Walk into my kitchen while I'm fixing dinner any given weeknight and you'll hear "If I had a million dollars" blaring from the stereo. I've been known to chirp along to my favorite CD by Barenaked Ladies while shelling peas or blanching tomatoes: "If I had a million dollars ... I would buy you a house ... I'd build a tree fort in our yard ... I'd buy you a monkey ... If I had a million dollars ...
"I'd be rich."
While our lists might be different, we all have one, don't we? We've all dreamt of what we'd buy (or do) if we had sudden, overwhelming riches. We certainly wouldn't squander it like the lottery burnouts we've profiled for this article.
Or would we? According to a study published by the University of Kentucky in conjunction with the University of Pittsburgh and Vanderbilt University Law School, lottery winners declare bankruptcy at twice the rate of the general population.
Why is this? The inability to squirrel away an unexpected windfall appears to be rooted deep in the human psyche. Money arriving by luck or circumstance is simply easier to spend than money earned through hard work. It's like finding a $20 bill on the sidewalk and splurging at your favorite coffee shop. The researchers also found that lottery winners tended to have below-average education and income, which might translate into lower financial literacy than the average not-that-financially-savvy person. Here are profiles of 10 lottery winners who won big and fell hard.
In 2003, Callie Rogers was 16, living with foster parents in the U.K. and working as a shop clerk earning £3.60 an hour ($5.83 U.S.). And then she bought a lottery ticket.
Rogers won a whopping £1.9 million ($3 million U.S.) in the National Lottery and, despite early insistence that she would continue to live frugally, bought four large homes, several new cars and had two breast augmentations.
The suddenly wealthy teenager also developed a penchant for sharing her windfall with others. She purchased expensive gifts for a series of boyfriends. She even bought one boyfriend a car and paid him to act as her chauffer because at 16, she was too young to drive. It was another habit, however, that really led to Rogers financial ruin: cocaine. She estimates spending a quarter of a million pounds on the drug.
After the dust settled, Rogers was left with little to show for her riches. She sold the homes she owned, divested the new cars and rented a modest townhouse, saving the seemingly paltry £40,000 ($64,000 U.S.) that remained of her winnings while picking up work as a maid. However, in April 2012, low on funds, pregnant with twins and with a new loving boyfriend at her side, Rogers said, "For the first time I feel like I have everything I need" [source: Dagnell, Hough]. Sadly, one of the twins died shortly after birth [source: Atkinson].
In 2002, Michael Carroll won the U.K.'s National Lottery, netting a £9.7 million (U.S. $15.8 million) boost for his bank account. By 2012, however, the former garbage collector was living on public benefits, having squandered the money in myriad ways.
Carroll purchased -- and then destroyed -- a mansion, threw lavish parties for friends and made a daily habit of smoking $3,000 worth of crack cocaine. He also bought pricey cars, wrecked them on the self-made "race track" circling the grounds of his mansion and then left them to rust on the property's outskirts. A fair amount of his lotto payment went to prostitutes and overstated gold jewelry, and he developed a penchant for drinking alcohol and then driving around the otherwise quiet streets of Norfolk, England. The disturbances occurred on such a predictable basis, a hotline was established so neighbors could report Carroll to the local council.
Eventually, financial shortfalls forced Carroll to sell the mansion at a loss and he was later caught leaving a grocery market without paying for the sandwich and drink he grabbed off store shelves. The $17 items ended up costing him nearly $138 in court costs.
"I only started to think about three things -- drugs, sex and gold," lamented Carroll after his downfall. "The dealer who introduced me to crack has more of my lotto money than I do" [source: Silver].
From an early age, William "Bud" Post's life had not been easy. His mother died when he was 8 and his father sent him to an orphanage. From there, he became a carnival worker and held down a series of odd jobs with meager pay that didn't afford certain luxuries -- like home- or car-ownership. But that all changed when in 1998, with less than $3 in his checking account, Post pawned a ring for $40 and spent the proceeds on Pennsylvania Lottery tickets. When he walked away with a $16.2 million jackpot, it seemed as though his luck had changed.
Not so fast. Once word of his good fortune spread, his landlady (and sometime girlfriend) demanded (and received) one-third of the winnings, claiming he'd promised to split the winnings with her after she bought the tickets for him. His brother hired a killer to take Post's life (but only after Post purchased businesses and cars for him and his siblings). Post also made some questionable financial decisions, like buying an airplane he could not fly and a mansion that was eventually sold for parts to erase his mounting debts. To clear other debts, Post sold the rights to his remaining lottery payments, but ended up spending his last $2.65 million on two homes, several motorcycles, three cars, a truck and a sailboat, among other things. He racked up seven marriages, too. "I was much happier when I was broke," said Sullivan.
And just when circumstances didn't seem like they could get worse, they did. Years earlier, in those first, heady months of being a rich man, Post had fired a gun at a bill collector and was charged with assault. Nearly penniless, the lottery winner eventually served the sentence and then lived on a $450 disability payment until he died at age 66, eight years after winning big [source: Sullivan].
You'd have thought this one wouldn't have ended so badly. When Jack Whittaker won $315 million playing Powerball in 2002 -- the largest single jackpot at the time -- he was already a millionaire, so he knew how to handle money. He'd spent decades building a successful water and sewer pipeline company in West Virginia (worth a reported $17 million) and already lavished clothes and gifts on his wife and granddaughter Brandi Bragg, who lived with them part-time.
But winning the lottery gave him something entrepreneurial wealth never did: fame. And that, Whittaker later said, was more than he and his family could handle. He volleyed continual requests for money and endured the public airing of his strip club, gambling and drinking habits. His wife of nearly 42 years divorced him. And then there were the thieves. They stole Whittaker's briefcase containing $545,000 from the strip club, and in another incident, stole $100,000 that Whittaker had left in plain sight on the passenger seat of his car. Some of his employees also embezzled funds.
Although Whittaker set up a foundation that constructed churches, funded college scholarships and donated to those in need, trouble plagued his own family. His beloved Brandi had been only 15 when Whittaker won the lottery. By 17, she was dead, her body found wrapped in tarp behind a junked van. An autopsy revealed recent cocaine use. Not long after, Whittaker's daughter and Brandi's mother, who suffered from recurring lymphoma, was also found dead [source: Samuels].
And like many newly minted millionaires, Arcand starting splurging immediately. First, she hosted a party for 20 of her friends and family, who ordered several $200 bottles of wine during the bash. She enrolled her son in a private school with $10,000 annual tuition, went on a couple of vacations, and bought a house filled with new furniture. Then she embarked on her dream of buying and operating a hometown restaurant. However, fewer than six months after opening the seafood restaurant, financial woes forced Arcand to shutter the eatery [source: Young].
Of all the new things Arcand tried, the one thing she didn't do was save a nest egg. "I talked to a few people, but determined that putting money away wasn't worth it," she said. While the lottery mandated annual payments of $35,000 rather than a lump sum, a financial services company aggressively went after her, offering an upfront payment of $200,000 in exchange for $15,000 per year of her winnings. While this gave her more up-front cash, it put her in a higher tax bracket, further reducing her money.
Left with a failed business, an empty savings account and few prospects on the horizon until she received her next annual lottery payment, Arcand was resigned to wait for her luck to turn. Again.
Lottery winner Janite Lee seemed to have the right idea. In 1993, after buying a lottery ticket worth $18 million, the 52-year-old South Korean immigrant gave much of the spoils to charity. Although Lee did move into a million-dollar house in St. Louis, the city where she'd previously operated a wig shop, she focused on helping others.
With $620,000 a year winnings, Lee's charitable efforts included sizable donations to Washington University School of Law. She also donated hundreds of thousands to presidential political campaigns, which earned her tableside seating with Bill Clinton and Al Gore. Unfortunately, while she was giving away her lottery earnings, Lee was protecting a financial secret.
Remember that million-dollar house? Instead of buying it with her lottery windfall, Lee purchased it on payments. In addition to this mortgage, she leased luxury cars and reportedly borrowed millions more from banks and credit cards. Even when she tried to make financially savvy moves, such as paying off a loan ahead of schedule, she ended up deeper in debt by owing $750,000 in early payoff penalties.
Willie Hurt was a family man living in Lansing, Mich., when he won the 1989 lottery jackpot. Although few doubted the $3.1 million windfall would change Hurt's life, what happened during the course of the next two years was still shocking.
By the time he'd received just two of the $156,000 annual installments on his lottery win, Hurt was in the process of a divorce and had lost custody of his children. He'd also spent most of the money on crack cocaine.
Then things got worse. After a 48-hour binge on booze and drugs at a rooming house, Hurt allegedly argued with his girlfriend when they couldn't find more crack. When she was later found shot in the head, Hurt was charged with her murder and, if convicted, would spend the rest of his life in prison. Although there's no word on whether Hurt was convicted, even if he was, he could continue to receive future lottery payments [source: Associated Press].
Single mother Amanda Clayton was jobless and on public assistance when she cashed in a $1 million lottery ticket in the fall of 2011. So, that winning should have ended her need for her government check, right?
Turns out Clayton, a Michigan resident in her mid-20s, continued collecting her monthly $200 in state food assistance. She figured that since the checks kept coming in, she was entitled to keep them. In March 2012, a viewer tipped off a local TV station that tracked down Clayton; she was filmed paying for snacks with a public assistance card and then packing a moving truck for the transition to her newly purchased home. When confronted by the TV reporter, Clayton defended her right to be on public assistance. After all, she quipped, she was still unemployed and "I have bills to pay. I have two houses," a televised explanation that resulted in public outrage.
According to Michigan law, welfare recipients must report any changes to their income within 10 days. The state attorney general charged Clayton with welfare fraud, to which she pleaded no contest. She was put on probation and ordered to pay back the money she was not entitled to. A scant year after winning, Clayton died at her home of a suspected drug overdose [source: Lynch, McLaughlin].
The life of Alex Toth reads like a soap opera storyline. On the day in 1990 Toth bought a winning $13 million lottery ticket, his family -- which included a wife and six children from previous relationships -- had less than $25 to live on for the next seven days. They'd already spent weeks subsisting on beans, rice and canned soup.
Their lottery win, however, ushered in a celebrity-like lifestyle. After insisting the money wouldn't change their way of life, Toth and his wife spent three months living in a $1,000-a-night hotel room in Las Vegas. They gambled, dined, shopped and bought tickets to expensive live shows -- and then tired of it all. The Toths returned to Florida, put a double-wide on 10 acres and settled in with their children.
Before long, though, money troubles began to brew. Toth's wife accused her 19-year-old son and his girlfriend of killing her dog and setting fire to Toth's car after they withdrew his allowance. The Toths filed for bankruptcy -- twice -- and were convicted of filing three years of fraudulent tax returns. The IRS said the Toths had falsely reported gambling losses to offset their lottery winnings and now owed millions in back taxes. In addition, Toth was arrested multiple times for growing marijuana and writing bad checks.
Devoid of their money, the Toths began living with their son and daughter-in-law -- the same two people they'd once accused of animal cruelty and attempted murder. Apparently, they had reconciled. Just a short time later, Toth died penniless [source: Sullivan].
Lou Eisenberg is a retiree living in Florida. He spends an occasional day at the dog track making penny bets and then returns to the mobile home he shares with his long-time girlfriend. It's a quiet, yet often cash-strapped, life.
Although Eisenberg spent much of adult life changing light bulbs in office buildings and is accustomed to living on a budget, he once lived as a multi-millionaire. On Friday the 13th in 1981, Eisenberg won $5 million in the New York Lottery (the largest payout at the time), which he accepted in $219,000 annual installments ($130,000 after taxes) for the next 20 years.
The win -- and the fame that came with it -- led to talk show appearances, television commercials and lavish trips to foreign lands. He treated friends and family to haute cuisine, shared the winnings with two of his three wives and helped whomever he could. In 2001, when he received his final lottery check, he knew one thing for certain: He was flat broke -- and would probably stay that way the rest of his life, content to live on earnings from his Social Security and pension checks. Still, Eisenberg doesn't regret spending it all. "I wouldn't have done it any other way," he claims [source: Furman].
Lottery jackpots have gotten ridiculously huge. HowStuffWorks looks at why.
Author's Note: 10 Most Spectacular Lottery Burnouts
"If I won the lottery, I'd still work." It's a refrain I read countless times while researching this article (what people decide to do with extra money is fascinating!) and I'm sure the sentiment was most sincere at the time it was uttered. It didn't take long, though, and most soon-to-be-flat-broke lottery winners were ready for their pink slips. The winners who held on to their money seemed to hold on to their work ethic, too, parsing out their good fortune according to a budget and planning for the long-term. Would I keep working? You bet I would. But just to be safe, ask me again when I win.
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- Associated Press. "Lottery Winner Accused of Murder, Spending Jackpot on Cocaine." Sept. 21, 1991. (Dec. 15, 2012) http://www.apnewsarchive.com/1991/Lottery-Winner-Accused-of-Murder-Spending-jackpot-on-Cocaine/id-44b69eea48fff3b2a931bf78d184cb91
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- Lynch, Rene. "Michigan Woman Wins $1 million Lottery, Still Collects Welfare." March 7, 2012. (Dec. 15, 2012) Los Angeles Times. http://articles.latimes.com/2012/mar/07/nation/la-nn-na-lottery-winner-collects-welfare-20120307
- McLaughlin, Eliott. "Michigan Woman Charged with Collecting Welfare after $1 Million Lottery Win Found Dead." Oct. 1, 2012. (Dec. 15, 2012) CNN. http://news.blogs.cnn.com/2012/10/01/michigan-woman-charged-with-collecting-welfare-after-1-million-lottery-win-found-dead/
- Pridemore Amelia. "Man wanted for cashing fake checks jailed." The Register-Herald. July 27,2007 (Jan. 7, 2012). http://www.register-herald.com/local/x519083825/Man-wanted-for-cashing-fake-checks-jailed/print
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- Silver, Katie. "Michael Carroll: £9m 'Lotto Lout' Stole Sandwich and Strongbow worth £11." Feb. 17, 2012. (Dec. 15, 2012) Daily Mail. http://www.dailymail.co.uk/news/article-2102582/Michael-Carroll--9m-Lotto-lout-stole-sandwich-Strongbow-worth-11.html
- Sullivan, Erin. "For Alex Toth, Lotto Win Was Followed by Trouble." April 25, 2008. (Dec. 15, 2012) Tampa Bay Times. http://www.tampabay.com/news/obituaries/article472080.ece
- Sullivan, Patricia. "William 'Bud' Post III; Unhappy Lottery Winner." Jan. 20, 2006. (Dec. 15, 2012) Washington Post. http://www.washingtonpost.com/wp-dyn/content/article/2006/01/19/AR2006011903124.html
- Young, Emily. "Cash Windfall Can Lead to Downfall." Oct. 28, 2007. (Dec. 15, 2012) Eagle-Tribune. http://www.eagletribune.com/local/x1876402353/Cash-windfall-can-lead-to-downfall