What I learnt from an uncle who won the lottery

[RogueInnovation]

He was a pretty smart uncle, so he didn't do anything too lavish with it like you normally see people doing, but in the end his plan of being rich off the lottery failed and I think I know why.

Most people have slowlane goals, they think that having a lot of money can then become compound interest and you are set for life or whatever. But when he got that cash the reality was much more brutal than he expected. There really are not any great "slowlane investor" plans for lottery winners set up to do what these guys first think of.

The reality is that society isn't set up for slowlane goals, its set up so that you never really reach them. Having that money doesn't give you a fantasy, WITH a limited amount of money you try to BUY that fantasy in a world where it just doesn't exist like you expect.

Long story short, having money, doesn't make the slowlane plan a lot better. Did it let him pay off some debts? Sure. Will he make all that money again by working and saving? No, cuz its not a straight sum game like that apparently.

What I learnt is that winning the lottery is for "talk", its a "stunt", unless it parrallels with a higher understanding of how to leverage that cash, it is going to find itself in a desert. In short, its an action fake that tries to say "I have money so now I'm better with money".

What ends up happening is "so what happened with that money?" "oh that, its an interesting story, but half did this and half did that and it didn't go as far as I thought" "hmph, ok... good weather"

I think that nothing can really replace a great head on your shoulders, because "common sense" + money, does NOT equal success.

Key lesson: Money can't buy a slowlane fantasy, because the slowlane fantasy is heavy, money hungry and emotionally doesn't have any legs.
He HAD common sense! So the lesson is "wake up!!!" your common sense slowlane ideas are unrealistic, time consuming, and take money to sustain!

 

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[MMatt]

I think it is pathetic hearing about multimillionaire lottery winners losing all of their money. Out of all that money, selfish desires were fulfilled rather than acquiring at least enough appreciating assets or investments for cash flow.

 

[RogueInnovation]

I think it is pathetic hearing about multimillionaire lottery winners losing all of their money. Out of all that money, selfish desires were fulfilled rather than acquiring at least enough appreciating assets or investments for cash flow.

No more pathetic than their original views on money are, I think the lottery just puts how unsustainable those attitudes are on display.

Don't get too envious of THEM winning, imo hate on the "common sense" of slowlane and sidewalkin that will make YOU F*ck up an opportunity.

Personally, if a guy won the lottery and lived really cheap whilst building a few cheap startups, earnestly learning, then the cash would be good. But for stubborn slowlaners, your are totally F*cked because of your mentality first.

The temptation to try to SKIP the important mentalities you need, is a KEY to poverty.

 

[FastLearner]

He was a pretty smart uncle, so he didn't do anything too lavish with it like you normally see people doing, but in the end his plan of being rich off the lottery failed and I think I know why.

Hate to say it but if he was really a smart as you say he was, I don't think he would've lacked the common sense to invest it. Duh :tdown:
A slow laner can stay rich with lottery money if he invests wisely. I guess having a fast lane mentality really is all about having the common sense to see what others don't realize.
He basically squandered FREE MONEY.

 

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[Lauryn]

Interesting. I wonder how many people came to him asking for money. How much in taxes he owed his city, state and the federal government... how many people felt entitled to his earnings. And his ability to withstand pressure to share and "even out" his accomplishment, if we were to call it that.

 

[Capital]

Lottery Addiction: Chinese Man Blows 6 Million on Losing Lottery Tickets - JohnsAddiction

 

[DennisD]

Hate to say it but if he was really a smart as you say he was, I don't think he would've lacked the common sense to invest it. Duh :tdown:
A slow laner can stay rich with lottery money if he invests wisely. I guess having a fast lane mentality really is all about having the common sense to see what others don't realize.
He basically squandered FREE MONEY.

I see myself as having a fastlane mentality, common sense, and even some discipline, but I still don't think I'm smart enough to "invest wisely".
I wouldn't "blow it" on selfish pursuits.. but I don't think I have the experience necessary to turn a million dollars into even more money... I don't think getting a million dollars would speed my journey at all. I think there are financial lessons that can only be learned by being burnt enough times.

Experience gives you that 'gut' feeling. You instinctual adapt to avoid mistakes... People who win the lottery just don't have these, and even though they can be consciously smart about what they do with the money, they haven't learned through the tough stuff to be good with it.

 

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[FastLearner]

I see myself as having a fastlane mentality, common sense, and even some discipline, but I still don't think I'm smart enough to "invest wisely".

You could certainly acquire the knowledge to invest wisely by self-education and observing the market. It's not rocket-science. And of course using your first instinct

 

[RogueInnovation]

I see myself as having a fastlane mentality, common sense, and even some discipline, but I still don't think I'm smart enough to "invest wisely".
I wouldn't "blow it" on selfish pursuits.. but I don't think I have the experience necessary to turn a million dollars into even more money... I don't think getting a million dollars would speed my journey at all. I think there are financial lessons that can only be learned by being burnt enough times.

Experience gives you that 'gut' feeling. You instinctual adapt to avoid mistakes... People who win the lottery just don't have these, and even though they can be consciously smart about what they do with the money, they haven't learned through the tough stuff to be good with it.

Really well said

 

[smarty]

He flushed that money down to the toilet. Congratulations to him!

 

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[Michael Raphael]

I understand the point you are making, you need to have the mentality and drive to create a million-dollar business to actually have that kind of money, otherwise you will lose it because you just cant comprehend the right strategies to take.

With that said, I definitely know I am fastlane(r) because if I was given 5m tomorrow, 1m of it would go to me and 4m would go into some investment.

Of that 1m probably half would be selfishly spent on me and my mom and sisters, the other half would again go into stupid pet projects that I want to start, but all in hopes of having yet another million-dollar business or at least mid 6-figures. And I may say this now, but I would try and give 10% to charity. Right thing to do.

 

[Kak]

I understand the point you are making, you need to have the mentality and drive to create a million-dollar business to actually have that kind of money, otherwise you will lose it because you just cant comprehend the right strategies to take.

With that said, I definitely know I am fastlane(r) because if I was given 5m tomorrow, 1m of it would go to me and 4m would go into some investment.

Of that 1m probably half would be selfishly spent on me and my mom and sisters, the other half would again go into stupid pet projects that I want to start, but all in hopes of having yet another million-dollar business or at least mid 6-figures. And I may say this now, but I would try and give 10% to charity. Right thing to do.

If you would blow 1/5 of your wealth on items that hold no real value you are still not making the right choices.

Also, though tithing is a common and well respected practice that I follow. You are not supposed to do it because you feel guilty for being rich. I don't feel that I owe anyone anything for having money, people that think I owe them something can go die. I tithe because I believe that blessing others who need or deserve the help is an investment. There are A LOT of positive things that happen to me that are "unexplainable". I know a few of the guys here that I am close with can probably attest to that.

 

[CommonCents]

show me a lottery winner and an entrepreneur who builds up a biz and cashes out and i'll show you the same two people to blow the money, more often than not.

Accumulating money whether it be lottery or entrepreneurship, and managing money are wayyyy two different skill sets. I've seen it time and time again.

 

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[Michael Raphael]

If you would blow 1/5 of your wealth on items that hold no real value you are still not making the right choices.

Also, though tithing is a common and well respected practice that I follow. You are not supposed to do it because you feel guilty for being rich. I don't feel that I owe anyone anything for having money, people that think I owe them something can go die. I tithe because I believe that blessing others who need or deserve the help is an investment.

I don't give charity because I am guilty. I do it because I do it. Seriously, I have been giving charity since I was 13 and first got a job its part of my upbringing also I am jewish so don't tithe, but I guess its the same philosophy. But who knows. 500k is a lot of money to give to charity, even 1/5 of that is a lot more than probably 99% of people give. As for blowing 1/5 of my winnings. I won it, I didnt deserve any of it. The fact that I invest 4/5 if not more of it into something will generate more revenue is just a miracle in the first place.

I'm also 19, I definitely am not going to call it quits cause I won a lottery (also hypothetical scenario in the first place), so I sure as hell am willing to buy myself a nice gift or two, especially something for my family. But hey, who knows. I didn't win 5m yet.

 

[Kak]

I don't give charity because I am guilty. I do it because I do it. Seriously, I have been giving charity since I was 13 and first got a job its part of my upbringing also I am jewish so don't tithe, but I guess its the same philosophy. But who knows. 500k is a lot of money to give to charity, even 1/5 of that is a lot more than probably 99% of people give. As for blowing 1/5 of my winnings. I won it, I didnt deserve any of it. The fact that I invest 4/5 if not more of it into something will generate more revenue is just a miracle in the first place.

I'm also 19, I definitely am not going to call it quits cause I won a lottery (also hypothetical scenario in the first place), so I sure as hell am willing to buy myself a nice gift or two, especially something for my family. But hey, who knows. I didn't win 5m yet.

It just sounded like you had some guilt trip feelings about having money. I guess I misread.

 

[H. Palmer]

I don't give charity because I am guilty. I do it because I do it. Seriously, I have been giving charity since I was 13 and first got a job its part of my upbringing also I am jewish so don't tithe, but I guess its the same philosophy.

What is the difference between giving to charity and tithing? I don't understand.
Is tithing like giving away on autopilot? Can you explain?

 

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[biophase]

With that said, I definitely know I am fastlane(r) because if I was given 5m tomorrow, 1m of it would go to me and 4m would go into some investment.

You can't just invest $4m into some investment. This is what athletes do and they lose their money. I'm betting the uncle in the original post invested his lottery earnings. The truth is that investing money is alot harder than building your own company.

 

[RogueInnovation]

show me a lottery winner and an entrepreneur who builds up a biz and cashes out and i'll show you the same two people to blow the money, more often than not.

Accumulating money whether it be lottery or entrepreneurship, and managing money are wayyyy two different skill sets. I've seen it time and time again.

I've seen this too, to me there is some kind of relativity thing going on.
Its almost like that if you don't have experience you are kidding yourself that in fantasy scenarios you will come out on top.
I never expect anyone I meet, despite how highly paid they are to have a surplus of cash. I've seen it too many times now that most incomes all come to zero, in general.

Ego, takes the cash. Fear for safety takes its devestating cut. Trivial and untrackable things take the rest.

I think that the idea of "having" money often is the beginning of the end. If you are aiming for money it is a RED flag that money gobbling paradoxes aren't far away. I mean, take market bubbles for example, that stuff always comes back down, and spikes don't make good stocks for the long haul..

...

Also for those thinking you can just invest it. Investing 500 dollars isn't easy for most people, so how do you think things are going to go if you do a thousand times more volume? 10 000 times more volume?
Ultimately that plan is unstable, unless you know how to hedge your bets right and manage it well. And that is so much harder than it sounds.

I mean, just for starters,
a) valuating companies and risk
b) having experience dealing with the ins and outs of brokers
c) reading behaviours of stock well

Imo, lottery winning and investing is a red herring (Red herring is an English-language idiom that refers to a logical fallacy that misleads or detracts from the actual issue. It is also a literary device that leads readers or characters towards a false conclusion).

In biz, you wanna avoid red herrings, cuz no matter the money you get, it is probably gone the next day.

 

[CryptO]

I never expect anyone I meet, despite how highly paid they are to have a surplus of cash. I've seen it too many times now that most incomes all come to zero, in general.

That's a good point and I've seen that too, simply because people tend to up their overheads as their income increases!

BTW, why is your rep speed in reverse?

 

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[RogueInnovation]

That's a good point and I've seen that too, simply because people tend to up their overheads as their income increases!

BTW, why is your rep speed in reverse?

Lol, I made a post that was percieved as negative for my first point (was trying to be realistic and honest)
Then posted a "flirty"/humourous intro thread that got hated on.
My guess is that people's first impressions were that I was a troll/dumbass, and got a trigger happy consensus.
Imo, its due to general light heartedness and clumsiness when coming to sensitivities around here.

 

[Tom.V]

Just the idea of winning the lottery is sickening to me. You didn't EARN anything, you didn't pour every ounce of your being into something to create that wealth. You literally just got lucky. With luck comes no respect. With no respect comes looming destruction.

 

[Bearcorp]

Lol learning from lotto winners.... Come on...

 

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[RogueInnovation]

With no respect comes looming destruction.

I absolutely agree. Integrity is a HUGE part of managing cash.
a) Creates passion
b) Drives your resources
c) Causes people to act smarter
d) People give you faith, favors, and leeway
e) You think on your feet to not make money but preserve relevant goals

Without it you have HORRIBLE leverage.

 

[Michael Raphael]

Haha thats exactly why! But its okay rogue... people will soon know you aren't just a troll and are resourceful. As for the tithing comment, I thought tithe was a religious thing my bad. Like give the church a tithe. Anyways... I believe the point I was trying to make is, if a random joe schmoe tries to invest he may fail, but someone who started their own business and have minor success in starting business (and I dont mean to sound conceded but someone like myself or other members in this board) will have a great possibility of wisely investing.

I think it is very easy to invest 5m just dont be so quick to do so, learn a lot about what you want to invest in, contact some hedgefunds, and really just read, read, and read some more.

 

[ALSL]

I'm going to go against the grain of the thread replies here.

Or maybe I should ask this question first: are you guys making all these statements with the assumption that the lottery winners are all idiots?

The American mega-millions lottery has gone up to 300 million before. 50% tax, that's still 150 million. I don't know about you, but if I won $150 million, what would be the point of doing anything with the money unless I loved doing it?

Even if you're technically losing money due to inflation, how many generations would it take to completely deplete that amount of money even WITHOUT interest?

As long as you're not raising a nest full of retarded spoiled children who have no sense of money management or budgeting, it'd be nearly impossible to waste away $150 million.

The only instances where I've seen that much money lost is A) gambling B) investing C) building a business.

A) gambling cause you have an uncapped amount to lose instantly
B & C) all have inherent risk involved that could drop your initial investment (which is also an uncapped amount) instantly.

Even if you're a total retard and spend $1million/year on pleasure and don't accrue ANYTHING of value, it would still take you 150 YEARS to spend it all.

That's ridiculous.

I think this thread's commenters miss the point of having money. It's fine and dandy if your PASSION is to build businesses and to pursue appreciating assets. However, the purpose of money is to set you free.

You build a business to make money to set you free. Otherwise, you would just give your profits away and break even.

Winning 10 million+ is enough for any single family to live extremely comfortably even without investing a dime or buying up appreciating assets or creating cashflow. EXTREMELY comfortably.

Spending $100,000/year on pleasure, in pure cash, is the equivalent of having a $200,000 job at a 50% tax rate... WITHOUT working.

You could still work if you wanted to. You could write, draw, dance, sing, become a serial picnicker, whatever!

This crusade against slowlaners when they win the lottery, regardless of whether or not they're wasteful of their money, is ridiculous! Even if they do NOTHING and just sit on their pile of cash, it's STILL not "wrong".

It's all about effort. Personally, worrying about your millions and millions of dollars and how to make more millions and millions is even worse than spending your money on what you want (keeping a reasonable budget in mind).

You lose sight of why you worked so hard in the first place.

This is why you see so many rich people, who should be HAPPY, being more neurotic and guarded than not. They're too afraid to lose what should pretty much be unlose-able! They're not satisfied.

The rich people who ARE happy are those that understand what money truly means. It's not the number. It's the power that money gives. The freedom. The choices.

At lottery-level money (we're not talking the tiny pools of sub 10 million), as long as you don't have a RIDICULOUS spike in lifestyle inflation, you should be golden!

This, of course, ignores all the idiots who gamble their money away.

However, it's a complete mistake to believe that the only way to maintain your money is to invest it or build a business. These two activities are one of the biggest reasons people lose money as well as one of the biggest reasons people make money. It's a double-edged sword.

James Altucher, who you should all know by now after his AMA here, is a PRIME example. 42 million down the drain. How do you even do that? By building business or investing and having it tank.

Obviously, since we're in an entrepreneurial forum, we're going to hold similar beliefs in business. However, I just want to remind everyone here that one of the biggest reasons people go bankrupt are failed businesses and failed investments. It's definitely not over-spending for pleasure. Most people have better budgeting skills than that. (Most being the operative word.)

 

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[Jonleehacker]

The truth is that investing money is alot harder than building your own company.

Actually they are the same. Exactly the same skills and learning curve involved.

People just think investing is easier because there is no barrier to entry with investing.