by Daniel Scott Johnson
Jay Sommers should have had it made in the shade. He should have been set for life. In 1988, he won $5 million in the Michigan state lottery—at the ripe age of 20. In fact, he was Michigan’s youngest winner. Yet when the New York Post caught up with Sommers in 2022, all that money was… gone.
Here’s Sommers’ account of how it all went wrong:
I put money in a trust fund and the trustee embezzled $2 million from me. I went into NASCAR and that was fun but expensive—it cost me $200,000 per year. I raced in Daytona and finished fourth. I quit college, which was idiotic. I wound up suing the trustee and won [in excess of $1 million], but he threatened to go bankrupt. So, I settled for $800,000. My lawyers got $380,000. I spent about $200,000 on the trial, which I did not know I would be responsible for.
As reported in the same piece, nowadays Sommers works as marine mechanic, fixing boats. Saddest of all, according to him, winning the lotto, “ruined my life.”
Of course, a sudden wealth event like Sommers’—otherwise known as a windfall—is the stuff of legends. Most likely, you have even played a related game in your head: What would I do if I won the lottery? Returning to Sommers, he likely had big dreams of how he would (wisely) spend his fortune, expecting that he was set for life.
As we know, it didn’t turn out that way. That’s because receiving a windfall is only the start of your story if you happen to come into a large sum. The course you set after sudden wealth can put you on a path to a solid, stable financial future. Or it can lead to immense waste, foolhardy actions you may regret, and the unraveling of your finances.
Beyond Sommers’ tragic tale, countless others exist of Lotto winners who lost it all, not to mention, star athletes who squandered their fortunes. Less publicized are heartbreaking stories of burned-through divorce settlements or inheritances. So, why does this same disturbing pattern occur so often? Why do so many people who come into sudden wealth lose it all?
Writing for Huffpost, critical thinking expert and psychological performance coach Steve Siebold, CSP, describes 5 key reasons:
- Emotional Delusion: No matter if it’s a high-priced athlete or performer, the person mistakenly believes they will never outspend their riches.
- Ego: Dollar signs can go to people’s heads, influencing their behavior.
- Overconfidence: Armed with a sudden fortune, they believe themselves incapable of making the wrong move.
- Vanity: The need to be viewed as special or better than others can also blur a suddenly rich person’s thinking.
- Lack of Education or Experience: Those who didn’t grow up learning solid investing/finance principles are bound to make mistakes.
Not listed in these categories is the biggest threat I come across: bad advice. When someone has or is about to come into sudden wealth, they often don’t know what to do with their fortune. Unexpectedly coming into money is amazing and wonderful. But it can also be overwhelming and stressful.
If you find yourself in such a situation, it’s a good bet others will come to you with their opinions and feedback on what to do with all your new money—even if you never asked them for such guidance. Fortunately, you don’t have to rely on such poor advice. You can turn to me, your Sudden Wealth Defender. I’m a trusted advisor with a proven track record of walking inexperienced investors through even the thorniest financial decisions using simple language to empower my clients.
For over half a decade I was part of a three-generation, thriving commercial real estate development business in Illinois. Here I worked on major financial deals, including sales of shopping malls, office buildings, warehouses, and land development deals. Eager to build my own legacy, I left the real estate business to work my way up on Wall Street, becoming a top financial advisor at two prestigious firms.
I started my career as a financial advisor at Merrill Lynch during the turmoil of the 2008 financial crisis, joining a team responsible for managing over a billion dollars in assets. Over several years, I grew my client base to over $50 million of assets under management. Impressed, Morgan Stanley’s Wealth Management team recruited me. I was recognized as a Rising Star by Morgan Stanley in 2016 where I remained for over four years until leaving in 2019 to start my own investment advisory- Windfall Advisors. (Windfall Advisors is a Fee-Only, Fiduciary, RIA Registered Investment Advisor with a perfect regulatory practice with SEC and FINRA for all 13 years in practice.)
Now, let’s talk about how I work with you. The overall goal of investment management and financial planning services is to grow your funds to meet your financial goals with a minimum amount of risk. Here are the steps we shall take together on this financial journey:
Step 1: Establish and define our scope of work.
Step 2: Gather information, identify values, and set goals.
Step 3: Analyze and evaluate your status.
Step 4: Develop recommendations and craft a personalized plan.
Step 5: Review and amend your plan (as needed).
Step 6: Implement your plan.
Step 7: Monitor and review.
Ultimately, it’s both exciting—and frightening to come into sudden wealth. You want a trustworthy advisor to help you make the right decisions, so you don’t go the way of Jay Sommers and so many others who lost the sudden wealth they received.
To aid with your choice of whom to work with, allow me to also share my credentials. I also a Registered Investment Advisor (RIA) with both Series 7 and Series 66 licenses. Importantly, I have a 100% unblemished record after over 10 years in the industry with zero compliance issues and zero regulatory dings. You can read recent client reviews here. Operationally, I use Charles Schwab as our client custodian. My clients benefit from Charles Schwab’s vast cybersecurity protocols and are 100% guaranteed reimbursement of any funds lost due to unauthorized activity.
At the end of the day, I excel at showing my clients how to make their money work for them. In fact, I am so confident in my ability to help you as your advisor that I am offering a complimentary 4-month trial. It’s my belief that you will see the value of my services based on this exploratory arrangement. Or, to put it simply, you don’t have to trust my words, but you can trust in the results. If you want to learn more about what those results might look like, please contact me today. I look forward to turning your sudden wealth into your permanent fortune.
Recent contribution in CNBC: Mega Millions jackpot is $940 million: Here’s what to do if you come into a large sum of money
