ARBOR WEALTH: Win the lottery and then keep planting begonias
“’Cause I’m savin’ on a washer and a wedding ring… I want this love to be a lasting thing.” from “Money in the Bank” as performed by John Anderson
Last week’s column about the movie “It Could Happen To You” triggered my interest in lottery winners, so I did some research on well-known cases. That so many eventually encountered desperate financial straits was somewhat predictable. But that suicide, murder, divorce and families torn asunder were sometimes part of the equation was somewhat staggering. As Hal Holbrook said in “Wall Street," “The main thing about money … is that it makes you do things you don’t want to do.”
How did the winners blow their money? You name it. They spent it on lavish vacations, designer clothes, multiple residences, cars, gambling, and drugs. One winner collected over $300 million after taxes. And still spent through the fortune. Another won the lottery twice. And twice gambled it away. One winner fell in love with the feelings that accompanied bestowing large gifts on charities, and simply gave away all the money.
Obviously, the majority of lottery winners are much more circumspect and careful with their proceeds. But we rarely hear about folks who make wise decisions and successfully shepherd their resources. It isn’t very exciting news.
What can investors learn from these lottery landslides and financial tsunamis? One important lesson is that one must control one’s money, and not allow money to be in control. Freud wrote that work and love provide the most lasting satisfaction in a person’s life. Sometimes continuing to work and achieve career goals, even if you have the money to retire, can be a healthy thing. You remain productive, you utilize your God-given skills and talents, and perhaps most importantly, you have something to do other than obsessing about your next purchase. Associating with co-workers with different financial priorities can be enlightening. The struggle of a single mother saving to pay for her child’s braces may remind us that our own discretionary spending decisions aren’t life and death issues.
Some 30 years ago I heard about the owner of a plant nursery who won the lottery. Everyone expected him to retire and move to the south of France. Instead, he hired a financial advisor and CPA to coordinate his investments and tax planning, and stayed right there in his roadside nursery, moving palm trees and planting begonias. He liked plants. Liked getting dirt on his hands. He enjoyed landscaping challenges. He liked working with his customers and enjoyed running a successful small business. In short, he kept his life’s work, and his purpose. And the money was there if he needed it.
Last I heard, he was happily digging in the dirt, planting flowers for spring.
Margaret R. McDowell, ChFC®, AIF®, a syndicated economic columnist, is the founder of Arbor Wealth Management, LLC, (850-608-6121~www.arborwealth.net), a Fee-Only Registered Investment Advisory Firm located near Sandestin. This column should not be considered personalized investment advice and provides no assurance that any specific strategy or investment will be suitable or profitable for an investor.