Windfall to Downfall: Unbelievable Rags to Riches to Rags Stories

What’s wrong with some people? How can some one be incredibly lucky to win a one-in-a-many-many-million odds sweepstakes and be equally incredibly stupid to blow it all away? These *&$@&* morons!!!

What’s got into me today, you ask? Well, it’s another season of HGTV's 2007 Dream Home Giveaway sweepstakes and for the past couple of years, every season, the dreamer in me makes sure I enter a couple of times. Being a relatively new home owner, I really enjoy the shows on HGTV. And the dream homes that they build are oh-so-beyond-fabulous! So, when I read what a mess the 2005 dream home winners had made of their fortune, I was all but ready to scream. It was a story that got me mad at all levels. First, it got the dreamer in me all riled up. Then, it really got to the personal finance crazed realist, who wanted to shake these people and put some sense into them. Argh!

Here is the story in a nut shell. Don and Shelly Cruz were the lucky winners of the 2005 dream home sweepstakes and won an incredibly beautiful 6,000-square-foot, three-story mansion in Tylor, TX. Oh, and to ease them into the life of luxury, HGTV even gave them $250,000 in cash and a GM Denali SUV. In the 10 years that HGTV has run this sweepstakes, Don and Shelly were the only ones who chose to live in the house. With Don being a stay-at-home dad (of one son, age 11!), and Shelly going back to school, the bills started to add up. And boy, were the bills HUGE! Here’s a snippet of some of the expenses –

  • Upkeep: $2,900 a month.
  • Homeowners insurance: $7,000 annually.
  • They own seven vehicles! Gas and insurance: $1,000 a month.
  • Mortgage payment for their old house that they decided to keep: $1,000 a month.
  • Fixing family boat: $11,000.
  • A dog run for their three dogs: $6,000.
  • Entertaining family and friends: $1000 per weekend.
  • Christmas presents: $5000.
  • Scuba lessons: $2000.
  • A Go-kart: $1800.
  • And of course, charity: $40,000

Oh, did I forget to mention that all this was on top of the $1million loan they had to take to pay off the $672,000 tax bill on their winnings and cover other expenses? The monthly payment on that loan alone is $8000. I don’t even want to know what the interest rate is!!!!! Long story short, the Cruz’s are now trying to sell their dream home valued by real estate analysts at $2.5 million dollars, for an incredible asking price of $5.5 million dollars (now reduced to $4.9 million)! At this point, I am beyond surprise :( After reading that article, tell me if it doesn’t make you want to go shake some sense into them!

It turns out, the Cruz’s aren’t the only ones whose windfall was their downfall.

  • In 1988, 29 year old Shefik Tallmadge won a jackpot of $6.7 million to be distributed in installments of $335,000 each year for 20 years. In 1998, he decided to cash in the rest of his payments. In 2005, he filed for bankruptcy! Full story: From Porsches to bankruptcy

  • Jack Whittaker won $314.9 million in Christmas 2002 to be the biggest lottery winner in U.S. history. A story that started out great with him making good on his promise of giving 10% in charity, took a downward trend of indulgence and arrogance, ending with his 17 year old grand daughter dying of suspected drug over dose. Full Story: No fairy tale life for lottery winner

  • William "Bud" Post III won $16.2 million in lottery in 1988. Within 3 months after the first of his 26 annual payments of $497,953.47, he was in debt of $500,000! This guy had a terrible life. Apparently, his brother tried to get a contract killer to murder him, his landlady swindled away one third of the jackpot, he was convicted of assault and served a prison sentence, he went thorough a bankruptcy and towards the end was reportedly living on a $450-per-month disability check! The article quotes him as saying "I was much happier when I was broke," and "Once I'm no longer a lottery winner, people will leave me alone. That's all I want. Just peace of mind,". Man that’s rough! Full story: William 'Bud' Post III; Unhappy Lottery Winner

The list just goes on! I don’t understand what’s with these people. They have the unique opportunity to do whatever they want, to create a spectacular future, to leave behind a legacy. Instead, they squander it away, bringing misery to themselves and those around them. I am really quite speechless!

Sources (apart from those linked above):



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2 Comments:

cindy@staged4more said...

truly be careful what you wish for! but i think mainly it's your headspaces. I have read about these lottary winners and their tragic stories that they blew everything on lavish items they never were able to buy and they went crazy. (Okay I will admit it, I watched the E true Hollywood stoy haha) These "lucky" winners bought themselves into debts, or blew the fortunes all on drugs. They became incredibly paranoid and became targets of frauds and deceits. They lost trust in people and they wished they had never won lottery because of the hefty price tag they ended up paying. But there are also happy endings where winners who kept their heads on straight and invested in buying their dream homes, raise children and rarely splurges on expensive items. One of the winners said "I walk down the street and I see this really expensive car, sure I can buy it, but I don't need it." Which is a very wise philosophy.

Cheers,

Cindy@staged4more

ispf said...

Hi Cindy,

Thanks for stopping by! Yeah, you are right, there are several happy endings to winners too, but I guess they dont make it to front page news since its not as sensational as a winner messing up :( I will look for some inspiring stories of winners who kept their heads straight and try to post them here.