http://finance.yahoo.com/retirement/article/110553/jackpot-winners-just-as-likely-to-go-bust
This article is about a study done on lottery winners and how they go bankrupt too…just a bit later.
While I do believe that on occasion a lucky winner who spent $1 or $5 on lotto tickets every so often and can win and – bang! Wow! Lucky! Most people spend a lot of money, money that can probably not afford, buying tickets in search of the big payout. Am I against the lotto? No. Not at all. But it should be seen as a FUN thing. With disposable income spent on it. Like Bingo or something. Just like any form of gambling. Not your rent money, not your grocery money, not your kid’s lunch money.
The main reason, in my personal opinion, that lotto winners (or any type of big payout really – insurance settlement anyone?) still end up with nothing is that they simply don’t know how to manage money. They don’t know how to plan for the future. Oh kinda like people who took more and more equity lines out on their homes when they had no business accessing that money.
What were they thinking when they did this? Were they thinking how they were going to pay off their home anytime in the future? Or using the money to improve their home’s value? Were they doing the math on how they were going to pay it back? Quite a few took the cash and bought newer cars, bigger TVs, nice vacations and more crap. I’m all for shopping and keeping the global economy alive and well – if you can afford it. And definitely not if somehow my tax dollars is going to have to bail your irresponsible ass out some day.
I know there were plenty of unscrupulous mortgage brokers getting these loans approved but at the end of the day – you signed the papers and took their money and spent it. You are responsible for your own condition. Period. No one else is. Unless you are 5 years old. If you didn’t understand the ARMs and interest rates then you should not have signed those papers.
The study has policy implications for governments deciding how to help heavily indebted people who are struggling during economic downturns, Hoekstra says. It appears the simplest solution — giving them cash — doesn’t enhance longer-term financial stability, and only postpones, rather than avoids, bankruptcy. The lottery findings are consistent with a 2007 research paper that showed consumers initially used their 2001 federal rebate checks to reduce debt, but eventually debt returned to its pre-rebate level.
“Our research suggests that perhaps there is something more systematic about the types of people who get themselves into financial trouble — and the appropriate policy prescription for helping them out is going to be considerably more complex than giving them additional resources,” says Hoekstra.
This is fact. You cannot give people money and expect them to fix their own problems and improve their lives. And you can’t give people something for nothing. See the never-ending money pit of government entitlement programs for proof.
Giving people money for, or cutting what they owe on, their mortgage loans is not the solution. And penalizing and vilifying the banks while allowing the loan holder to skate is BS. And having more and more government control over banks and lending is a GIANT mistake. See any government body for their efficiency and ability to get anything done.
So play the lotto if you have a spare $2 in your pocket. I do when it gets up to the giant gazillion dollar pots! I love fantasizing about my 100 acres in Wyoming and shopping trips! It’s fun. But if you are going in and spending $20-$50 a week (and I’ve been there behind the people buying them) in hopes of hitting it rich…well…I sure as hell hope you don’t have a mortgage loan you are defaulting on or kids who need new shoes.
