
He won Powerball’s $314M jackpot. It ruined his life - rm2889
https://www.washingtonpost.com/history/2018/10/24/jack-whittaker-powerball-lottery-winners-life-was-ruined-after-m-jackpot/
======
true_tuna
This story is quite common. The obvious conclusion is that a large infusion of
money can ruin someone. But it occurred to me recently to wonder if there’s a
selection effect where people who are bad with money are far more likely to
buy lottery tickets. People who are bad with money can waste whatever quantity
they are given. Someone like that isn’t going to get a lot happier with an
infusion of cash. Or rather they would with a gradual infusion over time
coupled with some training and discipline. 3 things which are deliberately
avoided in the framing of the lottery.

~~~
WorldMaker
The interesting part is that lotteries are investment schemes of a sort and
designed for gradual payouts more akin to an annuity. The jackpot numbers
always include a disclaimer that that would be the total winnings over the
lifetime of the payout of that "investment product": immediate payouts are
considerably smaller and not just because they involve more taxes. (Obviously
it is in the lotto's favor to often spin it as entirely taxes and fees, rather
than admitting that it's an "investment" product that they "sell" to "buyers"
where the large dollar figures are based on a time-value-of-money
calculation.)

The number of contestants that take the lump sum up front instead of treating
it like an annuity to supplement their lifestyle over time is staggering, and
also indeed another likely indicator of the selection effect that the people
most likely to play the lottery are the least likely to have good investment
advice in their lives.

~~~
scott00
Taking the lump sum is not at all indicative of a lack of good investment
advice. Going with the installment payments is equivalent to taking the lump
sum and then investing it all in US treasury bonds. That's an extraordinarily
conservative investment strategy and most investment advisors would recommend
something more aggressive.

~~~
fjsolwmv
Getting a surprise $100M is different from managing your portfolio. Aggressive
means easy to lose it all due to ignorance or fraud. Getting a dozen mulligans
via installments is good insurance against losing it all.

~~~
scott00
> Getting a surprise $100M is different from managing your portfolio.

It's really not that different. All of the advice out there concerning how to
prudently manage a portfolio of $100K applies pretty well to $100M. Going up
to the $100M opens up some additional options (private equity, hedge funds,
venture capital, real estate) and involves some additional taxes (estate/gift
taxes), but you could do a lot worse with your $100M than sticking 60% in low
cost equity index funds and 40% in low cost bond index funds and ignoring
alternatives and tax optimization.

> Aggressive means easy to lose it all due to ignorance or fraud.

More aggressive than ultra-conservative does not mean aggressive in an
absolute sense.

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explorigin
There's a old reddit post about how to win the lottery well. It's one of the
most fascinating things I've read.
[https://np.reddit.com/r/AskReddit/comments/24vo34/whats_the_...](https://np.reddit.com/r/AskReddit/comments/24vo34/whats_the_happiest_5word_sentence_you_could_hear/chb4v05/)

~~~
tryonqc
Looks like it's based off
[https://www.ar15.com/forums/general/-/5-749519/?page=1](https://www.ar15.com/forums/general/-/5-749519/?page=1)

~~~
LyndsySimon
Interesting to see another user here cite Arfcom.

First the chans began to merge with Arfcom GD, and now HN is becoming more
connected. I'm interested to see where this goes.

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bediger4000
Interesting. I wonder how prevalent this sort of thing is? I mean, even small
populations of people will contain a ne'er do well, or a gambler or something.
Does the prevalence of lottery winners that screw up match the general
population's prevalence of individuals who screw up?

Without some indication like the above, it's hard to take the WaPo seriously
on this.

~~~
jarfil
I'd guess the reporting is also biased, there is not much to tell in the cases
of people who have won and just lead a stable life afterwards.

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squozzer
About 30 years ago, I read a book about lottery winners and the stories read
very similar to Mr. Whitaker's, back when a mere million dollar payout was a
big deal.

Though it's possible the book had a selection bias - because who would read
the stories that ended happily ever after?

I'm not sure regular schmoes can avoid problems with large sums of money
because we're not used to dealing with wealth or the problems it attracts.
Rock stars, pro athletes, and even heirs to family fortunes have similar
problems.

Given the likelihood of winning, I've already spent too much time thinking
about what life modifications might be needed but here goes --

1) If you know or can access someone who has tons of money (e.g. Bill Gates),
ask them. Though people such as Bill Gates probably have most of their wealth
in investments, not cash.

2) Get a second address or at least access to a place under someone else's
name. Assume your driver's license info will become public knowledge.

3) A couple of lawyers on retainer is good, at least one who specializes in
defending against frivolous lawsuits. Maybe one who specializes in such
lawsuits, just to knock them out of the pool of possible attorneys who would
come after you. I heard Michael Avenatti might be available.

4) Having a friend or two in the police might help, they can find people
willing to pull security details. The key phrases here are POST-certified,
sworn officers. I'm not as big on hiring military-grade "operators" but maybe
if you find yourself dealing with kidnappers or other hard-core types...

5) I prefer lump sum, because governments have a reputation for altering
plans. Not to say a government wouldn't just confiscate one's holdings, but
it's usually easier to not give something than to take it back.

6) If you are a man, seriously consider a vasectomy. That won't stop the
paternity suits but you'll sleep a bit easier. Apparently celebs have
doppelgangers who bed women on the reputation of others. That may be a harder
scam to pull off in the age of smartphones.

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TomVDB
In most states, the biggest issue is still the one of anonymity.

I wonder if there’s a way around that by selling/auctioning off your winning
ticket to somebody who’s already famous and, say, a billionaire at a discount.

~~~
sjg007
I don't know why there hasn't been a lawsuit about this yet. Maybe there will
be at the Federal level. Since some states allow anonymity and as such the
powerball agreements do then it seems unreasonable for states to require
public disclosure.

~~~
janesvilleseo
There has been at least one recent lawsuit

[https://money.cnn.com/2018/03/12/news/powerball-winner-
anony...](https://money.cnn.com/2018/03/12/news/powerball-winner-
anonymous/index.html)

~~~
TomVDB
That was a different situation though: NH allows trusts to claim the ticket,
but only if the ticket is signed by the trust representatives.

The woman in question had already signed the ticket in her own name before
setting up the trust.

Most states don’t allow trusts to claim a ticket at all.

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Nomentatus
Of course, what's true of individuals, is true of societies, too. Getting rich
quick (particularly without effort) brings out the worst. Look a Saudi funding
for 911 and much other mischief they've funded, for example.

But this may be true of Western nations in general as wealth accelerates; and
the increasing Gini coefficient in the U.S. may be just one more sad symptom
of too much wealth, not too little. The U.S. won the techprogress lottery, and
doing so seems only to have amped up political craziness, drug use and
inequality.

