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Financial Planner? Here's one...

Topic closed. 8 replies. Last post 9 years ago by Badger.

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Zeta Reticuli Star System
United States
Member #30470
January 17, 2006
10353 Posts
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Posted: October 5, 2007, 9:33 am - IP Logged

This is from the oney column in our local paper:

What's the big deal about playing the lottery?

 

By Joe Pxxxxxx

 

&

(Provided)

Question: I realize the odds are greatly against me winning the Lotto, but I love the excitement of playing. Besides, I only spend $10 a week. I know you will say this is not a good idea, but what is the big deal?

Answer: True financial peace does not come from having tons of money, but from knowing how to manage the money you have.



&&&&&&

Many Lottery winners quit their jobs, blow the winnings, lose their friends and discover themselves much worse off than before they won. In fact, a survey by Associated Content indicates that 90 percent of lottery winners become bankrupt after 10 years. Why? They don’t manage what they have now, so they are totally out of their element trying to manage a lot of money.

And the divorce rate of those who win the lottery is substantially greater than those who don’t. Why? Because having great sums of money will greatly magnify the character traits — good or bad — that a person already has.

The mere thought of immorality somehow explodes into reality with great unexpected wealth.

But your first mistake is believing that you have a chance to win. You don’t.

With the odds of winning the Powerball jackpot at 1 in 146 million you would need to buy a ticket every minute, 24 hours a day for 278 years to have an even chance of winning.

Want a better idea? Invest that same $10 a week throughout your normal working life (20 years old to 65 years old) in a good growth stock mutual fund, and you will have $1 million.

It is time to grow up. Ed McMahon is not coming. Learn to live on less than you make. Get out of debt. And build wealth the slow cooker way: steadily over a period of time. You will be wealthy, and you will know how to manage that wealth.

JOE PXXXXXX is a certified financial counselor

________________________________________

(I x'd out his last name) 

 

Ok, I'm not sure where he got his stats (90% of jackpot winners are bankrupt in 10 years?) or where the firm he says he got them from got them- I think they made it up.

Also, his mention of investing the $10 a week- hello Joe, ever heard of fun? I bet Joes soends more than that on lunch every single day.

But I do think what he said about those who can't manage small amounts are the same people that can't manage large amounts has somethuing to it.  

Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

Lep

There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

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    Kentucky
    United States
    Member #32652
    February 14, 2006
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    Posted: October 5, 2007, 4:51 pm - IP Logged

    "Want a better idea? Invest that same $10 a week throughout your normal working life (20 years old to 65 years old) in a good growth stock mutual fund, and you will have $1 million."

    According to my calculator, $520 times 45 = $23,400 so while the odds of turning that into $1 million is less than hitting the Powerball jackpot, they are certainly much higher than wagering $2340 in ten different Millionaire Raffle games or $100 in 234 games.

    It's easy enough to show "had you bought" into this stock or that mutual fund you could have turned $10 a week into a $1 million over 45 years, but if we knew that info or had time machines, why not turn it into $1 billion?

    "Ok, I'm not sure where he got his stats (90% of jackpot winners are bankrupt in 10 years?) or where the firm he says he got them from got them- I think they made it up."

    I'm betting Joe sold Kirby Sweepers door to door before becoming a financial planner.

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      NY
      United States
      Member #23835
      October 16, 2005
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      Posted: October 5, 2007, 5:59 pm - IP Logged

      "Want a better idea? Invest that same $10 a week throughout your normal working life (20 years old to 65 years old) in a good growth stock mutual fund, and you will have $1 million."

      According to my calculator, $520 times 45 = $23,400 so while the odds of turning that into $1 million is less than hitting the Powerball jackpot, they are certainly much higher than wagering $2340 in ten different Millionaire Raffle games or $100 in 234 games.

      It's easy enough to show "had you bought" into this stock or that mutual fund you could have turned $10 a week into a $1 million over 45 years, but if we knew that info or had time machines, why not turn it into $1 billion?

      "Ok, I'm not sure where he got his stats (90% of jackpot winners are bankrupt in 10 years?) or where the firm he says he got them from got them- I think they made it up."

      I'm betting Joe sold Kirby Sweepers door to door before becoming a financial planner.

      The raffle games you're playing on must be a lot easier than the ones I'm familiar with. Investing $10 a week for 45 years will result in $1 million with  a rate of 12.36%. That's not as easy to get as it used to be, but it certainly isn't unreasonable based on past history. Unless you make really bad choices you could expect to at least earn enough to turn your investment into 200 to 300k.  Spending 23 grand on the raffle games I'm familiar with gives you about a 99% chance of losing at least half of your investment.

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        Kentucky
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        February 14, 2006
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        Posted: October 6, 2007, 4:16 pm - IP Logged

        The raffle games you're playing on must be a lot easier than the ones I'm familiar with. Investing $10 a week for 45 years will result in $1 million with  a rate of 12.36%. That's not as easy to get as it used to be, but it certainly isn't unreasonable based on past history. Unless you make really bad choices you could expect to at least earn enough to turn your investment into 200 to 300k.  Spending 23 grand on the raffle games I'm familiar with gives you about a 99% chance of losing at least half of your investment.

        "Unless you make really bad choices you could expect to at least earn enough to turn your investment into 200 to 300k."

        That would be a more realistic expectation.

        Many people have said the first thing they would do after hitting a huge jackpot is contact a financial advisor but had they talked to Joe before buying their tickets, he would have suggested they would be better off investing that money and not play the lottery. Joe was comparing spending $10 a week on the lottery but if a person examined all their weekly expenditures there would be other places they could find extra 10 bucks a week to save.

        "Spending 23 grand on the raffle games I'm familiar with gives you about a 99% chance of losing at least half of your investment."

        Most of the Raffles are in the $10 to $20 a ticket range, offer a 1 in 625,000 chance of winning $1 million, you have about 6 weeks to buy your tickets, and there are other secondary prizes. I can think of worse ways betting the $10 a week lottery budget. You wouldn't have the 23 grand to wager on one Raffle game unless you saved that 10 bucks a week with no interest and didn't play for 45 years.

        I sort of got off topic by mentioning Raffles because Joe was comparing saving 10 bucks of weeks to spending it on Powerball tickets. If a person has a $10 weekly lottery budget and is going to spend it on Powerball tickets, what is the best playing strategy?

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          NY
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          Posted: October 6, 2007, 7:29 pm - IP Logged

          "he would have suggested they would be better off investing that money and not play the lottery"

           Anyone who goes to a financial advisor after winning doesn't need advice on what would be better than spending $10 a week on the lottery, but if financial advisors had to rely on lottery winners to make a living there would be a lot less advisors. The vast majority of people who consult financial advisors haven't won the lottery, and he'd be right for better than 99.9% of the people that got that advice, because those people will lose money. They may think they've only lost 10 or 15 grand, but what they've really lost is the amount that could have generated if it had been invested in whatever Joe is suggesting.

          We've all got to decide how much to save and how much to spend on things that we don't really need, but every dollar you don't invest means a lot more money you won't have somewhere down the road. $5000 more car at 30 means $40 grand or more that you won't have when you're hoping to retire. Get another car every 5 years and you're looking at  a reduction of perhaps $200 or more in your weekly retirement income. That  slightly bigger monthly payment today becomes  a significant weekly payment later on. The $10 a week some people spend on the lottery may not be very much today, but it can easily cost you $400 a week when you retire.

          Joe's numbers may not be entirely realistic, but his basic point is rock solid. Money spent on the lottery is almost always like money spent on anything else that is gone in a day or two. Anyone who thinks that spending  $500 a year on the lottery before they've invested at least twice that much for their retirement is making a bad financial decision unless they've got some other valid plan for retirement.


            Australia
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            September 22, 2007
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            Posted: November 3, 2007, 1:10 am - IP Logged

            He seems to forget the revenue raised benefits the general public. A few dollars a week on a lottery will not break anyone, but will help many. If all gambling was prohibited, would people stop? NO! It would just go underground.

             

             Everything in moderation

              psykomo's avatar - animal shark.jpg

              United States
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              May 30, 2004
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              Posted: November 3, 2007, 8:08 pm - IP Logged

              He seems to forget the revenue raised benefits the general public. A few dollars a week on a lottery will not break anyone, but will help many. If all gambling was prohibited, would people stop? NO! It would just go underground.

               

               Everything in moderation

              Thanks>>>>>someday:

              I Agree!..........BUTT thing's are more simple in the olde US of Ahhhh!

              If we elect a Democrat to our GREAT system............here....U-Know

              ALL our children will EAT.

              Poverity as we know-it will END! 

              Gobal warming will not exist but, will blow away in the winds.

              Homeless people will find homes's (somewhere)???????????

              High gas price's will move to another country!

              If we elect a Republician.........not even GOD can HELP on this WON

              ALL our children will STARVE.

              Poverity and PORN as we know-it will never END!

              Gobal warming will kill all the polar bears and all the people .........

              of ALASKA.............too (hey democrat's.....did you think bout THAT)

              Homeless people only came back after Bush got in the White Hos!

              BUSH will give back all of the OIL the SOBEE stold!>>sold ect......!

              NOTE:

              YOU people "DOWNUNDER"........HAVE_IT____________MADE$$

              LOL

              PSYKOMO 

                TexasDreams's avatar - Trek ROMSYM2.gif
                Houston, Texas
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                November 19, 2007
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                Posted: November 19, 2007, 9:24 pm - IP Logged

                He seems to forget the revenue raised benefits the general public. A few dollars a week on a lottery will not break anyone, but will help many. If all gambling was prohibited, would people stop? NO! It would just go underground.

                 

                 Everything in moderation

                Well said!!!!!!!!!!!!!

                A few years ago, billionaire Warren Buffett advised  "Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful."

                  Badger's avatar - adu50016 NorthAmericanBadger.jpg
                  Wisconsin
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                  Posted: November 20, 2007, 8:30 am - IP Logged

                  With the odds of winning the Powerball jackpot at 1 in 146 million you would need to buy a ticket every minute, 24 hours a day for 278 years to have an even chance of winning.

                  Want a better idea? Invest that same $10 a week throughout your normal working life (20 years old to 65 years old) in a good growth stock mutual fund, and you will have $1 million.

                  It is time to grow up. Ed McMahon is not coming. Learn to live on less than you make. Get out of debt. And build wealth the slow cooker way: steadily over a period of time. You will be wealthy, and you will know how to manage that wealth.

                  JOE PXXXXXX is a certified financial counselor

                  Always consider the source.  Every dollar spent on something else is a dollar he can't make commission off of...

                  With the odds of winning the Powerball jackpot at 1 in 146 million you would need to buy a ticket every minute, 24 hours a day for 278 years to have an even chance of winning.

                  Yet with those kind of odds, it is still guaranteed that someone will win ; sometimes with only a one-dollar wager.

                  Want a better idea? Invest that same $10 a week throughout your normal working life (20 years old to 65 years old) in a good growth stock mutual fund, and you will have $1 million.

                  And in 45 years from now, based upon history, a million bucks isn't going to do much for you.  It already takes at least that much invested at 5%/yr to have a somewhat comfortable retirement after all the taxes are taken out. It used to be a million bucks would allow you to live high on the hog.  People seem to routinely be paying $5 for a cup of coffee now.  To each his own.  Personally, I'd rather buy a lottery ticket than spend that money on a cup of coffee.  Never have tasted coffee that was worth that much, and I doubt I ever will.

                  ============

                  How can you tell if a politician is lying?

                  Answer: His lips are moving.