Winning the lottery vs. Good old fashioned hard work

I remember my parents playing the Powerball when I was younger. They wouldn’t buy tickets on a regular basis, only when the jackpot was like $75 billion. The ones that make the news. The ones that would drive millions of people to their local 7-eleven to try to get their hands on their Golden ticket, their opportunity to leave Middle classdom and take their rightful seat with the elite class.

There’s just something about a big jackpot that make you scream “I can’t let someone else get that money! That’s my money!” inside your head. As if the jackpots that are less than $10 million are pauper money.

This trend ain’t no passin’ craaaze either. People I work with talk about how they need to buy lottery tickets whenever the big ones come up. The radio and TV news probably talk about it as well, but I tend to rock out to Pandora or NPR in the car, and as you already know, I don’t have cable.

It makes me contemplate why people want to win the lottery at all. You’d probably think I was nuts if I told you that I didn’t want to win the lottery. Well, not only am I against buying lottery tickets, but I would prefer to build my wealth through hard-work, and financial cognition.

Most people would rather come into a large sum of money, because they “don’t have the ability” to build their own fortune. It’s an easy way to take responsibility of their financial house. They could pay off all of their debts (if they have any) and then they’d be able to buy everything they ever wanted.

They could buy everything they ever wanted.

What are the important things that need to be done if you ever win the lottery? Pay off your mortgage? Pay off your parents’ mortgages (if they have one)? Invest enough to live the rest of your life with a moderate lifestyle? Maybe donate the rest to charity? It all depends on what you value.

In some cases, winning tons of money can destroy people and drive them into depression.

When you go from being a financially-unenlightened consumer to a mega-millionaire, you skip the whole stage of learning how money works. It would be like giving a little kid $1,000. They’d probably ask to go to the toy store, and they’d blow all of their money on new toys. The result is that they’d have a bunch of new toys that aren’t special or unique to them, because the child has passed the point of fulfillment. They would also have no residual money.

Adults who come into money are a lot like children. Things start off great. They can go on shopping sprees, transplant their family into the most wealthy communities, pay cash for high-end vehicles, and basically anything else that they deem necessary for a successful person to have. They do the things that they think rich people would do, because they never learned the secret to becoming richthemselves. They fill their lives with the things they couldn’t afford when they were living at a modest income, or in some cases, paycheck-to-paycheck.

You know the expression “Money doesn’t buy happiness”. The same thing can be said about possessions as well. Humans have a psychological point of “maximum fulfillment” programmed into their brains. It’s the point where you have just enough. Anything past this point in either direction will make you feel a little less complete. So, having too much stuff can make you feel just as bad as not having enough.

Here’s a personal example from my more spendy days: 3 years ago I got a taste of how awesome board games could be, so we ran out and bought one. Extremely satisfied with our purchase, we played all night. The the next day we went to the store and bought another one and we played it just as much. Every so often we’d buy another game or two, and they would continuously get a fair amount of play.

But one day I got a pretty hefty bonus from work, and decided to buy 15 new games at once. We’ve maaaaybe played 2 or 3 of them. Ever. They now collect dust. They’re a constant reminder of wasteful spending and they bring me no joy whatsoever. My point is that I probably would have been happy buying all 15 of those games if it had happened over time, but instead they remain shelved, and I, a victim of over-fulfillment.

You don’t find depression or overspending as frequently with the millionaire next door type of person. If you’re unfamiliar with that term, a millionaire next door is a regular person who builds wealth off of a moderate income over time. These aren’t lottery winners, or corporate fat cats. They could be a postal worker, a computer technician, a nurse, a military member, etc. These are people who choose to use money as a tool rather than a way to keep up with the Joneses. They diligently tuck away money every month, and tend not to indulge themselves with the newest gadgets, clothes, or vehicles. Every purchase is calculated and Return on Investment is usually the determining factor.

When you figure out how money works, and you work hard for the money you earn, you develop a sense of responsibility and pride for what you have. Your few possessions will bring you joy, and you will subsequently take very good care of them to extend their lives. You will realize that you aren’t the car you drive, the clothes you wear or the things you have.

You are how you feel and more importantly you are how you spend. A good way to figure out what you care about is by looking at your financial transactions over an extended period of time. Do you spend a lot in the grocery category? You might be a foodie. If you put a significant amount of money into debt repayment or investing, then it’s pretty evident that you care about your future.

Most people would prefer the easy way out instead. Caring about money is too hard, waaaahh! And reducing wasteful spending isn’t possible, because most people don’t know what the term waste actually means. If you’re one of these people who would rather win the lottery than work hard, save and reduce waste to become financially independent, then I wish you luck, because no matter what you think, you’re going to need it.

Life isn’t always sugar and rainbows for all-of-a-sudden-millionaires. Almost half of lottery winners spend their entire winnings within the first five years and 40% of families claim to be unhappier after their big day. [Source] Winning the lottery can also be a great thing, though. Especially for those that have the financial know-how to make the money last (at least) a lifetime.

Next time the jackpot’s in the hundreds-of-millions, stop to think about the difference between being self-made and allowing a new found fortune to make you. You might realize that you actually wanna do this thing on your own, the old fashioned way. Save that dollar, it’s a great start to a new life!

**I am by no means saying that I wouldn’t take a winning lottery ticket, as I would in a heartbeat. I just wouldn’t play the lottery in general, so the odds aren’t ever in my favor. If you are a financially-reponsibile adult, and would just love to enter the passive-income phase of your life, then power to you.

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