How to plow through $10 million
A few weeks ago, I read about a sad financial story in The Star. After winning $10.5 million nine years ago thanks to a winning Lotto Super 7 ticket, Sharon Tirabassi is now almost living paycheque to paycheque.
The article stated the payout “…didn’t come with a financial adviser and before she knew it — big house, fancy cars, designer clothes, lavish parties, exotic trips, handouts to family, loans to friends — the money was gone.”
How did she plow through $10 million in less than 10 years?
- She took friends on multiple all-expenses-paid trips.
- They moved into a massive home and still took out a mortgage.
- They bought flashy cars and toys.
- She gave her parents and siblings money (understandable).
- She bought several houses, rented them out, including loaning many people rent money.
According to the article, the OLG (Ontario Lottery and Gaming Corporation) does not have a system to follow up with winners and there is no requirement for winners to work with financial professionals. “There’d be no way for us to make that requirement of winners … people are adults and need to be able to make their own decisions,” said spokesperson Don Pister.
That comment by Don Pister leads me to these questions…
Should OLG have any follow-up system for lottery winners, to “check in” on their financial well-being?
Does OLG have any obligation to prevent future cases like this? Is the lack of a financial adviser to blame here?
I wish Sharon continued happiness. Money certainly never bought it.
Ha Ha … loser
Nope but a list of guidelines or idears.
Take a couple weeks off with you and your spouse/family if applicable. Away from phones, TV’s etc. in order to come to grips with the windfall. Then make plans to enjoy some, change your life some and get proper advice…FROM A WEALTHY person, not an advisor etc. Someone that actually has it and knows how to use it properly.
Good ideas Bubba. Get away from everyone and everything and then decide from there. That’s what I would do as well.
Get advice from a wealthy person vs. an advisor, I like your call there too.
Everybody is concerned about the “lost opportunity” of the lottery win. Why do we have to be so prudent? If Sharon had 10 years of fun with the money and is now back where she started, she at least has a LOT of fun memories and is no worse off than before the win. Why is this a bad thing? Sheesh, lighten up! Its only money!
Is no one responsible for themselves and their own behaviour anymore? Is everything always someone else’s fault? Good grief…..
It will not help to have a financial advisor. I won 20k and put all of it away with an advisor and 5 years later I went into a consolidate debt.
I’m sorry to hear that Steve. Do you think the advisor steered you the wrong way? Just curious…
I think it’s a shame that (many) people change their behaviour as a result of winning the lottery, but the blame certainly doesn’t lie with the OLG. Perhaps over a threshold – say, $1 million – the OLG could include a list of 10 advisors specializing in high net worth families, but that brings up an issue of selecting the advisors. Ultimately, the winner can spend their money however they want, even if it leads to their financial ruin.
Hey Tom,
Now you are talking. I agree with that proposal. For multi-millionaires, I think the OLG should partner up with a few pay-for-service advisors and help those (or at least be available to those) who have a huge windfall. The issue of selecting the advisors could rest with OLG. The choice of whether or not these new high net-worth people want to take advantage of that service, is theirs.
I don’t think the cost to OLG, for having some sort of waiver to sign that removes them of liability if lottery winners don’t take the advisor-route would be that costly to them.
Thoughts?
Pretty simple, financially successful people do not play the lotto. Most people who do play obviously are not smart with their money
The problem was not that she did not have a financial planner or advisor. The problem is that she won a boat load of money at such a young age. Anyone who is 25 would blow through that cash just as fast.
There is no way on earth that any lottery corp. would provide a list of advisors or the like.
Just think if the winner hooked up with one of the recommended advisors and he absconded with the money or gave bad advice.
The simple fact is we are adults and some of us make bad decisions.
Hey Rick,
Potentially, that might happen, but I suspect if OLG did this they would screen the advisors they would partner with.
You are correct and I agree with you, while adults, we can make very bad decisions. Even 10 million of them.
You can’t fix stupid
Ouch, but I totally see your point Ralph!
This is a more common problem than you may think. At the Philadelphia 76ers game, it was Allen Iverson bobble head giveaway night and he was there as a retired ballplayer throwing out the first ball. In the paper the next day they were saying how he is in financial trouble. How can this be as I think he earned over 70 million over his playing career, maybe more. And what about the countless other athletes starting with the great Joe Louis who have died penniless?
Crazy. $70 million? Iverson might have made more I’m guessing, especially with endorsements.
I guess with that type of income, you get used to some sort of lifestyle inflation. I guess you feel entitled. Too bad and sad really.
I don’t think it’s the OLG’s responsibility at all although handing them a list of reputable advisor’s may help. As for them being sleazy, well anyone can pull that card if they want but not everyone is a bad cup of tea. I do agree with Echo that there would be a line-up and it could get very confusing for someone. If a winner already knows they are not good with their personal finances and they are in tonnes of consumer debt of their own doing then they should seek some advice. Sad indeed, I’m sure many of us could think of plenty of ways to make that money last but it’s one thing to dream it and another to live it.
maybe this article will help explain
Note does contain strong language and no ***
http://www.cracked.com/blog/the-5-stupidest-habits-you-develop-growing-up-poor/
Yeah, that can help explain things…
Still sad though eh Rob?
What a poor use of the lotto winnings. That kind of money could last a family for multiple generations lol. I think if Sharon is an adult then she should have sought financial advice herself. I hope she enjoyed herself while she could. In any case it sounds like the money was well spent and created economic activity wherever she went.
I totally understand giving money to family, to help pay off their debts, but everything else is a waste. I feel bad for her but I guess if she has no regrets, then I shouldn’t feel so bad for her actions.
Just for the record, I only need $1 M – that would set me up just fine 🙂
Just imagine the types of sleazy advisors who would line up to ‘help’ these lottery winners. They’d just as likely contribute to the winner’s downfall.
I think the lineup would be pretty long 🙂
I don’t think that they have an obligation to provide a financial adviser. But it might be nice to at least offer one to winners. Then let the lotto winner decide whether to use their money wisely or blow it all on crap.
I dunno, I go back and forth on this one… Most good programs have some sort of effectiveness measure associated with them. Such programs would include follow-ups with customers. Thoughts?
Hi Mark,
What you’re suggesting may make sense, but the only way it’s on OLG’s list of top 100 concerns is if it gives them bad press and reduces lottery sales.
Ha, you’re probably right.