KLE 24: Why winning the lottery isn’t enough

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I want you to meet somebody: his name is Lee Eisenberg, and at the time (in 1981), he was the biggest ever winner of the New York state lottery: he won $5 million!

The New York Daily news reported:

In November 1981, Eisenberg was making $225 a week changing lightbulbs in a midtown office building when his lottery win turned him into an overnight sensation. As luck would have it, it was Friday the 13th.

With installments of $219,000 a year, $130,000 after taxes, paid out over 20 years, he was able to quit his job and buy a $130,000 condo with an ocean view and a terrace in Brighton Beach.

Dubbed “Light Bulb Lou,” Eisenberg became a fixture on TV and in lottery commercials … as his fame grew, so did his spending.

 There were days at the track, trips to Europe and Hawaii, and dinners where the newly minted millionaire always picked up the check.  “Whoever needed something, I gave cash. I wanted to be nice to people,” he said.

By 2001, after he cashed the last lottery check, he was broke

The former multimillionaire now lives in a mobile home in Lake Worth, Fla., on $250 a week from his Social Security and pension checks.

If you think this can’t – won’t – happen to you, think again: Lou isn’t the exception, he is the rule: it is reported that 80% of major lottery winners are worse off financially after just five years!

If you still find that hard to believe, the operator of the largest lottery in the United Kingdom found that their winners had spent 44% of their winnings after just 2.5 years, on average.

I’m sharing this, because you might be lucky enough to reach your Number merely through any of life’s more financially fortunate events: lottery, marriage, inheritence, miracle business breakthrough, and so on …

… but, you had better understand NOW that keeping your money will require you to be just as lucky as making it.

The financial lessons of this Module are not there to help you save your way to Your Number (in a later KLE, I will help you prove that this is impossible!) but to help you make your money, then keep it!

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Reader Comments

This is why I keep saying we need to do more ti teach our children. These examples you point out only hark back to the fact that we don’t do enough to teach our kids how to earn, and keep what they earn.I think it falls to both the parents and the schools.Parents should sit with their children when doing the home record books and explain what they are doing and why! In school, it should be required teaching that every year, children are taught how to do basic book work as well as spread sheet knowledge.As they progress from grade to grade, those teachings should delve deeper into these subjects.
We fail our kids miserably in teaching responsible money management.

They say you become more of what you all ready are with money. I also know from personal experience why this happens. If I (we) don’t learn how to properly have money work for us and do the little things correctly then Lee story seem to happen to many. The other thing is personal development and developing oneself in order to be ready to receive large amounts of money. Lastly, I feel it has a lot to do with not having to go through the processes of generating large amounts of capital. There is much growth that takes place when working your ass off for something. We tend to not value things as much as if we earned it ourselves.

“it has a lot to do with not having to go through the processes of generating large amounts of capital”

@ Zimbo523 – You hit the nail on the head … another way to say this is: easy come, easy go.