20 November 2017 Posted By : Administrator

Lottery Winners Face Burdens

Striking jackpot in a lottery takes gargantuan amount of luck. For lottery winners though, winning is just a little step in achieving financial security, as the thrills of falling into unexpected wealth can be quite overwhelming.

Carmen Castellano and Alcario were lottery winners more than a decade ago, winning a whooping sum of $141 million in California. While the tendency to fritter away the entire sum looms over every lottery winner, they were quite fortunate to get professional financial advice from a family member.

83-year-old Alcario Castellano said that, one of the many things they learned early enough was saying no. After their big win in 2011, their San Jose home was constantly bombarded with calls, and even visits, by numerous people requesting loans or trying to acquire their own share of the winnings. Alcario Castellano said even an acquaintance requested for a personal loan not too long ago, and he made it clear that it was against his plan.

Due to the perceived insecurity challenge, the couple had to purchase a more private house—with Alcario jokingly stating that, “it was because the Jaguar I gave my wife would have looked out of place in our old neighbourhood.”

With lottoz.com offering players the chance to also strike jackpot and gain the required financial security, there is the tendency for extravagance; and the couple indulged themselves by purchasing new luxury cars. Though, they swiftly set their priorities straight by giving to the Latino community organizations.

The display of blithesome exuberance is a constant for lottery winners, but the burden that accompanies it can be quite strenuous. Psychologist Stephen Goldbart called it the “sudden wealth syndrome”, which describes symptoms such as, feeling of isolation from friends and acquaintances, sudden guilt over good fortune, and the insecurities of loosing the recently acquired wealth.

The tendency to make extravagant purchases, hasty and bad investments, are just a few of the numerous perils lottery winners face after experiencing an upsurge in finance. This worrying trend has compelled most state lotteries to painstakingly advise winners to employ the services of professionals for accounting and financial advice.

“Nobody teaches you what to do with a large amount of money,” said John Hagerty, a spokesperson for the Virginia Lottery. “We give those who win $100,000 and up a video and a packet of information to help them prepare for their new financial lives.”

Another couple in Oregon, Michelle and Robert Sutherland, won $7 million last June in the state's lottery. They had lost a significant amount of their retirement savings due to the 2008 economic meltdown, and also, the stall in the local economy meant more money went down the drain as their restaurant had to be closed.

Their fortunes changed when they consulted a financial adviser they knew, taking along a lump sum of their lottery winnings. 54-year-old Michelle Sutherland, said they bought a  “nice, comfortable house, but not a mansion” outside Springfield, Ore. “To have that title in your hands is an amazing feeling.”

Michelle said that they were able to spend the money wisely on family members, and also on creating substantial college funds for their three grandchildren. “It is very easy to fall into buying everyone the things they want,” she said, “but we want to keep it the way it’s been.”

A lottery winner also remarked that there's no definite plan that would be successful for everyone.

“There is no one way when you win,” said 32-year-old Amanda Spiller, who won a $1-million Virginia Lottery prize in September 2015. With her 7-year-old daughter requesting a helicopter and a yacht, Spiller said with a laugh, that she "put her foot down.”

A self-employed woman, Spiller searched out the services of a local accountant for advice, and placed a lump sum of her winnings totalling about $688,000 before taxes. She was then able to make wise financial decisions, by paying off her student loans, investing in a mutual fund, and nurturing some of her passions—like her food advice website, Stop Eating Like a Jerk.

“I definitely have a better quality of life now,” she said. “I’d never been on an airplane, so I’ve done a lot of traveling and taken my daughter places she was never able to go.”

Spiller is also still determined to win again, she said. “I’m still playing the lottery every week. I won $2,000 last year and I’m sure I’m going to win again, so I invest about $30 every week.”

The Castellanos, who are bigger prize winners, share some of their wealth through foundations. They had earlier volunteered in local Latino organizations prior to their win, and 16 years ago, set up the Castellano Family Foundation. 78-year-old Carmen Castellano, who was an administrative secretary for over three decades at the nearby San Jose City College, ensured that he read and evaluated every application for funding. “I was making a list of organizations as soon as Al told me we had won,” she said. “By that December, I wrote the first foundation check.”

The “rich” couple discovered more about philanthropy through conferences, consultations with major donors, and via the services of a consultant. The Castellano Family Foundation focuses mainly in arts and education groups, and also leadership and diversity issues.

“It’s not to say that we don’t have fun,” she said. “We had a grand celebration on our 50th wedding anniversary. When we won, we had the means to help others, but it hasn't changed us. “We still have the same friends,” she continued. “The foundation has helped us to develop our spending ideas, and develop an intuition about how to handle people that we don’t know.”

While the initial burden might have overwhelmed the Castellanos, they have quickly turned things around to gain more financial security.

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