Why do people run through large sums of money quickly?
Best-selling author and lottery guru Don McNay has devoted over 30 years to searching for the answer to this question.
When you hear about Powerball winner Jack Whitaker running through millions that he received from the lottery or Alan Iverson, who has none of the $154 million he made as a professional basketball star, you can't help but wonder what happened.
It's not just famous people who do stupid things with their money. It's everyone.
A report by the National Endowment for Financial Education said that 70 percent who receive a lump sum from any source run through it in a few years.
Many people will deal with a life-changing amount of money at some point in their lives.
No matter the source, there is a universal conclusion: People with big money have a problem holding onto it.
McNay said that people run through money for five reasons:
1. Family and friends. People try to "buy" love and friendship or they feel compelled to show off by buying houses, cars, clothes and items. As Will Rogers used to say, "They are spending money they don't have to impress people they don't know."
2. Bad habits, bad advisors, lack of knowledge. People who spend more than they make will not suddenly be "cured" when they get a lump sum of money.
3. Taking the money in a lump sum.
4. They don't think before they act. People make impulse decisions. They think they can pay something off "over time." Then time runs out on their money.
5. Not having a purpose for their money.
In McNay's 2008 bestseller, Son of a Son of a Gambler, Winners, Losers and What to Do When You Win the Lottery, he tells people to do five things if they find out they hit the jackpot:
1. Never tell anyone you won. If you live in a state where you can collect the money anonymously, do so.
2. Don't make any quick decisions. Take some time and put together a plan.
3. Take the money in payments instead of a lump sum.
4. Talk to experts who have worked with more money than you have. If you win $100 million, find advisors who have received $150 million.
5. Use your money for a purpose.
Having made the connection that people who take a lump sum have the same problems that lottery winners do, Life Lessons from the Lottery takes the advice intended for lottery winners and distills it into practical advice, commentary and insights that the average person can use.
Life Lessons from the Lottery is not your typical personal finance book. The book allows the reader to a deep look into their soul, find out what they are looking for in life and use the money they have to get there.
Follow the counsel of this book and you will be on your way to achieving your own version of happiness.
With your money and your life.
The Kindle version of the book will be released on Amazon on Saturday, November 17. On the same date, readers will be able to download free or reduced price versions of McNay's other books.
The paperback version of the book will be released February 11, 2013.