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Lotto warning: 'friends, family, money can disappear quick'

Date

Stephanie Anderson

Winning in the lottery can bring in all sorts of people seeking handouts.

Winning in the lottery can bring in all sorts of people seeking handouts. Photo: Michel OSullivan

Winning the lottery might seem like a dream come true, but a windfall can cause as many problems as it solves, warn financial advisors.

Co-owner of Milestone Financial Services Darren Laudenbach said an influx in funds could create all sorts of strains on relationships, as friends and family come out of the woodwork armed with expectations.

"The statistics around winning Lotto are ridiculous," he said.

"It's something like 90 per cent of winners after 12 months have no family, no friends and no money left."

The caution comes as four ticket holders, including a Canberra family and an 80-person syndicate from Victoria, won a share in the $111 million Oz Lotto jackpot drawn yesterday.

Mr Laudenbach said one of the worst things the winners could do was start making drastic changes, such as selling up and moving to a different neighbourhood.

"We have had a lotto winner in our time and we suggested they not make any radical changes as long as they can hold out," he said.

"There's a lot to think about, it creates a lot of problems."

As well as seeking advice, Mr Laudenbach said people coming into large amounts of money should undertake financial counselling.

"We call it neuro-finance - it's getting into their heads and figuring out what is important," he said.

"It's about trying to get their relationship with money right."

Last night's winners will have two weeks to absorb the news before collecting their quarter share of the jackpot.

Oz Lotto spokeswoman Zoe Knobel said winners would be encouraged to use the two weeks to seek professional financial help before travelling to Sydney to collect their enormous prize from the lottery headquarters.

There they will be invited into a plush 'Winner's Lounge', where they'll need to complete quite a lot of paperwork to claim their prize.

The winners won't be offered champagne to drink in the lounge, but they will be offered a bottle to take home.

Only the lucky few Australians who've won big themselves could probably understand what the two-week cooling off period will feel like for the four major prize winners.

Ms Knobel said it was important time to plan for the enormous opportunities awaiting them.

"It's a really good time to sit back, let the news sink back and plan for your future. We recommend all of the winners, regardless of the size of the prize, that they do seek financial advice about how they can use that advantage to potentially invest for the future.

"We like to see it not just change someone's life, but set them up for life."

Darren Laudenbach's three top tips for lottery winners:

  1. Don't tell anyone.
  2. Don't do anything for a month or two. Just sit and think.
  3. Get some good advice from a team of professionals, including an accountant, lawyer and financial planner.

51 comments

  • "Get advice from an accountant, a lawyer, and a financial planner" ..... WHAT ??? That's the same as getting advice from a real-estate agent, a used car salesman, and a Public Servant. You'd wind up broke with a huge bill for fees and a statement that says "we did our best".

    Commenter
    Gordon Strachan
    Date and time
    November 07, 2012, 1:36PM
    • That's why the first rule is, don't tell anyone. That way, when the money's gone into someone else's pocket, people won't know what an idiot you've been. But I agree with the rules. Don't tell anyone, don't do anything for a couple of months, and then maybe get some advice from somewhere.

      Commenter
      ohmylord59
      Date and time
      November 07, 2012, 2:14PM
    • Here here !

      Commenter
      NSW Observer
      Location
      Sydney
      Date and time
      November 07, 2012, 2:23PM
    • I read it somewhere that you should set up a trust to receive the winng, so that no body knows the individuals. I've already set up mine "Jules Lotto Winning Trust". ;-)

      Commenter
      Jules
      Location
      Sydney
      Date and time
      November 07, 2012, 2:46PM
    • Nice glib line, @Gordon, Easy for the ignorant to take pot shots. Accountants, lawyers, and financial planners, and for that matter, real-estate agents, used car salesmen, and public servants are as a group good people. You might as well say all mechanics are rip-off merchants, all doctors pad their bills, and every builder's name is Jerry. There is always one in every crowd who does the wrong thing and gives every group a bad name. Here's a thought: if you ever win the lottery, why don't you just use your brain and simply do what the wealthy do to look after their wealth - oh that's right, consult their accountant, lawyer, and financial planner.

      @NSW observer: it's "Hear, hear", not "here, here", even in NSW. Go to the back of the class.

      @Jules - oh, really. Well, in that case you'll need a lawyer, won't you?

      Commenter
      Bah, humbug
      Location
      Earth
      Date and time
      November 07, 2012, 3:23PM
    • an accountant, a lawyer, and a financial planner ...

      or

      a thief, a snake-oil salesman, and a con-artist ...

      Commenter
      FrankK
      Location
      Sydney
      Date and time
      November 07, 2012, 4:40PM
    • LOL! Oh God, I couldn't stop laughing here about that one. Thanks for making my day. Hahahaha!

      Commenter
      blue boy
      Location
      Ballarat
      Date and time
      November 07, 2012, 4:49PM
  • Bugger that. I'm spending big!

    Commenter
    Seamus O'Connor
    Location
    Sydney
    Date and time
    November 07, 2012, 2:10PM
    • Take some spending money and lock the rest up for twelve months so you can't touch it. I would love to be in the position to play the banks against one another, get them all in the same room and hold an auction for the funds.

      Commenter
      casper
      Date and time
      November 07, 2012, 2:13PM
      • "get them all in the same room and hold an auction for the funds." Do you really think the banks would? They couldn't care less. If it was billions, yes but otherwise forget it. What a moronic statement.

        Commenter
        Mystique
        Location
        Sydney
        Date and time
        November 07, 2012, 4:34PM

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