Everyone likes an instantly wealthy person. I have a special fondness for the newly rich. No, I don’t have a business proposition for you. Nope, don’t need a loan either. I just care about you and your pile of cash. I want you to be successful like my good friend Brad Duke. (okay, he’s not my good friend and he doesn’t even know me, but I have a lot of respect for him.) Good old Brad Duke is one of the few lottery winners that hasn’t had to go back to eating Top Ramen.
Why is it that lottery winners so often find themselves broke and depressed after only a few years from winning their loot? Well, there are a ton of pitfalls they encounter. Let’s look at a few of them.
Cousin Earl:
Just about everyone has a cousin Earl. You know the guy. Scraping by month to month on a low income from an entry level job. You won’t even have the oversized 2 foot by 4 foot check in your hand before Earl calls. “Hey good buddy. I heard you won the lottery. Can you help me out a bit? If I can just get a little bit of cash, I can finally get myself out of this dead end future and on to bigger and better things.” Earl most likely won’t boost himself up with your new winnings. There’s a good chance that Earl will hire himself a few working ladies and buy a few rounds at his favorite watering hole. Don’t give Earl a nickel.
Old high school buddy:
Geez. You haven’t talked to old Bob for 20 years. It was great to hear his voice. I’m sure it was a coincidence that Bob called you two days after you won the lottery. I bet he just saw your name in the paper and said, “Gosh, I haven’t seen him forever. I’m gonna see what he’s up to.” Except, Bob knows what you are up to. You are up to your eyeballs in cash and he wants to get a little taste. Tell Bob it was good to hear from him and you’ll give him a call in 20 years.
Concerned Citizens for the Preservation of Spam:
Spam (the meat byproduct) is an important part of our society. Hell, it’s an important part of this world. Of course that depends on who you ask. If you ask the Concerned citizens for the preservation of Spam, they’ll tell you that there is a serious crisis. Spam sales are down. The security of our country is at risk. I mean, if we had a huge man made or natural disaster and the assembly lines weren’t cranking out adequate volumes of Spam, we could all starve. It’s all crap. Don’t worry. We won’t all die if they don’t build a museum of Spam history. We’ll be okay if you don’t personally give some of your newfound wealth to Spam Incorporated. Hint: Don’t get too caught up with the Spam theme. If you win the lottery, you will be approached by every organization on the planet asking for money. Tell them all to move on. There’s no gravy for them in your gravy train.
Are you starting to get the idea? Before you give a cent of the money away, think about how this money could benefit you in the future, as well as some well thought out charities or family members. The key here is to get the money working for you.
Now, substitute lottery winnings with a few other windfall situations. Inherit some money? Same rules apply. Just hit it big with the latest tech stock? Same rules apply. Is there a huge fountain of thick black oil coming up out of your lawn? Same rules apply.
Money is not a “here and now” thing. If you win the lottery or come in to a large amount of money, stop thinking about the lump sum you are going to receive and start thinking about the income that lump sum is going to generate for you. If you win $10 million dollars, it’s not really $10 million dollars. It’s more like 5% of $10 million dollars each year for the rest of your life. For all of you liberal arts majors (myself included) that comes to $500,000 every year for the rest of your life.
Okay. Now that we’ve got all that out of the way. If you recently won the lottery and have found any value in this post at all, please send a large donation to:
ELYM
PO Box 55543
Seattle, Wa 59102
Or better yet, leave a comment and I’ll contact you shortly. (and by shortly I mean, the second I read your comment)