J Garza CPA PLLC

From MSNMoney.com

Ken Proxmire was a machinist when he won $1 million in the Michigan lottery. He moved to California and went into the car business with his brothers. Within five years, he had filed for bankruptcy.  "He was just a poor boy who got lucky and wanted to take care of everybody," explains Ken's son Rick. "It was a hell of a good ride for three or four years, but now he lives more simply. There's no more talk of owning a helicopter or riding in limos. We're just everyday folk. Dad's now back to work as a machinist," says his son.

Willie Hurt of Lansing, Mich., won $3.1 million in 1989. Two years later he was broke and charged with murder. His lawyer says Hurt spent his fortune on a divorce and crack cocaine.

Charles Riddle of Belleville, Mich., won $1 million in 1975. Afterward, he got divorced, faced several lawsuits and was indicted for selling cocaine.

Read more at http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney/8lotteryWinnersWhoLostTheirMillions.aspx.

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If you are one of the few who have acquired a large amount of wealth quickly, there are five steps you need to take to handle the money wisely.

1. Take time out to realize what has happened.  Don't make quick, rash decisions, don't buy a house, enter into a business agreement or committ your wealth to any project.  Just relax, there'll plenty of time to spend money.  Make time for planning.
2. Get organized, work out in your mind what decisions you will need to make. Put your money in a money market bank account until you've completed the 5 steps.
3. Prepare a spending plan.  How much money do you have, how much will you receive, when will you get the wealth?  How much would you like to donate?  What have you always dreamed owning? Get a spending plan set up.
4. Examine your personality and priorities, many suddenly wealthy individuals don't spend enough time considering the emotional aspects to their wealth.  You must have a solid foundation before you spend any money or you may not be able to stop spending all your money.
5. Assemble a financial team.  Get together a CPA, estate lawyer, financial planner and investment adviser.  Get trusted individual who's personality and philosophy agrees with yours.   Team up with individuals who are grounded and understand the concepts of wealth and godly principles.

Call J. Garza CPA for help developing a five part plan to deal with sudden wealth 

Call 734.307.7923

or send me an email at jgarzacpa@jgarzacpa.com