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Are you smarter than an NFL star? A lottery winner?

High-profile jackpot winners fritter away winnings. An estimated 8 in 10 NFL players are bankrupt, jobless, or divorced two years into retirement. Could you manage a windfall better than they do? Here are six steps.

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"Let's say you come into money and you decide to buy a Porsche," says Dan Ariely, a professor of behavioral economics at Duke University in Durham, N.C., and author of "Predictably Irrational: The Hidden Forces That Shape Our Decisions." "The first day of driving a Porsche is fantastic, but then you've gotten used to it and it's not as good. You get tired of owning a Porsche, so you renovate the countertops. But the happiness always goes back to its original level. So we keep buying and buying to get that original level of happiness."

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Then there's the pressure to help out family and friends. Newly wealthy people often have an "inability to say no to family, friends, and cousins," Mr. Hubler says. "There's a feeling of guilt for the person who has all the money."

Mr. Duke was well aware of such pitfalls when he won the lottery in 2005, so he set in motion a plan to grow his wealth. Here are six steps for anyone who comes into a windfall, even a modest one:

1. Pay down debts. As his first step, Duke paid down $25,000 worth of student loans, a bit of credit-card debt, and his mortgage: "50 percent of it should go towards servicing debt, and the rest of it towards growing long-term goals," he says.

2. Let a team (not an individual) invest. "You want multiple people not working under the same umbrella," Hubler says. "Be leery of agents who do everything, because there are no checks and balances." Hubler also suggests using financial advisers who charge a flat fee rather than a commission.

3. Space out your spending. Until two years ago, Duke kept working part time for Gold's Gym, lived in his pre-Powerball-win house, and drove a used car. "Buy a house one year, then the car the next, then the new wardrobe," Mr. Ariely says. "That way, you don't use your happiness all up at once."

4. Be kind but inflexible with family and friends. One option is to have a go-to outsider fielding all financial requests. "I'm the person the brother-in-law talks to with the idea to put the movie theater in the carwash, or whatever stupid idea," Hubler says.

Ariely advocates allocating a fixed amount of money to give away, and putting it into a separate bank account. "When it runs out, it runs out," he says, "and it's not personal."

5. A flashy investment is a bad investment. "Players like to see the money – a car, art, a new business – rather than a well-managed portfolio," Hubler says. His firm tries to steer clients toward annuities specifically designed for people who get a large lump sum. "Those programs are like forced savings accounts – like putting $500 under the Monopoly board so you can't see it until you want to buy Boardwalk," he says.

6. Set aside 'fun' money. It's OK to have a little fun with newfound wealth. Duke allowed himself one big splurge: bicycles. "It's sort of embarrassing, but I spent $100,000 on cycling equipment," he laughs. Still, he only allows himself 2.5 percent of his income for "discretionary spending."


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