lottery win bankrupts the NEIGHBORS

[fosterscik]

I read the oblivious investor blog regularly. Maybe others do but I'm sure not all of you do. I found this study referenced there to be pretty amazing (but not that surprising) https://www.bloomberg.com/news/arti...ottery-winners-are-more-likely-to-go-bankrupt

A recent study from the Federal Reserve Bank of Philadelphia looked at the effect of (small-to-medium-size) lottery winnings on the neighbors of the winners. They found that, on average, neighbors of the winners increase their spending and are more likely to become bankrupt the larger the size of the winnings. It’s hard to ignore the spending of the people around you.

Keeping Up With the Joneses: Neighbors of Lottery Winners Are More Likely to Go Bankrupt from Peter Coy

 

[Bryan Barnfellow]

The cost of trying to keep up with the lucky Jones family.

-BB

 

[Nemo2]

Wait up.....I seem to have misplaced The World's Smallest Violin....gimmee a second willya?

 

[tmm99]

I read the oblivious investor blog regularly. Maybe others do but I'm sure not all of you do. I found this study referenced there to be pretty amazing (but not that surprising) https://www.bloomberg.com/news/arti...ottery-winners-are-more-likely-to-go-bankrupt

Wow! This is so interesting!! The psychology of people! I befriended someone who was a big spender on fashion items, and I started getting an urge to spend more on clothing. (And I normally couldn't care less about clothing!) Or a friend who just bought a brand new car (and I don't even need a new car!) Good thing I am level-headed enough to know what I need, as well as what I can afford.

 

[RobbieB]

That's pretty funny! But a real part of human nature too.

 

[jjflyman]

"Spending money you don't have, on things you don't need, to impress people you don't know"
- Dave Ramsey

 

[Sunset]

Wow! This is so interesting!! The psychology of people! I befriended someone who was a big spender on fashion items, and I started getting an urge to spend more on clothing. (And I normally couldn't care less about clothing!) Or a friend who just bought a brand new car (and I don't even need a new car!) Good thing I am level-headed enough to know what I need, as well as what I can afford.

So I need to befriend more gorgeous great looking hunks

 

[kcowan]

Yes Jonesing seems to become a real addicition with time.

 

[haha]

My brother once told me that when it comes to acting independently with minimal influence from others it really helps to have a pretty low opinion of anyone who is not you. It sure will not help you win friends, but I think it is likely true that it will be a block to copycatting. Who wants to copy someone that he thinks is an idiot?

 

[pb4uski]

Yeah, I totally don't get this at all. I guess part of it was growing up in a community of "closet millionaires".... people who I knew were very wealthy but to look at their lifestyle, homes, cars, etc appeared to be upper-middle class.... and a lot of it rubbed off on me.

 

[mn54]

So I need to befriend more gorgeous great looking hunks

Would you like to PM me?

 

[CRLLS]

My takeaway on what they are saying is: One of the things I can do to help my neighbor's financial stability is to not play the lottery. OK. I can do that. Your welcome!

 

[Totoro]

Well, you can play, just don't win

 

[Walt34]

Well, you can play, just don't win

I learned that I'm very good at that!

 

[Car-Guy]

I don't have any neighbors named Jones, so I'm not worried.

 

[Car-Guy]

Yeah, I totally don't get this at all. I guess part of it was growing up in a community of "closet millionaires".... people who I knew were very wealthy but to look at their lifestyle, homes, cars, etc appeared to be upper-middle class.... and a lot of it rubbed off on me.

Summed up The Millionaire Next Door. (book)

 

[MooreBonds]

Summed up The Millionaire Next Door. (book)

I just thought of a new book idea: The bankruptcy next door! It can profile people that lived it up, living high on the hog...only to suddenly declare bankruptcy out of the blue (or, at least, out of the blue to those that just saw the expensive trappings of their lifestyle).

 

[HFWR]

If I win the lotto, I’m moving anyway...

 

[RobbieB]

The bankruptcy next door was right next door. Yes, right next to me, the house next door. The housing crash resulted in it being vacant for a year and a half with a "bank owned" sign in the front yard.

It was not the only one on the street i live on either, but it was right next door. Eventually the house across the street from me went that way too, but not for as long.

 

[JoeWras]

Reading "Blow that Dough" thread may bankrupt me. ... Just kidding, RobbieB.

 

[I was misinformed]

Even more dangerous is the effect a sudden “investment” success might have on neighbors. Back in the late 1990’s the small town of St. Paul, Alberta was full of Bre-X paper millionaires before the whole scam unraveled:

CBC Archives

A study of the long term effects of the rags-to-riches-to-rags experiences of a substantial number of folks in the town might make an interesting graduate thesis.


For the background

https://en.m.wikipedia.org/wiki/Bre-X

 

[omni550]

I just thought of a new book idea: The bankruptcy next door! It can profile people that lived it up, living high on the hog...only to suddenly declare bankruptcy out of the blue (or, at least, out of the blue to those that just saw the expensive trappings of their lifestyle).

Well, here's a list of the 25 worst lottery winner horror stories that might be a start for your book:

https://list25.com/25-worst-lottery-winner-horror-stories-cautionary-tales/

omni

 

[RunningBum]

If I win the lotto, I’m moving anyway...

If you read the article, they limit it to smaller lottery winners, since they are less likely to move. The lottery winner often doesn't disclose winning the lottery (so they don't have to share or always pick up the tab at dinners), but buy more toys, which they can afford (to an extent). Neighbors see these, and they buy toys too, but they can't afford them, not having won any lottery money.

Interesting phenomenon.

 

[Retch The Grate]

Even more dangerous is the effect a sudden “investment” success might have on neighbors. Back in the late 1990’s the small town of St. Paul, Alberta was full of Bre-X paper millionaires before the whole scam unraveled:

CBC Archives

A study of the long term effects of the rags-to-riches-to-rags experiences of a substantial number of folks in the town might make an interesting graduate thesis.


For the background

https://en.m.wikipedia.org/wiki/Bre-X

Gold was a fun dramatization of the event:
https://en.m.wikipedia.org/wiki/Gold_(2016_film)

 

[Helena]

.

Don't people have enough of their own personal business to attend to without getting involved in their neighbors' lives ??

I have no clue how much money my neighbors spend... and I am not at all interested.