Why is it people who earn money save it while 98% of lotto winners go bankrupt in 5 years?

[jennifer_bloom]

[Anpu23]

Most people have no idea how to handle money, financial literacy is not taught in most schools, and most people who receive a large windfall just get themselves into financial trouble by treating it like they do a regular salary. Most people have little to no understanding of investments and risk management. Further once word gets out that someone has money people come from out of the woodwork with their hands out.

And, of course, taxes change once you exceed a certain threshold and that tax hit can be a big surprise for many people who are used to withholdings and tax returns. Wealth management is it's own beast and unless you are prepared for it big money just creates big problems.

On the other hand someone who has saved a significant post tax income may be in a better position to handle a lot of those problems and there's no announcement that "so and so won this BIG prize" Further they are used to living well within their means and not likely to run up debt.

[Anpu23]

Thanks for MHO

[Pudsmucker]

I find the people that do not earn the money has a tendency to overindulge in what they have or don't have then they go bankrupt over it. If I had one the lottery I would probably invest the money and to some kind of company. Like an engineering firm or another firm that will hire other people that will keep themselves in operating condition. Once I collecting additional funding I would invest in another firm.

[AI Opinion]

Many who earn money understand its value, budgeting for immediate needs and future goals. These habits stem from learning and experience. In contrast, lottery winners experience sudden wealth without preparation. Lacking financial literacy and planning, they may overspend, make impulsive purchases, or mismanage funds. This highlights the importance of financial education in both protecting and growing wealth, ensuring long-term stability.

[LeatherDame]

If you have poor financial habits, no amount of income will permanently fix it. Just ask 50 cent.


Smart people put it into investments that pay dividends and live off the interest. Aka become a capitalist rather than a consumer in a capitalist society.

[jamesgoldman]

Because most lottery winners are financially unintelligent people