If your ship didn’t come in with last week’s Powerball…we’re in the same boat.
But maybe that’s a good thing, because it will give us time to get our financial house in order. One study found that big lottery winners were more likely to go bankrupt within five years of winning.
But it’s not just lottery players that lose big.
In 2009, Sports Illustrated reported that within five years of retirement, 60 percent of former NBA players are broke. And within two years of retirement, 78 percent of NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.
Y’all this is craziness!
After watching a few documentaries on overnight millionaires, I’ve noticed three common themes.
- Money just amplifies existing problems.
- Vultures descend.
- And most of us are financially illiterate.
More Money, More Problems
Biggie said it best.
“I don’t know what, they want from me It’s like the more money we come across The more problems we see.”
If you are surrounded by selfish and greedy people, it’s only going to get worse with money. Because money amplifies existing problems, especially when it comes to relationships with family and friends.
Beware of Descending Vultures
Once people find out that you’ve come into some money, everybody and their Mama is going to pitch you a business idea, will want to be your agent, and/or financial advisor.
Build your financial team BEFORE you get rich because the people who will help and guide you when you have no money are the same people you want helping you when you have a lot of it.
They’ve proven themselves to be trustworthy.
Become Financially Literate
According to Quartz, two-thirds of the world’s population failed a basic financial literacy test.
Financial literacy is important, because it helps us calculate interest, inflation, and understand risk. That’s one of the main reasons overnight millionaires go broke–because they don’t have a diversified portfolio of investments to balance risk.
Take this basic financially literacy test.
Click Here to Download a FREE Copy of the BMWK Generational Wealth Pledge for Black Families!
Use the Right Money Tools to Get Your Money Right
Last year, Lamar and Ronnie Tyler (the masterminds behind BMWK) did a documentary entitled Generation One: The Search for Black Wealth. The film explores the culture of consumerism in Black America and provides a blueprint for building a legacy of generational wealth.
You can buy or rent it here.
But if you are looking for a free and fun way to help your children grasp financial concepts, try Financial Football. The game was developed by Visa and features all the NFL teams. It loads a little slowly, but I found the questions to be both challenging and informative.
You can play it here for free.
We’ll Probably Never Hit the Numbers…
But that should not stop us from adopting the habits of life-long millionaires.
In the book, Millionaire Next Door, researchers explain that most millionaires live below their means, avoid a flashy lifestyle, and choose their occupation wisely. Those are steps we can all take.
Because at the end of the day, it’s not about how much money you make…it’s about how much money you can keep.
BMWK: What other steps can we take to get our financial house in order and learn financial literacy?