Neighbors of lottery winners more likely to go bankrupt

[disneysteve]

I've often heard that lottery winners have a tendency to spend wildly and end up in worse financial shape than they were before they won the jackpot, even ending up bankrupt. But I recently read a study that showed that neighbors of lottery winners had a higher incidence of bankruptcy too.

The lottery winners start spending money in conspicuous ways like new cars, updates to the house, travel, etc. and the neighbors get sucked into trying to keep up even though they didn't win any money. The larger the lottery prize, the higher the likelihood of the neighbors going bankrupt. I thought that was pretty interesting.

[Joan.of.the.Arch]

Wow, I'm laughing, but that's interesting. And weird.

[Nutria]

This is why lottery winners should move into bigger houses in more affluent neighborhoods!

[msomnipotent]

I read that somewhere just recently, too. Are people that jealous or that stupid to think that they live the life of a lottery winner without actually winning the lottery?

[Nutria]

I read that somewhere just recently, too. Are people that jealous or that stupid to think that they live the life of a lottery winner without actually winning the lottery?

Yes, some are. Note the "higher incidence" not "every neighbor".

[bjl584]

Wow. I've never thought about that, but it makes sense that it would happen in some instances.

[curlyrainbow]

It is in our nature to be envious of the people that are close to us. It is normal for us to be competitive and want to be better than our neighbors, but that is stupid. This shows that it does not make sense at all, but it is in our nature. I play lottery only online on 4D Lotto. It is much better and you don't have to wait for results because they have games every few minutes. It is really nice to play there and I managed to win few hundred bucks.

[Fishindude77]

Keeping up with the Jones is a very contagious illness.
In some of the work I've done, I've been privy to the personal finances of quite a few people. Folks on this forum might not be so shocked, but many wouldn't believe how buried in debt people are on houses, automobiles, toys, vacation homes, etc. Many have very high income jobs, own businesses, etc., have the opportunity to make themselves quite wealthy, but are borrowed to the hilt with very little net worth.

Go to someplace that sells high dollar toys; boats, motorcycles, campers, etc. They finance those things for ten years and more than half of all of them sold are sold on credit.

[bjl584]

Go to someplace that sells high dollar toys; boats, motorcycles, campers, etc. They finance those things for ten years and more than half of all of them sold are sold on credit.

Old thread, but still relevant.
I'll chime in on this.
Last winter, a little before the pandemic, we went to the RV show at the expo in town.
The financing on campers is the same as a house.
They actually write 15 year mortgages on them, not auto loans.
And, there were people lined up at the credit stations buying like crazy.
With Covid going on I have to wonder what became of some of those loans that were written

[disneysteve]

Go to someplace that sells high dollar toys; boats, motorcycles, campers, etc. They finance those things for ten years and more than half of all of them sold are sold on credit.

And most luxury automobiles are leased, not sold.

“High-line” brands such as Mercedes, Porsche, Audi, Lexus, Acura, Jaguar, BMW, and Land Rover are leased at the rate of about 70%-75%, depending on brand, compared to only about 25%-30% for non-luxury models, and even less for the least expensive models.

People like to look like they have money and have toys that they can't actually afford.

[ua_guy]

Old thread, but still relevant.
I'll chime in on this.
Last winter, a little before the pandemic, we went to the RV show at the expo in town.
The financing on campers is the same as a house.
They actually write 15 year mortgages on them, not auto loans.
And, there were people lined up at the credit stations buying like crazy.
With Covid going on I have to wonder what became of some of those loans that were written

RV'ing is a thing right now. It's incredible the number of first-time RV'ers we meet on the road who bought specifically because of having to cancel other types of vacations during covid.

End of 2018 DH and I paid cash for a 14 year old motorhome. We are handy, do 99% of our own maintenance and repairs, and are able to store it for free. RV'ing on a budget. During covid, we went camping and have been spending several weeks at a time on the road, not burning any PTO as we are able to work remotely. Ohhh the jealousy that caused.

A couple friends and family members have since gone out and bought RV's, financed to the gills. They went new and fancy. The RV we own has depreciated almost $100k since 2006. Current market says we can get about $10k-$15k more than we paid ~19 months ago. It costs a damn fortune to be "me too" if you don't know what you're doing!!

[Drake3287]

I bet there's some truth to that story. I have a very good life long friend that made much more money than me even in the same profession that we shared. He's always had to keep up with his wealthier family members with homes and vehicles he couldn't afford. We're both retired now and he's dirt broke with another 30 year mortgage he can barely afford. I'm in the exact opposite situation simply from living within my means.