“I’m just a lonely pilgrim.
I walk this world in wealth
want to know if it’s you I don’t trust
’cause I damn sure don’t trust myself”
— Bruce Springsteen
Why do people run through large sums of money quickly?
I’ve devoted over 30 years of my life finding the answer to this question.
When you hear about Powerball Jack Whitaker running through the millions that he received from the lottery or Alan Iverson, who has none of the $154 million he made as a professional basketball star, you wonder what happened.
It’s not just famous people who do stupid things with their money. It’s everyone.
A report by the National Endowment for Financial Education said that 70 percent who receive a lump sum, from any source run through it in a few years.
For over 30 years, I’ve worked with injury victims, lottery winners or people getting an inheritance. At first, I thought that the problem was people getting too much money too quickly. I assumed that controlling the flow of money, such as giving them monthly payments for a lifetime, would keep them in line.
It’s a little more complicated than that.
People blow through money for five different reasons.
1. Family and friends. People try to “buy” love and friendship or they feel compelled to show off by buying houses, cars, clothes and items. As Will Rogers used to say, “They are spending money they don’t have to impress people they don’t know.”
2. Bad habits, bad advisors, lack of knowledge. People who spend more than they make will not suddenly be “cured” when they get a lump sum of money. In fact, whatever problems they had will now be magnified by having more money to get in more trouble with.
3. Taking the money in a lump sum. Social Security, defined benefit pension plans and many other programs pay out money over a lifetime instead of in a lump sum. They know that people will run through a lump sum quickly and be broke. I’m in the structured settlement and annuity business and have been successful as I am not a peddler of products; I am a hard core, true believer. I know the people who are happiest are those who have a monthly check coming in that they can count on.
4. They don’t think before they act. People make impulse decisions. They think they can pay something off “over time.” Then time runs out on their money.
5. Not having a purpose for their money. My father was a professional gambler and owned bars. As a child, it would stun me to see men who had toiled all week in a steel mill or hard-labor job come into a bar and gamble a week’s pay in one night. The workers knew how to make money, but had no purpose for it.
Making sure that I never have to worry about money in old age is a purpose. Making sure my children and grandchildren are educated is a purpose. Giving to causes I support is a purpose.
Blowing money aimlessly is not a purpose.
I wrote a bestselling book about lottery winners. I tell people to do five things if they find out they hit the jackpot:
1. Never tell anyone you won. If you live in a state where you can collect the money anonymously, do so.
2. Don’t make any quick decisions. Take some time and put together a plan.
3. Take the money in payments instead of a lump sum.
4. Talk to experts who have worked with more money than you have. If you win $100 million, find advisors who have received $150 million.
5. Use your money for a purpose.
Having made the connection that people who get any kind of lump sum have the same problems that lottery winners do, I’ve taken the advice for lottery winners and distilled it into practical advice, commentary and insights that the average person can use.
The book is called “Life Lessons From The Lottery.” It will be out on Kindle on Nov. 10 and in paperback next spring.
As Springsteen noted in his song Brilliant Disguise, many people don’t trust themselves. With money or anything else.
After learning some lessons from lucky and unlucky lottery winners, it will help people trust themselves whenever their financial ship comes in.
“I’m just a lonely pilgrim.
- Lifestyles & Community
County’s oldest consignment sale begins today
The Little Ones’ Consignment Sale, Madison County’s oldest semi-annual sale of its kind, is open to the public 8 a.m. to 6 p.m. today (Friday) and 8 a.m. to noon Saturday at the multi-ministry center behind United Methodist Church, West Main Street, Richmond. Marked items are half price on Saturday.
There’s more to do at the Village Trough
“I wish there was more to do here.”
Do you ever find yourself saying this sentence as you sit there bored out of your mind? Have you heard others ask it?
Well, there is something more to do now that Village Trough in Berea is staging shows with local and regional talent and preparing to open as a full dining and entertainment venue.
Let’s have a Mardi Gras party in Kentucky
It’s the time of year when the people in New Orleans celebrate a festival called Mardi Gras. Many states now do the same. Some call it “Fat Tuesday” which I have never understood till I went to New Orleans (five times) and saw all of the excitement for myself.
Beat the winter blues with meatballs
When it’s this cold outside it’s nice to warm up with some good comfort food.
I can think of few things more wonderful than the smell of simmering meatballs coming from the kitchen while I cuddle with my two young children, and a few good books, on a brisk winter day.
Taste test Thursday
The sun is shining, but the chill has returned, so I hope you made the most of the warm, sunny weather this weekend.
The spring greens are being as tentative as the warm temperatures, but there is talk of lettuce being harvested and a continued trickle of kale, pea shoots, miner’s lettuce and spinach. To make room for the spring harvests, winter squash and sweet potatoes have been marked down to $1/pound and pumpkins are only 50 cents/pound.
Buttercups in grazed pastures
One of the signs that spring has arrived is when the yellow flowers of buttercup begin to appear, but it’s during the winter months that the vegetative growth of buttercup takes place.
As a cool season weed, this plant often flourishes in overgrazed pasture fields with poor stands of desirable forages. In fact, many fields that have dense buttercup populations are fields heavily grazed by animals during the fall through the early spring months.
Make a difference this summer, volunteer at 4-H Camp
On June 30 more than 200 Madison County kids will load a bus headed for four days and three nights of fun at 4-H Summer Camp.
Campers will have a chance to hike, swim, dance and spend time learning about the environment, their friends and themselves.
And we need your help to make it possible!
A whole lot going on
Downtown Richmond Farmers Market opening
The new Downtown Richmond Farmers Market officially opens Saturday.
This market will set up in downtown Richmond on North First Street between Main and Irvine streets Saturdays from 8 a.m. to 2 p.m. (weather permitting).
For more details, go to www.downtownrichmndfarmersmarket.com. There you will find an events calendar and how to sign up for workshops that will be conducted at the market.
A Visit with a bell-The Dinner Bell Restaurant in Berea
I have wanted for some time to visit and interview people and food establishments here in Madison County and surrounding areas that you may have not gotten a chance to visit. \
I chose the Dinner Bell in Berea for my column this week.
Extension celebrates 100 years of nutrition education
For the past 100 years, families in Kentucky have looked to the Cooperative Extension Service to learn better ways to be healthy.
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- County’s oldest consignment sale begins today