Bluefield Daily Telegraph, Bluefield, WV

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April 22, 2013

Life is a great teacher about money and happiness

(Continued)

I’ve studied “Big Money” for all of my adult life, and most of the problems come down to a few areas.  

First is a person, like Abraham Shakespeare, who just couldn’t say no. He was the perfect mark for every con artist with a story.   

Usually the person with a story isn’t a stranger. It’s family, longtime friends and newfound “romantic interests.” A lot of emotions get brought into play.

And money seems to flow out the door.

The second is having too much money all at once. Most of the lotto winners who get in trouble are the people who took all the cash up front. If it were up to me, I wouldn’t let lottery winners take a “cash option.” If they took the annual payments, they would learn from the mistakes with their first installment or two, and would still have 18 or 19 more chances to get it right.

Most lottery winners eventually figure things out, once the money is gone. Or when they are at the point where they wish they had “torn up the ticket.”

The government figured it out a long time ago. We don’t give people a lump sum social security check at retirement. We don’t want them to run out of the money. The same used to hold true with pension plans. People received an annuity that lasted the rest of their lives.

Today, most pensions are 401(k) plans. Just like the lotto winners, people are running out of retirement money while they are still alive.

When you think about it, almost all of us have our own “lotto moment.” We make decisions about money that will either give us long-term security and happiness or bring on pain and regret.

Handling a lump sum wisely can be a “ticket to paradise.” Or, like Abraham Shakespeare and Powerball Jack, it can be a ticket to misery that they wish they would have torn up.

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Don McNay is a columnist for the Richmond (Ky.) Register. Contact him at don@mcnay.com.

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