There was a question that University at Albany business professor Paul Miesing used to ask his students.
If the sweepstakes crew from Publisher’s Clearinghouse showed up on their doorstep, cameramen in tow, to hand them a check for millions of dollars, what would they do?
Would they dump their spouse?
Would they dump their job?
Would they try not to change anything?
The answer, Miesing said, is different for everyone.
“Once stripped away of the necessity of having money as an obsession, it’s kind of interesting to see what they’re all about,” Miesing said. “Some people would dump all those and change their lives. Some people would do what they’ve always done.”
For the few who actually gain such fortune, things sometimes go horribly wrong.
Many lottery winners do just fine with their newfound fortune, either taking the payout as it comes or managing the lump sum they receive with help from trusted advisers.
But for others — the cases that more frequently gain the fascination of the public — winners seem to implode, losing their fortune almost as fast as they won it.
By all appearances, that seems to be what happened to William and Alissia Rivenburgh, winners of $1 million from a scratch-off ticket purchased in October 2006.
They were arrested June 16 as part of a drug raid at their 99 O’Dell St. home and charged with selling cocaine. On May 25, they allegedly sold $50 worth of cocaine from their second-floor apartment.
As to their financial state, probably most telling is their inability to come up with bail. As of Friday, they had spent 10 days in jail, Alissia held on $10,000 bail, William on just $5,000.
That’s after they sold a portion of their winnings to a structured settlement firm shortly after their win, receiving about $320,000 in cash. What happened to that money is unclear. The Rivenburghs declined requests for comment last week.
William Rivenburgh’s attorney, Michael Braccini, has said his client is innocent of the drug charges.
The June 16 raid was not the first at the 99 O’Dell St. house. The home was also raided by police in February 2009, four months before the Rivenburghs’ arrest.
One man was charged with a felony in that raid and seven others with misdemeanor loitering for the purpose of using drugs. The Rivenburghs were not among those charged then.
Back in 2006, the Rivenburghs became the recipients of the New York Lottery’s 92nd prize of $1 million or more.
Winners, Lottery officials say, aren’t simply handed their oversized checks and wished luck.
They’re given some advice, too. Each winner is given a booklet outlining what they might expect, spokeswoman Jennifer Givner said.
Among the many suggestions is seeking “trusted and competent advice.”
Givner said Lottery officials encourage winners to contact a financial adviser. They also discourage going with firms that buy out payments.
Any advice, however, is just that — advice, she said. Winners aren’t obligated to listen.
“We do our best to give them a road map of what the future holds,” Givner said. “We suggest they seek the proper advice so they can responsibly deal with the money that’s coming to them. But unfortunately, we still hear stories like this.”
Winning a large amount of money can take some time to get used to, said Susan Bradley, founder of the Florida-based Sudden Money Institute.
Bradley helps train financial advisers to deal with those who have just come into large amounts of cash.
The first years can be difficult, she said. If winners can make it to year five, they usually make it.
“Most people have trouble understanding the limits of new money,” Bradley said. “It feels infinite and they quickly bump up to the limits of the new money, particularly with an amount like [$1 million].”
Winners feel that future payments can cover current spending.
Relationships with family and friends frequently change, she said, sometimes for the better, often for the worse.
Such a windfall can also change the way winners look at themselves, she said, feeling taller, stronger or more beautiful just because they have the money.
Then there’s the possibility of indulging some other tendency, such as gambling, with the extra money around.
“This is really much harder than it looks from the outside,” she said. “We sit and we want to judge them. But this is not an uncommon story.”
Making it last
In November 2006, an excited William and Alissia Rivenburgh stood before television and newspaper reporters to claim their prize.
The winnings were a welcome relief for the couple, who were raising four children, including William’s two nephews and a niece.
William Rivenburgh was deployed to Iraq in 2004. Around that time, Alissia Rivenburgh was in rehab, according to an account on Capital News 9’s Web site.
The couple planned to put the money toward a trip to Walt Disney World and home improvements. They were also helping family members pay bills.
William Rivenburgh was already the owner of 99 O’Dell St. That home is now in foreclosure, with as much as $57,000 owed, records show.
Making money last is a process, said Bradley, author of “Sudden Money: Managing a Financial Windfall.” She advocates a “decision-free zone”
Only the absolute essentials should be dealt with immediately after a win, including decisions on gifts or helping others.
“It’s nice that somebody wants to share, but they’re not going to be able to share with everybody,” she said. “They have to prioritize it and take a couple months to work through it.”
Many people would feel overwhelmed if they unexpectedly came into such an amount, said Edelgard Wulfert, University at Albany psychology professor and dean of the College of Arts and Sciences.
The temptations are there to squander the money on short-term gains, she said.
“Some people in such circumstances might lose control over their spending habits and ‘live it up,’ without considering that the money eventually will run out,” she said in an e-mail interview.
“Most people who suddenly and unexpectedly come into a lot of money might benefit from the services of a reputable financial advisor who could help them invest the money conservatively and safely,” she said.
Albany-based forensic economist and actuary Anthony Riccardi would advise someone who won such a jackpot against selling the payments.
He suggested going the opposite way and going to a reputable life insurance or similar company that could dole out the payments in weekly or monthly installments, like a paycheck.
“There’s a good economic argument to let people have lump sums: People know best what to do with their money,” Riccardi said. “In fact, “ he said, “most people are not competent to handle very large sums of money.”
Look at Ed McMahon, “Tonight Show” sidekick and famed American Family Publishers pitchman, said UAlbany’s Miesing.
McMahon died last week broke, having had to add Cash4Gold TV pitchman to his title.
“A lot of people squander what they have for whatever reason, such as buying stuff for relatives,” Miesing said. “The question is how to protect it.”