“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
Community invited to celebrate Mary Tate Weitkamp’s 80th Wednesday
You are invited come to Union City and celebrate Mary Tate Weitkamp’s 80th birthday on Wednesday night, Dec. 18. The party will be 6 p.m. at the Union City Ruritan. They request no gifts. Just bring a picture, card or a smile. Cake and punch will be served.
Christmas is less than two weeks away
Hello from Baldwin.
How is everyone’s week going? I hope everyone is having a great one. I also hope you are staying warm and safe.
Snow and cancellations allow us to slow down
Oh! What a great morning this Tuesday, Dec. 10, with a light snow falling and the sun is trying to shine. Isn’t life just wonderful!
Richmond’s Christmas parade is Friday night
Do you have most of your Christmas shopping done? If not, take a deep breath of air, make a hot cup of tea to clear your mind and schedule an upcoming day to finish your task.
Better safe than sorry with bad weather is forecast
How did you like the “snow day” on Tuesday?
Better safe than sorry, right?
According to the weather forecasters, more of the white stuff may be falling this weekend.
Ice forecast brings back memories of big storms
I am glad that this weather has been a hit or miss for us.
Al, Alice & Ruth holiday concert Saturday
The Al, Alice & Ruth Holiday Musical Special is scheduled 7:30 p.m. Saturday at the Berea Arena Theater. The show will feature special guest Richard Bellando. Featuring the sounds of banjo, guitar, mandolin and bass, the show will include both traditional tunes such as “Jingle Bells” and “What Child is This” and new Al, Alice & Ruth originals, “Caroling in the Snow” and “Starlit Lullaby.” Admission is $5.
Cold-weather horse nutrition
Winter may not arrive officially until Dec. 21, but wintry weather is already here.
Consider these ideas for feeding your horses this winter.
The first thing every horse owner should do is assess your horses’ body condition scores, or the amount of fat they are carrying.
This is simple numeric system, ranging from 1 to 9 that will help you adjust your horses’ diets so they are carrying the perfect amount of body weight.
Choose the right Christmas tree
When choosing a Christmas tree, freshness is the key. To ensure that your tree has optimum freshness, it is best to cut it yourself.
Now, that is not to say that you need to cut one out of your or your neighbor’s yard, but there are several tree farms in central Kentucky.
If you decide not to cut your own tree, there are several tree lots to choose from in the area. Many of the trees found on tree lots will probably not have been cut locally, but instead shipped in from other states such as North Carolina or even Colorado. Ask the vendor where the trees are from.
Winter chill means it’s soup time in Kentucky
I love the winter months because I can try some new and different soups. I use the crock pot for most of all my soups. Here are some recipes you might like to try.
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- Community invited to celebrate Mary Tate Weitkamp’s 80th Wednesday