Playing the lottery is not a smart-money, wealth-building activity. Here’s why…
A large percentage of the men and women who win the lottery come to the end of their earnings with very little to show for it. The same is true with sports-related contracts. Many young men and women who command six-figure contracts end their careers with very little. It isn’t always the case, but it is frequently the case. The odds are against the lottery winner developing a wealth mindset.
The lottery effect can be avoided but it’s difficult to listen to reason when you seem to have all the resources you will ever need. The truth is that life expands and contracts to balance within your means. If you have an abundance of money or resources, your habits and expectations will expand with that abundance. Often, people become more responsible and more focused when they have very little.
Avoid the lottery effect with these tips:
Get a mentor- Find someone - whether a friend or a paid financial planner - to offer mentorship about how to grow and manage your wealth. You may not get a large sum of money handed to you, but you can manage your incremental wealth and see huge returns over time. Take their advice and take the actions you need to avoid the lottery effect.
Spend some- The whole purpose of having a resource is to use it. No one is denying that goods and services make life easier and more fun. Using a budget or designating a portion of your income for discretionary items is important.
Save some- There will come a time when savings will matter. It might seem far away when you are young and healthy, but even young and healthy people have unexpected things happen. It might be hard to save when you feel like there isn’t enough or that you won’t have anything happen that you can’t handle, but the first time you need savings, and it is there - or it isn’t - you will instantly know the value of setting money aside.
Give some away- Generosity is the key to creating more. Giving some of your resources away for the benefit of others is good for your karma, or your community - whichever you subscribe to.
Getting a windfall and blowing through it is common if you don’t have support and direction. Set yourself up for success and avoid the lottery affect by being diligent with your money. Spend some, save some, give some away, and find someone who has experience to help show you how.
This content was created by Piggy Makes Bank and presented by Mountain Flower Investments & Planning.