocks; company fundamentals going downhill, short selling, market manipulations.  I would suspect that most investors, like our young lottery winner here, know nothing about short selling, market manipulations, and are buying stocks based solely on company fundamentals.

                              The poster who made the comment regarding buying dividend paying individual stocks can purchase dividend paying mutual funds for an added element of safety, but not an Exchange Traded Fund which is traded like a stock during the day and can be short sold. I purchased two open-ended mutual funds when the market tanked in 2009, and I have done very well, they yielded over 30% for me in capital gains and monthly dividend checks in 2009, and I'm safe from the short sellers because the funds are priced at the end of the day, after the market close.  Even if some of the stocks in the fund were short sold during the day and their price per share went down, the loss to the fund wouldn't be so devastating like it would be to an individual stock because of the diversity of the fund. The funds I  purchased are tax-advantaged also, so I'm getting to keep more money from these investments from the tax man.

                              Don't forget, an added risk to any individual stock investment are the Exchange Traded Short Funds (2X and 3X bear), they will erode the value of individual stocks very fast, I would never own an individual stock again with the advent of these funds, and there are many more of these short funds coming to the market in the near future.

                              Warren Buffet may have made tons of money in the market, but don't forget, he was probably hedged against losses, the average investor usually isn't a sophisticated enough investor, or have enough money to pay for hedging strategies like short selling.

                              LETS GO JETS!!!!!!!!!!