Money for Nothing: One Man's Journey through the Dark Side of Lottery Millions

After I linked to a post of mine on Credit.com about miserable lottery winners, I was directed to this book, Money for Nothing: One Man's Journey through the Dark Side of Lottery Millions, by Ed Ugel. After listening to a This American Life story about him, I had to get the book.

This American Life producer Alex Blumberg talks with Ed Ugel, who had a very unusual dream job: he bought jackpots from lottery winners. When you win the lottery, your prize is often paid out in yearly installments. And Ed would offer winners a lump sum in exchange for their yearly checks. He's talked with thousands of lottery winners, and the vast majority, he says, wish they'd never won. Ed is writing a book about his years in the "lump sum industry" called Money for Nothing: One Man's Journey through the Dark Side of Lottery Millions. It comes out in September 2007.

Mark Frauenfelder is the founder of Boing Boing and the editor-in-chief of MAKE and Cool Tools. Twitter: @frauenfelder. Come and hear Mark speak at the ALA conference in Chicago on July 1.

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Patrick Dodds

Wow, the moralising – where did the fun people go?
Anonymous

I know two lottery winners. One in Arizona and one in Idaho. Both are happy well adjusted people to this day.

The number of people asking for money just after they won was astounding! Boxes of mail would be left at their front doors….

But, they were decent with money before; investing for retirement, kids school, etc.

So what do they splurge on: The couple from AZ travel the Northern Hemisphere in January and Febuary to ski. The guy in ID leases a new Merc every year, just after New Year’s Day…and the world’s best personal wood shop! Screw Norm’s! this guy’s is stunning.
Anonymous

I always figured that if I ever won the lottery I’d find myself going right back to work after having to spend the entire sum on individual health insurance.
jphilby

WHAT kind of capitalist nation doesn’t prepare it’s citizens for the duties, responsibilities and harrowing sob-stories brought about by sudden windfall?

What are we, a bunch of capitalist wimps?? C’mon, TAKE it like a man!!
Anonymous

It comes out in September 2007? First thing to do with lottery winnings – build book-size time machine. CHECK!
Cicada

@24- Engaging in a bizarre combination of rationalization and sour grapes, I’d say.
rd

My folks won two million dollars. On a scratch ticket, no less. They weren’t bad at math, they just enjoyed the thrill of scratching the tickets and possibly winning. (The joys of sporadic reward, and all that.) The $2M was over 18 or 20 years, so after taxes it was between $50K and $100K per year.

They took a few more trips every year, bought a little bit more jewelry, bought really nice beds when they needed to replace the beds in the guest room, stuff like that.

But they were already reasonably happy, and living comfortably within their means. *shrug*

trainwrecks make good stories. boring “and they paid off their house and lived a little more comfortably, socking away some of it for later” kind of stories are … well… boring.
moosehunter

oooo, let me weep for them…
(pause)

I have an idea, send me the money, and I promise not to be miserable….

money may not make you happy, but it beats being poor
Anonymous

“Money can’t buy you happiness, but it can buy you a yacht big enough to pull up right alongside it.” …I just like that quote.

You find out who your true friends are when something big (good or bad) happens to you. I feel bad for people who come into a ton of money just to learn that their friends and family aren’t as loving as they thought.
lasttide

Ever seen the film Everything’s Gone Green? The main character gets a job interviewing lottery winners and documents how people getting sudden, unearned large sums of money blow it on unnecessary garbage and ruin their lives.
Keppoch

I wish the opportunity to prove that vast amounts of wealth will not spoil me.
Brainspore

What do you expect? It’s basically a tax on people who are bad at math.
Anonymous

It’s not the people, hangers on or anything that is the problem.

Coming into a large sum quickly is just not healthy for most humans. Even people born into it have a less than average chance of coming out “OK”.

Working and slowly gaining your capital is better, but at one point it becomes about gaming the system and not actually doing anything worth while–also counter-productive. Without gaming the system (finding ways to manipulate and abuse others out of their money) you really aren’t going to get much past a few million.

Think of it like a role playing game. You might play for months. One day you decide to cheat and enable “God mode”. I promise one week later you will have no interest in that game–pretty much ever again.
Anonymous

To follow on to #22, 24 and 25 – as usual, it figures that a book like this is about the people who lose it all after they win the lottery.

That, after all, is the only lottery story that will make normal people like us feel good or even smug.

I mean, who would want to read a book full of stories of people who won the lottery, were smart, and now enjoy a life none of the people reading this will ever enjoy?

Exactly.

Good news stories don’t sell very well – just ask a newspaper.
mype4nut

Yes, loving the book cover design! Very clever. So much better than the (presumably) first cover that is shown on the linked Amazon listing.
Stefan Jones

I had a neighbor, a teen kid from a impoverished and troubled family, who won $300,000 in an injury lawsuit.

You can write the script: Fancy truck, travel, shady friends. He was dead — drug overdose and/or drowned at a rental property in Hawaii — within a year or two.

* * *

If anyone ever does win a lottery . . . first thing to do (well, after hiding the unsigned ticket) is to find a tax attorney and have him set up a trust for you, with you as the owner. Kind of like a personal shell corporation. You can divide up ownership among family members at this time if you wish.

The ticket gets submitted in the name of the trust . . . not you.

Why? Lottery administrators publish the winner’s name and town, and if it’s an anonymous sounding corporation then there’s no way for random spongers to contact you.

You still need to learn to deal with your new wealth responsibly, but at least you won’t have to deal with strangers begging you for help.
Hootie McBoobie

Old joke: Farmer wins the lottery, reporter asks him what he’s going to do with the money. Farmer sez, “Oh, I reckon I’ll just keep farming ’til it’s gone…”.
gollux

Easy come, easy go…
Ocker3

I read one great statement by a rich lady (could have been in a novel) “money doesn’t buy happiness, it buys convenience.”

so if you’re happy, more money probably won’t make you happier, if you’re sad, it may very well not make you happy.

Just like many of the other events which have a significant impact on your life, winning the lottery will tend to make you more like yourself, whatever that is.
Lobster

If you’re moving at a slow speed, it takes time to notice a misalignment and you have time to correct. If you’re moving at a high speed, it becomes much more obvious, much quicker.

You look deeper into these sob stories of the poor winners and you find that they didn’t know how to handle money even before they won. Give them more money to mismanage and it becomes more apparent.
MikeKStar

My father-in-law won 1/2 Million at the dog track some time ago.

Same old story: blew it all on friends, kids, hangers-on and a failed restaurant venture.

The insufferable SOB is flat broke and destitute today. Some people don’t deserve to have money.
Anonymous

@Brainspore,

I laughed at that…just wanted to clarify that taxes are not voluntary.
Kennric

I’m skeptical. Every week or so, someone in this country wins millions from state or multistate lotteries, there are thousands of such millionaires – we hear a handful of stories (often some repeats) about miserable and foolish lottery winners, but the ones who are sensible, responsible and smart don’t have salacious tales associated, so we don’t hear about those. The author of this book dealt with, almost as a fundamental condition of his job, the ones who were already in trouble.

I can pull the same trick with virtually any subject, I can tell you some stories about urban bike accidents that would convince you that riding a bike in the city is certain calamity – ff you didn’t already know that millions of people do it and only a small percentage of them get hurt.

Sure, if you are the guy who pawns a ring to buy tickets, probably it isn’t going to work out well. If you are a normal, intelligent person who buys one on a whim, or who is given some tickets by a relative as a holiday gift (they always give me scratch-offs, though, for some reason), then you probably have a decent chance of handling it ok.

Oh, and those that find the burden of money too great for one reason or another always have an easy out, just give it all to charities.

All in all, I’d still rather win one than not.
simonbarsinister

I never won a lottery, but I did sell my Internet company for a couple of million dollars. After partners and taxes I got almost a million for myself.

In short order a relative I’d never met who lives in another country needed money “to pave the dirt roads” in his hick backwater village.

My best friend asked me for $40,000 to give to his foreign relative whom he had never met so they could leave their poor war torn country. He told me that this relative whom he had never met promised to pay it back, so it was ok.
Since this friend himself was chronically unemployed he also asked me to hire him in a management position, and give him equity in the company, but not to do it “as a favor” because he didn’t want any favors.

Another close friend couldn’t understand why I was still working and didn’t retire at 30 now that I was a millionaire. (hint: You can’t live off a million dollars for 40-50 years in New York)

*sigh*
People get weird when money is involved.
Brainspore

@ SimonBarsinster,

It sounds like you need a personal assistant to manage all those parasites who keep bugging you for money. I could make myself available for $250k a year (plus benefits).
Bevatron Repairman

I used to work at a very large law firm in San Francisco and one of the partners there (who I assume made in the $1M-$1.5M range) cleared, IIRC, about $14-18M in a lottery win. Still worked insane hours. Still was kind of a jerk.
mypalmike

My best friend asked me for $40,000 to give to his foreign relative whom he had never met so they could leave their poor war torn country.

This is why I avoid making friends. You know, in case I find myself wealthy some day.
cmpalmer

Regarding the “Bud” Post story of the guy who won $16.7 million and died in debt. An adult with that kind of financial history with $3 to his name who pawns a ring to buy lottery tickets *probably* isn’t going to be wise enough to deal with the winnings.
angusm

@LOBSTER wrote
You look deeper into these sob stories of the poor winners and you find that they didn’t know how to handle money even before they won.

Well, obviously not. The fact that they were buying lottery tickets is proof of that.
Anonymous

I actually read this book after impulse buying it on Amazon last year. It turned out to be mostly about the life of a young man and his adventures. It was NOT a book about winning the lottery, or what to do if you do, etc. Parts of the book focused a bit on his experiences trying to sell lottery winners on structured settlements, where the firm he worked for bought winners lottery shares for a fraction of the total value. Basically, he did detail his sales pitches and his career at the firm. And, he did mention his success at the firm, etc. But nothing about winning the lottery. I bought the book thinking it was about people who won a lottery and their experiences, which is how the book was promoted on Amazon and other places. After reading it I really felt like a sucker. This young man is probably a good salesman (he sells himself very well) and managed to convince a publisher that anything using the lottery theme was sure to sell. Guess he was right. But, please heed my warning: this is not a book about lottery winners, but a rather boring story of a man who sold structured settlements to winners. If that interests you, then buy it. If not, I’d keep your money.
Anonymous

Two orphans + 1.5M life insurance = mayhem.
One is on skid row, the other invested, saved and continued working.
It is devastating.

There NEEDS to be some responsible literature handed out with lump sum insurance and lottery payments.
Anonymous

What, no mention of the brilliant book cover design!
Cicada

Seems like it’d be reasonable to put aside two thirds of your winnings, then blow the remaining third on things you think will make you happy. You may then spend the remaining amount having learned what will or won’t make you happy.
Money’s like anything else– it takes practice.
Halloween Jack

A lot of people in this thread seem to think that they know more about handling that sort of fortune than the people who have actually had to do that. I wonder about that. I think that it would be a completely different skill set, particularly once you get into the seven-figure post-tax range, and particularly in this economic climate after so many people who did have an idea of how to manage that much money lost it because the rock-solid firms that they placed their trust in turned out to be not so rock solid after all.

I re-evaluated my lottery dreams after reading a couple of articles; one was about a Chicago man who won a million-dollar payout, in installments, and had gone through it all by the time the last installment arrived–he’d given some to friends and ended up losing the friendships when they asked for more and didn’t get it, he invested in a lakefront condo that plummeted in value after a developer built another building that blocked the lake view, invested in a business that failed, and so forth–he’d made a number of decisions that, individually, weren’t so bad, but that he wouldn’t have made if he hadn’t had the money. The other was about an MTV “Instant Yuppie” contest winner who’d crashed his BMW and was disabled for life, and also broke.

I ended up deciding that, if I did win the lottery, I’d have to spend at least a year learning not only how to manage the money (figuring out what to do with it, and who to hire, and how to set up safeguards so that the people that I would trust with my money wouldn’t pull a Madoff and make off with it), but renegotiating my relationships with friends and family, some of whom I may not have relationships with any more because they couldn’t get past the fact that I had money and they didn’t. (I could just about list who would be first with their hand out, and how they’d fuck up their lives if I gave them more than a token amount, and how they’d blame me for it.) And, yes, I’d have to be very, very careful to avoid ending up like Chris Farley and exploding my heart while doing cocaine and heroin with some whore in my Chicago lakefront condo.
sparklemotion

There was a fascinating thread on reddit a while back, where a reasonably smart guy who won $30 million in the lottery responds to questions about his life now. Besides the fact that he played the lottery in the first place, he’s pretty much my role model:

linky

Some points of interest:

He set up a trust in his name, run by accountants he trusts and audited by an independent firm. The trust pays him a salary, which he has to go through a _lot_ of work to change.

He decided to visit every country in the world after he “ran out of beaches”!!!?!

He has a personal weed grower on staff developing new strains for him in Amsterdam.

He can’t really date nice girls anymore.