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« MND: Facts About American Millionaires | Main | Changes at Free Money Finance »

September 15, 2005

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If people can't manage their money properly when they make $40,000/year, what makes them think they can manage millions? Many people will always live paycheck-to-paycheck no matter how much money they make.

Rather than blow all the money, I'd be inclined to pay off my home (which I love) and replace my wife's aging minivan (but not with something horribly expensive, we just don't live that way). I'd also be looking for some serious investment advice from people I trust and do a few nice things for family and make some small contributions to charities we believe in. Ideally, we'd be able to take some small actions (family, charity, etc.) and then spend some time figuring out what to do next ... how to invest, what to invest in, how our life plans might change as a result of the new income ('cause I'd rather continue to make money off of the winnings than blow it all up front). It sounds so easy, yet it seems to be so hard for most lottery winners ... I can only hope that: 1) I someday were to win (which would mean I'd have to play the lottery) and 2) I could hold to the financial plan without completely losing my head in light of the financial windfall.

In case anyone hasn't noticed the pattern. Thousands have won lotteries in this country over the last 30 years. Many didn't do as lousy as these eight. You should notice that all of them don't know how to manage their life. Period. They not a single idea of what "wealth" is. Either are people around them. Even people surround them didn't help blow the loot away, they would've gamble them away, or spent them on things they shouldn't be. Think MC Hammer.

If I have won any sort of monetary contest (I didn't, but my wife did. And no, it wasn't lotto), I would follow two rules that my hero Warren Edward Buffett gave to the American public,

Rule #1, Don't lose money
Rule #2, Don't forget Rule #1

Since you're an MND fan - in The Millionaire Mind, Dr. Stanley notes that the richer a millionaire is, the less likely he is to ever play the lottery.

Tomorrow night i will be playing the mega millions an it is a estimated 220 million. and if god helps and blesses me with the winnings, i will truly help my most immediate family members on both sides of the family then i will go and just buy a nice house, a car, extra-cab pickup truck (NOT FORD), and just make a nice donation to a local church. and of course change my home and cell phone number.

Cathy, of course a millionaire is less likely to play the lottery. S/he doesn't need the money.

I'd pay off my car and mortgage and then just invest the rest of it. I've already made it abundantly clear to my friends and family that I don't loan money. At all. If I give someone money, it's a gift that I don't expect to be paid back (because we all know how loaning money causes problems with friends and family). But I'd only do that in dire circumstances, and most likely none of them would have those dire circumstances.

I think it's important to make it known how you handle your money now, even before getting a large sum of cash. That way family and friends should know what to expect.

good

With some of the comments above, I see some glimmers of what caused those in the articles to lose the money (purchase of new home, car/truck, helping out others). While those are not bad things, more reasons to spend the money will pop up, and soon, it is all gone.

Many of us will actually see a large sum of money at some point in our lifetime as we may be recipients of inheritances.


If you don't want to lose it, one strategy is to put the money into investments and then enjoy proceeds from the interest/gains. Just keep protecting the principal.

If I won a few million dollars I would pay off anything I was currently paying interest on. Then I would invest the rest i.e. stocks, bonds, mutual funds, CD's, etc. I would definetely NOT quit my job. Not for a "few" million. A million dollars won't even buy you 200 acres of prime farmland in the midwest nowadays. There is roughly 23,000 acres in just one township with 20 townships in my county. That should put things into perspective for most. Don't get me wrong a "few" million would be welcome in my bank account, but I most certainly wouldn't make any drastic changes to my lifestyle. 30 million plus? That might be a different story.

If I won the lotto...hmm..say the Mega Millions..simple..
To get it out of my system, take a million and buy everything I ever wanted,,
A Grady White Bimini 306 fishing boat, a Boston Whaler shallow running boat, a Ford F450,
A KZ Escalade 5th wheel trailer home, restore my 68 camaro SS to it's stock condition, build a house that has 5 BR and 6 1/2 baths with a screened in porch and outdoor kitchen area, 20 acres near Canyon Lake Tx,
Parent's house is already paid for as is mine...
As far as the rest, low risk mutual bonds and CDs to make the money work for me.

my comment is...Most (not all) who play the lootery (sic) do so because they don't believe they can build financial wealth by working-most who play the lottery are not mental giants, if they were, they'd realize that by saving their money instead of wasting it on the lottery (putting it in an IRA for example)over the years they may have a million bucks, but no, they wan't it right away- the 1 in a million that do win (beacuse they tend to be ignorant and by definition-GAMBLERS-) have no clue what to do with the winnings- being gamblers, they often "INVEST" in schemes to double their money (because for these losers, probably working for minimum wage all their lives, a $10,000,000 winning is no longer enuff- they have to double it!!!). They'd be better off putting in a couple of safety deposit boxes (or a regular no risk bank account...that pays one or two pct. interest per year-at least they won't be risk for losing the principle!!!

I take offense to the above comment. I DID invest when I was making enough to do so. But now, making min wage, I simply can't afford to. In fact, I've effectively exhausted my previous investments just keeping my head above water. Could I have done better? Theoretically...but I'm no genius. A lottery ticket is a salve of hope.

if i was blessed to win a lottery,i would pay off the mortage on my house,get a new car,mine is a 1986 buick. get my kids their own houses, give to my parents, church, and give my seven brothers some money,i am the only sister,and redo my house over and make investments in wal mart and sams club something taht will give me a return on the money and buy shoes and clothes for the residents at my job pick one family in my town that is trying to raise kids and live the right way, a single parent home and remember where i was in my life before winning this money

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