Money Lessons From Lottery Winners

Michael Carroll’s story is that of real life rags to riches then rags. He won a total of $15million 8 years ago in the British lottery.

Today he has squandered all his multi million dollar winnings on drugs, prostitute, wild parties and alimony payments. He was declared bankrupt earlier this year.   He became the  focus of  media attention recently because he made a loss selling the last object of his  life of excess-his mansion-at  $600,000 less than the original market value.

The story of the “lotto lout” as he is called is no different from the biographies of famous stars, celebrities and sportsmen we have read (Michael Jackson, Mike Tyson you name them) who have acquired great fortunes and then lost them in the same breath.

These stories have always fascinated me.

On the other hand, we hear the stories of individuals from humble backgrounds who acquire great fortunes, maintain it and then pass it on to their families, give to great charitable causes.

The question is how can we explain these differences in behavior and outcome?

The answer lies in what I am about to share with you today

I call them the money skills of the wealthy.  You can also call them the money secrets of the wealthy.

These essential skills money you will find in all great wealth builders of our time.

  • They value money
  • They know how to control it
  • They know how to save it
  • They know how to invest it
  • They  know how to make it
  • They know  how to shield it
  • They know how to share it

The first three money skills valuing it, controlling it and saving it- form the foundation of financial prosperity.

You Need to Value Money

I believe you cannot treasure what you do not value.  The wealthy understand that money has value and treat money with respect.

This is different from greed or “the love of money is the root of evil” belief, many holier than thou people use as an excuse for their ignorance and poverty.

What I mean by understanding the value of money is this… You earn money by providing value in the market place. Why then waste money since you earned it by creating value?

Why work so hard for money and then spend it on things that add no value to your life?

You  need to understand this.

Money is a seed. What you spend your money on is the soil.

When you plant your seed on fertile soil, you get a good harvest. When you plant it on rocky or bad soil, your seed is lost or destroyed.

The Rockefeller Story

Ken David and Tom Taylor in their book kids and cash told an interesting story of how John D. Rockefeller taught his children the value of money.

The story goes that he gave them their allowances and asked them to follow the following rules….

Give 10 percent to charity

Save 10 percent

Account for the rest

In addition, the boys had to balance their books every month.

He taught them four specific lessons concerning dealing with money.

He taught them

  • Necessity of work. when you earn it you value it
  • The importance of charity. He urged them to give the 1st 10 percent of their income to charity
  • The need for saving- He asked them to pay yourself the next 10 percent
  • The power of accountability- account for every penny

It is interesting to note that one of the Rockefeller rank as one of  100 richest Americans.

I shall talk about the next skill in my next post.