Winning the Lottery & Bankruptcy: A Lesson in Money Mindset
Did you know that windfall lottery winners are more likely to go bankrupt in 3-5 years than the average American? (Study: https://direct.mit.edu/rest/article/93/3/961/57969/The-Ticket-to-Easy-Street-The-Financial#.VpLMM1J327Q)
I remember when I was young I watched a news story about people who won a million dollars in the lottery and ended up going broke. They found out the hard way that $1 million doesn’t last very long or go very far, even in the 80s. But more recent accounts include lottery winners who won as much as $300 million, yet still lost it all!🤯 Winners reported that instead of the money solving their problems it actually created more, including struggles with depression, divorce, and suicide.
It seems kind of crazy, but not surprising. As the saying goes: “Money doesn’t change people. It just amplifies who you already are.” So even if you come upon money, whether it’s through pay increases or by windfall, if you don’t change your scarcity mindset around money then you will continue to struggle with money.
Our thoughts, especially around something like money, are almost always rooted from past experiences and upbringing. We are all familiar with stories of professional athletes who grew up poor with the mindset of when money came around then they have to spend it all because they didn’t know when it will come around again. Suddenly they have more money than they could have ever conceived growing up, but still have the scarcity mindset. Sports teams now have financial professionals on board to teach financial literacy to their players and they remark how difficult it is for their clients to wrap their heads around the concept of not touching a large chunk of their earnings and put it toward savings.
Scarcity can also show up for those of you that tend toward being people pleasers.
➡️The fear of rejection.
➡️That people won’t hire you.
➡️That your rates will scare them off.
➡️That they will think you’re greedy, etc.
All of these prevent us from charging what we want. If you find yourself in this position, it’s important to ask yourself if it’s really the fear of a client rejecting you? Or is it that you’re afraid you won’t be able to deliver to that standard? Or maybe it’s that you don’t believe that you actually deserve it?
Understanding the foundational basics of how to manage your finances is the first step toward improving your mindset around money. When you have the power to tell your money where to go instead of it controlling you, you will be able to have more clarity of what’s possible, what to say no or yes to, and to make decisions that serve you and your values best.