As hard as it will be to win the $1.1 billion first prize in Friday night’s Mega Millions lottery drawing — with odds of acing it at 1 in 302,575,350 — holding onto the money will be a long shot in its own right.
The world of lottery winners is paved with former millionaires who’ve burned through fortunes and wound up broke.
Take Jay Sommers. In 1988, he won some $5 million in the Michigan state lottery. Only 20 at the time, he was the state’s youngest winner and a splashy poster boy for easy riches. These days? “There ain’t no money left,” Sommers, now 54, told The Post.
“I put money in a trust fund and the trustee embezzled $2 million from me. I went into NASCAR and that was fun but expensive — it cost me $200,000 per year. I raced in Daytona and finished fourth. I quit college, which was idiotic. I wound up suing the trustee and won [in excess of $1 million], but he threatened to go bankrupt. So I settled for $800,000. My lawyers got $380,000. I spent about $200,000 on the trial, which I did not know I would be responsible for.”
These days, Sommers said, “I work as a marine mechanic, fixing boats. I’m a normal guy, working 9 to 5.” Winning the lottery, he added, “ruined my life.”
But it could have been worse. At least Sommers is not dead or in prison.
Jeffrey Dampier won $20 million in the Illinois state lottery in 1996. He promptly divorced his wife, gave her half the winnings, remarried, had an affair with his new sister-in-law — and wound up shot to death by her.
Ronnie Music Jr. won $3 million in the 2015 Georgia state lottery, only to invest some of his cash in 11 pounds of crystal meth and land behind bars for it.
Evelyn Adams took in $5.4 million via two winning tickets in the 1985 and ’86 New Jersey state lottery. Then she blew it all on slot machines and risky investments. Reportedly, she currently lives in a trailer.
One thing many unhappy lottery winners have in common is taking advice from less-than-knowledgeable people while being swayed by greedy friends and relatives.
“Everybody expected money from me,” said Sommers. “I had uncles expecting and friends [wanting money] that I don’t even speak to anymore.”
Michael Minter, a financial adviser who co-founded Mintco Financial, remembers getting a call from a lottery winner with a million-dollar prize. Minter helped the winner to set up a plan that seemed reasonable and expected a call-back in two weeks, as soon as the money landed.
“Then,” he told The Post, “a year or two later, the call came in. Her brother got involved in investing the money, it became a bad situation [with significant losses] and she asked what I could do to help her. I told her to hire an attorney.”
Between pushy family members and strangers with get-rich-quick schemes, it can be tough for lottery winners to stay solvent. Robert Pagliarini, author of “The Sudden Wealth Solution” and founder of Pacifica Wealth Advisors, has worked with a handful of lottery winners and received calls from dozens who fail to follow through. Part of the problem, he’s come to be believe, is an unrealistic expectation of what can be done long-term for the money they have.
“You go from zero to a million and think you’re rich,” Pagliarini told The Post. “Then a financial planner tells you that the money should be invested and you can conservatively receive $2,000 a month for the rest of your life. Then the winner says, ‘What are you talking about? I’m a millionaire.’ After that conversation, he goes off and spends all his money.”
Added Minter: “I’ve seen the newly rich spend $200,000 on two weeks of partying and I remember an entertainer having her Bentley repossessed.”
Meanwhile, boneheaded investments can be their own forms of blowing dough. “I had a suddenly wealthy client invest in a pay-phone company when everybody had cellphones,” Scott Hanson, founder and CEO of Allworth Financial, told The Post. “He lost his money on that one.”
Pagliarini points out that whoever wins the billion-dollar lottery on Friday should do everything possible to slow the deterioration. One way to do that is to put a limit on outgoing cash flow.
“In strictly financial terms, it’s a better deal to get your money in one lump sum,” he said. “But for people who are not financially sophisticated, the annuity [spread through 30 payments over the course of 29 years] allows you to make financial mistakes without going broke. You can mess up every year and then get to start over again, with a fresh infusion of money, the next year. I’m hopeful that by year seven or eight, they figure things out and make good financial decisions.”
