Full disclosure: I plead guilty to the sin of sometimes playing the lottery. I figure it is a dollar’s worth of entertainment just to take a couple of minutes and daydream what I would do if a pink square of paper suddenly translated into millions of dollars.
Fortunately, Richmond, Ky., author Don McNay takes a more serious approach to the lottery in his book, “Life Lessons from the Lottery: Protecting Your Money in a Scary World.” McNay, a financial consultant and author of several best-selling books on finance, chooses to look at the lottery as an opportunity for understanding money — both how to make it and hold onto it.
The result is an insightful, helpful guidebook that explores both the conscious and subconscious relationships people have to money.
McNay could have begun the book with an exploration of why people play the lottery. His probing is more vital as he begins with a question that should be asked by everyone, lottery winner or not: Why do people run through money, even large sums, quickly?
Be it a lottery, inheritance or salary bonus, people often end up doing stupid things with their money, McNay says. This seems to apply not only to lottery winners but also highly paid sports stars, wealthy business people and nearly everyone else. The National Endowment for Financial Education reports that 70 percent of those who receive a lump sum from any source run through it in a few years.
Universally, McNay says, people have a problem holding onto money, particularly when received in large sums.
He compares this to how high-fructose corn syrup in food can lead to obesity. Fructose, he says, hits the body too fast for people to process it. Money, particularly big money all at once, can be overwhelming as well.
In 30 years of experience in working with injury victims, lottery winners, those who have received inheritances and others impacted by “high-fructose” influxes of cash, McNay concludes there are five reasons why people blow through money.
The first comes from those nearest and dearest — friends and family. People try to buy love, McNay says. He quotes Will Rogers in this context, “They are spending money they don’t have to impress people they don’t know.”
A lack of knowledge, bad advice or simply bad habits is the second reason. People with poor money management skills will not suddenly be “cured” if they come into money.
McNay notes that taking money in a lump sum instead of over time is a common mistake. From his experience he has found that people run though a lump sum quickly and are then broke.
