Filed under: Personal Finance, Dr. Boyce Money, News
Some of us saw the story about the woman who won the lottery as a teenager and blew her money on cocaine and shopping sprees. Bad idea. As a Finance Professor, I thought I would make a quick list of things to think about if you ever win the lottery.
1) Don’t buy the damn lottery tickets anyway – Your probability of winning the lottery is incredibly low, and state governments use lotteries as a way to manipulate the fantasies and desmoney savingperation of the poor for an additional source of tax revenue. The best use of your lotter money is not to buy into the lottery. Save that money instead.
2) Drugs and gambling are very bad ideas – Just ask Antoine Walker, the former NBA star who went to jail for not being able to pay his gambling debts. Antoine has not gotten involved in drugs, but many athletes and entertainers have. An insatiable appetite for dope, combined with a seemingly infinite amount of cash is a recipe for financial disaster.
3) Getting caught up with the bling – For some reason, African Americans have a strong fascination with status symbols. We like to make sure that everyone knows we’ve won the lotto, and some of us seem to think that having the nice car, big house and fancy clothes will make our point. The problem with status symbols is that they are not only a waste of money, they are also the quickest way to draw “haters” and “hangers,” all of whom expect you to solve their financial problems. Personally, I’ve learned the value of keeping my financial situation to myself: no one needs to know how much money I’ve got.
4) Becoming a one-man charitable foundation – Related to point three, the truth is that endless amounts of generosity can be the very thing that destroys you. I have a friend who took the millions she made from her small business and paid bills for every relative within a 1,000 mile radius. Well, when her business hit hard times, those same people were not willing or able to help her out of her predicament: She’d become everyone’s hero but had no hero of her own. Be generous and charitable; just put a concrete limit on how much you give away.
5) Not keeping accurate records or a budget – If you don’t keep a budget, you are going to waste a lot of money, period. If you bump into a ton of dough, find a good financial advisor so you can enjoy your cash and keep your stash, all at the same time. It’s not about being miserly, it’s just a matter of being mature and balanced.
Be smart, be educated, be prosperous. Life is too short to be broke.
Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of “Financial Lovemaking 101: Merging Assets with Your Partner in Ways that Feel Good.” To have Dr. Boyce commentary delivered directly to your email, please click here.
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