In August of 2001, David Lee Edwards won one fourth of the Powerball jackpot. After taxes, his share came to $27.1 million in cold, hard cash.
In less than 5 years, David and his new wife Shawna were living in a storage unit, after coming to the end of the money and losing their $1.5 million mansion.
Shawna left David not long after the money ran out. David then spent the last 7 years or so broke before dying alone in a hospice, reportedly thousands of dollars in debt. He was only 58.
David leaves behind not a single penny for his daughter Tiffani. She now works as a clerk at an amusement park.
There are many lessons that could be learned from David Lee Edwards’ tale. For one thing, a prudent couple could easily be set for the rest of their lives on less than one tenth of the resources Edwards and his wife had.
The frugal and well-advised could probably even do it on a twentieth the amount.
And that’s in reasonable comfort, for the rest of two people’s lives, without ever working again, and even having something left to leave to the kids.
But with David and Shawna, it was all gone in less than five years.
Another lesson is: Exercise some prudence and humility. If you’re a multimillionaire, don’t try to live like a multibillionaire. If you do, don’t be surprised when total poverty is the result.
Also, if you have any interest in drugs, then you’d better get yourself seriously sorted out, or else find a way to restrict yourself from blowing through your fortune. The same may be true if you’re inexperienced in managing money.
And you’d better find ways to restrict those you hire from fleecing you, as well.
Another lesson — and this is a big one — Good intentions aren’t enough.
David wanted to be responsible. He wanted the money to last. He wanted to leave a legacy for his daughter and future grandchildren. He even said so. In fact, it was one of the first things out of his mouth.
But the world doesn’t give a fig about your good intentions. It only cares about what you do.
And David Lee Edwards didn’t do the things that go along with either living a long and happy life, or holding on to your fortune.
Here’s one of the cold, hard truths of life: Winning the lottery is just money. It doesn’t change your nature. If you were a screw-up before you won the lottery, then winning the lottery isn’t going to automatically make you a success.
The good news it that it will give you the opportunity to have enough space and resources to reform yourself. But unless you actually put yourself onto that path, and keep on it just as seriously as if your life depended on it — because it well may — you’re only going to keep being a screw-up.
Only now, you’ll be a screw-up with money. Enough money to fail spectacularly. And the entire world is going to know you’re a screw-up.
And in the end, the money will do you no more good than it did David Lee Edwards. Dying penniless and alone at age 58? I don’t call that a benefit.
Finally, what’s the good of hiring a financial advisor if you’re not going to follow his advice? David Edwards seems to have enjoyed joking about how upset his spending decisions were making his financial advisor.
The value of a financial advisor is not in showing him off as some sort of status symbol. It’s in getting good advice from him, and then actually FOLLOWING good advice, so that you don’t end up as Edwards did.
If he doesn’t give good advice, then get an advisor who does. If he does give good advice, then follow it.
What David Lee Edwards seems to have missed at the time — when he was making fun of his upset financial advisor — is that the joke wasn’t on his advisor — it was on him.
The advisor wasn’t upset over David’s unwise use of the advisor’s money. The advisor was upset over David’s unwise use of David’s money.
And the advisor was only in danger of losing a client — which he did.
Edwards was in danger of losing his fortune and his life. Which he did.