Would Winning the Lottery Solve Your Financial Problems?

Would Winning the Lottery Solve Your Financial Problems?

Some people dream of obtaining financial security all in one day by winning the lottery or through investing in penny stocks. The chances of success by either means are extremely low. The odds of winning the lottery are about 1 in 13,000,000 for single-state lotteries, and 1 in 175,000,000 for multiple-state lotteries. Yet many Americans still believe that their best chance of becoming financially secure is by winning the lottery.

Hoping for overnight success is not an acceptable strategy. I want to be 100% certain that my family will always be financially secure, and I want my clients to enjoy the same level of certainty. This is attainable by implementing timeless principles of financial security.

Even if we did win the lottery or make it big overnight investing in penny stocks, it is not likely to bring lasting financial security or happiness. Many people who win the lottery end up completely broke within a few years, divorced, friendless, and sometimes even commit suicide, because they cannot handle the publicity or permissiveness that such a large sum of money received so quickly has granted them.

How the Lottery Ruined a Winner’s Life

In 2002, Jack Whittaker won the Powerball multi-state lottery jackpot of $315,000,000. Pretty lucky guy, huh? Then why does he say that he regrets winning the lottery? Although he was very generous with his windfall for a while, he was continually bombarded with additional requests for money everywhere he went, and was sued by hundreds of people who were trying to get a piece of the pie. He lost many friends and started drinking heavily to console himself, which led to even further alienation by his community.

His greatest joy was his 17-year-old granddaughter, so he gave her four new cars and about $2,000 per week. She used much of this money for drugs, and eventually was found dead behind a junked van. Jack Whittaker is convinced that if he had not won the lottery, this would not have happened to her. He says he does not like who he has become, and that winning the lottery has ruined his life.[i]

Learning Stability and Responsibility

How can winning the lottery be so detrimental? This phenomenon proves an important point. If we cannot learn to take responsibility for our own well-being and consistently put our money to best use, we will never be able to maintain financial security, regardless of how much money we receive. We must always exercise prudence and keep our wants in check. We must also be generous with others, but find ways to give that do not absolve them of personal responsibility or train them to expect a hand-out, so that they do not fall into the same debilitating trap that lottery winners do.

We can find great safety in living these principles and great joy in sacrificing to build something. I love the feeling when I reach the top of a very tall mountain after hiking for a few days. I have often contemplated how much less glorious the view at the top would appear if I had just been dropped off by helicopter because I would not have earned it through the hard work, patience, and determination that hiking requires. Likewise, we should find joy in the journey towards financial security and stop trying to get rich overnight for two major reasons:

  1. Most of us will never become rich overnight, so we need to stop daydreaming, stop wasting our precious resources on big bets that are not likely to work out, and focus on obtaining financial security in a way that is attainable.
  2. Those of us who do become rich overnight will truly have been robbed, because we will have missed out on the character building and sense of satisfaction that comes from getting there gradually through discipline and sacrifice.

[i] Martin Bashir and Sara Holmberg, “Powerball Winner Says He’s Cursed,” ABC 20/20, 6 April 2007, <http://abcnews.go.com/2020/powerball-winner-cursed/story?id=3012631> (23 March 2012).

 

Adam Dawson, CFP® is a Principal at Capstone Capital and the author of Timeless Principles of Financial Security.

 

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