The Richmond Register

Lifestyles & Community

October 14, 2012

Life lessons learned from the lottery

McNay's Musings

RICHMOND — “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.

1
Text Only
Lifestyles & Community
AP Video
Arizona Prison Chief: Execution Wasn't Botched Calif. Police Investigate Peacock Shooting Death Raw: Protesters, Soldiers Clash in West Bank Police: Doctor Who Shot Gunman 'Saved Lives' 'Modern Family' Star on Gay Athletes Coming Out MN Twins Debut Beer Vending Machine DA: Pa. Doctor Fired Back at Hospital Gunman Raw: Iowa Police Dash Cam Shows Wild Chase Obama Seeks Limits on US Company Mergers Abroad Large Family to Share NJ Lottery Winnings U.S. Flights to Israel Resume After Ban Lifted Official: Air Algerie Flight 'probably Crashed' TSA Administrator on Politics and Flight Bans Raw: National Guard Helps Battle WA Wildfires Raw: Ukraine's Donetsk Residents Flee Senators Push to End Hamas Threat in Cease-Fire A Young Victim's Premonition, Hug Before MH17 Raw: Deadly Storm Hits Virginia Campground Death Penalty Expert: 'This is a Turning Point' Raw: MH17 Victim's Bodies Arrive in Netherlands
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Poll

What county fair attraction do you like most?

Amusement rides
Beauty pageants
Flora Hall craft exhibits
Horse shows
Livestock, poultry shows
Truck, tractor pulls
Mud, dirt races
Gospel sing
I like them all
     View Results