For some of the people winning the ticket of lottery is something which is an incredible experience to go through. No one can expect to get so much of money by sitting on their home couch with just the piece of small paper.
Mega millions winners are assuming that they are having financial security for life and they don’t need to worry about paying the bills at all. But the windfall of this assumption is appealing but very clear because there are so many people who make their way into the lottery mode just to win handsome amount of money. And the luck is on the side of just few people.
But sometimes, matching the winning numbers can be a curse for so many people just like being a blessing. It has been reported that according to recent survey, one third of the lottery winners are bankrupt. Even those people who manage all their finances in an effective manner but still they lose at most of the areas.
It’s a sad reality that there are so many lottery winners who have lost their money and this make the whole lottery process even much more complicated.
Let’s get into the discussion of how do lottery winners go broke even if they win the lottery amount:
Almost every single lottery winner makes sure that they do share their winning amount with the family members and the closed ones. For them it is important to make their closed ones to be the happiest one. But sometimes, even your closed ones can become greedy once they get to know that you have now handsome amount of money.
Close acquaintances can somehow demand more and more money under such conditions which you cannot refuse at all. This put a certain pressure on you and you start spending more.
Tax Obligations Can Get Very Complicated
Obligation of Tax gets very complicated
Another reason due to which the lotto winners lose so much of money is because of the tax obligation which is a complicated process for them. They might start running into the debts because of some tax obligations.
Most of the countries will exempt the lottery amount to be free from the taxes. But in some countries, they charge the winner with the same tax which they charges over the ordinary person. This means that you have to pay a higher tax of maximum 45%. In United States, the condition is worst because they have their own taxed in which the winner has to pay the double tax of the amount which they have won.
The Payout is very less
Sometimes, it surprises the winner that they are left with the little amount after the dedication of the taxes and payouts. Different lotteries are also letting the winners to receive the winning prize in various ways. They can either take with some yearly payments or accept the lump sum.
But as we talk about the lump sum, it is quite less as it was advertised in the winning amount because of certain taxes. It would sometimes be around 75% of actual cash prize.
Start spending uncontrollably
One major mistake which every lottery winner make is to start spending over the things which they generally do not need. If they have a television set in one room, then why they spent so much of adding TV set in each room. This sounds so strange and seems to be like spending their money without any reason.
Start making bad investments to earn more
Last but not the least, they start making some bad investments just to earn some more money. If you are not having vast knowledge about how to perform the money investments, it is useless to step into this business and invest all your money into it. This is when you start spending so much of money without any need.
Well these have been few of the major reasons due to which a lottery winner can go broke. If you have recently won a lottery prize, make sure you keep yourself away from all such downfalls so you can save more for the future.