35. How To Waste A Million Dollars

I was reading the paper today and there was an article about 22 employees who won the Super 7 jackpot. They are each going to get a little over one million dollars. The thing that struck me about the article was that the day after they one they all came in and told the Boss that they were taking the day off. Two additional things stood out. One was that they earned about $24,000  a year, and two, that some of them were planning to open up their own businesses.

I predict that most of these winners will be working for $24,000 a year in five years time, most of them will have greater debt, and none of them will have their own business.

My reasoning is that they don’t have a money/success mentality. In the scheme of things a million dollars it not that big of a deal today. The average double income family can earn that much in 12-15 years and still have massive debt. To start with they were currently earning 24,000 a year after the various taxes it would leave them with less than 17,000. If this is their primary income then they are living below the poverty line. They don’t know what its like to have excess and if they don’t get sound financial advice they will pay dearly. Its like a kid in a candy shop with his birthday money. At the end of the day he has no money and a tummy ache.

With regards to those that want to start their own business, they already started on the wrong foot. To build a successful business you need to follow basic rules of honesty, integrity and respect. 22 people walked into work and told the owner “we’re taking the day off”, we don’t care if stuff has to get done today, we don’t care if you will loose a client, we are going to do whatever we want because we have a million dollars each. These are not people with successful business minds.

What would have been a sound approach.

Let your employer know that you just won the lottery and you would like to book some unpaid days off. Next take 10% right off the top and donate it to charity.

Following that pay off your debt. Debt costs money to service, get rid of it.

Then find a financial advisor and create a plan, to ensure that you can enjoy some of your windfall now, while you also plan for the future.

If you don’t like your job go find another one, your money wont last that long, especially if you buy a new house, two cars and go one family vacation a year.

If you want to start your own business you might want to go and take some business courses, because if you have been working for the past 25 years at the poverty line, you probably don’t have the tools to build a business yet.

Now before you go out and buy your next lottery ticket here is something else to keep in mind. I got the following from http://www.webmath.com/lottery.html

If you play the Lotto 6/49 your chances of winning are 1 in 13,983,816

If you are spending $30 per month on tickets and you instead saved it in an investment that gave you an 10% annual return (not hard to find), after 20 years you would have $23,500, after 25 years you would have $41,000, after 30 years you would have $70,000.

And the nice thing is that your odds are pretty much 1 in !.

What would you do if you won a million?

What would you suggest that the winners should do with their money?

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