William “Bud” Post III has been called the most unlucky lottery winner in history, not because he very quickly went from rags to riches and then back to rags – because that’s all too common among lottery winners – but because shortly after winning the lottery this guy’s brother tried to have him murdered for the inheritance; he survived; but he was then successfully sued by an ex-girlfriend for a share of the winnings.
When he died, some 18 years later, Post was $1 million in debt!
Post was more “unlucky” than the average lottery winner but as a breed lottery winners rarely fare well. In the USA at least, up to 80% of the lottery winners file for bankruptcy within five years, as we’ll see shortly.
Now, most of us will say," That would never happen to me. You would have to be really dumb to lose all that money."
And yet the very reason that these individuals let their money run through their fingers is the very reason that most of us are still working paycheck to paycheck. The same traits run through our veins that would almost literally guarantee that you and I would lose the lottery money very quickly if we won the jackpot tomorrow – just like these guys and gals!
It’s a sobering thought and you had better sit up and listen…
Before we get into Post’s story, below is a short list of some lottery winners who went from rags to riches and back to rags fairly quickly. Later we’ll look at why – and the traits we have a lot in common with these people, you and I:
- Ken Proxmire was a machinist when he won $1 million in the Michigan lottery. He moved to California and went into the car business with his brothers and he filed for bankruptcy within five years.
- Suzanne Mullins won $4.2 million in the Virginia lottery in 1993. By 2005 she was deeply in debt to a company that loaned her money using the winnings as collateral.
- Evelyn Adams won the New Jersey lottery not just once, but twice (1985, 1986), for an amount of $5.4 million. By 2006 she was living in a trailer and all the money was gone. (“Winning the lottery isn't always what it's cracked up to be," she said.)
- Janite Lee from Missouri won $18 million in 1993. She generously gave her money to a variety of causes including politics, education and the community. According to published reports, eight years after winning, Lee had filed for bankruptcy with only $700 left in two bank accounts and no cash on hand.
- Willie Hurt of Lansing, Mich., won $3.1 million in 1989 and two years later he was broke and charged with murder. His lawyer said he spent his fortune on a divorce and cocaine.
- Charles Riddle of Belleville, Mich., won $1 million in 1975. Later he got divorced, faced several lawsuits and was indicted for selling cocaine.
The quick, “pedestrian” argument would go that “fine, these people had never invested money, they had no business sense,” etc. But they didn’t have to be good at these things. You can always use the services of a financial planner or an investment broker, and so on. It isn’t that they couldn’t afford them. Plus, these folks weren’t illiterate!
There are two big problems that mess up the lottery winners.
(1) Their “Financial Thermostat”
(2) The Dream Bucket Secret as Tony Robbins calls it
Your “financial thermostat”
According to this concept, people have a "financial thermostat" and just like the thermostat that controls the heating or cooling in your house, your thermostat is currently set for the amount of money you have.
If you somehow received more money than your financial thermostat is set for, like the lottery winners above, you'll waste it away until you are back to your set level (or set point).
If you want more money from your business or career, or you want to keep the money you are receiving, you have to raise your financial thermostat. That’s the simple way of understanding it.
The more advanced way of looking at it is that there are universal principles of wealth that explain why success seems to come easily for some people while others struggle at everything they do. This explains why Oprah Winfrey for example is worth more than a few billion dollars while many Harvard-educated, white males who grew up with every advantage only make a comfortable living.
Most millionaires follow these time-tested principles and if you don't receive training in these principles of wealth, you can never have it in your life. At least not for long. If you do somehow become wealthy without learning these principles, you won't keep it.
How do you raise your thermostat? By learning and practicing the principles of wealth. All self-made millionaires live by these principles. If you're not currently having success in your business or career, it's likely because you aren't applying the same principles that Oprah and all other billionaires and millionaires apply to achieve their success.
And all that is standing in the way between you and success is the application of these general principles.
So where do you learn these success principles?
The best place is directly from people who understand the principles and have had success using them. There's no quicker way to get where you want to go than to find a mentor to guide you along your way.
The person you want is someone who is currently where you want to be, and is willing to teach you the wealth principles. Of course, not all successful people fully understand these principles even though they naturally apply them.
Another good way to learn the principles of wealth is through the greatest success book of all time, Napoleon Hill’s Think and Grow Rich. The principles you need to understand are in this book. You'll need to do some work to uncover them, understand them, and put them into practice, but they are in the book.
Napoleon Hill’s Think and Grow Rich is all about using the same resources that millionaires use, so that you can get the same results as them.
If you are not experiencing the kind of financial success you desire, perhaps all you need is a little success training from a mentor or by learning and practicing the principles in Think and Grow Rich. Sometimes all it takes is a few subtle shifts in your thought processes to create a giant difference in your results!
Tony Robbins’ “dream bucket” secret
In his book, Money: Master The Game, Tony Robbins advises us to set up a few “buckets”, including the Freedom Bucket and The Dream Bucket for purposes of saving more from our earnings.
The secret to getting good at saving, he wrote, is to do the following. Later we’ll see why lottery winners lose all the money quickly, because they don’t know this secret (most average people too don’t know it):
“[The strategy for saving more… is you can decide that in your next salary increase, maybe 3% could go to your Freedom Fund, and maybe 1.5% or 2% could go to your Dream Fund – especially if there are some dreams that are important to you now, like saving for the down payment on your first home or a vacation getaway. There are so many ways to do it!
“But let me tell you the secret: the most important thing is to make a list of your dreams.
“Put them in order of importance, big and small, short term and long term. Write down why you must achieve them or experience them. I’ve found that if you try to figure out a percentage to save without really knowing what you’re saving for, it’s not going to happen.
“The secret is to know what you truly want and why you want it, and make it a burning passion. Suddenly your creativity will be unleashed, and you’ll find new ways to earn more, to save more, to add more value, to become more tax efficient, to become a better investor, or to make a lifestyle change that improves your life and gives you some of your dreams today, and not in the future.
“That’s the key to it all. But decide today! Take a moment now and make a list of your dreams. Write them down so they become real to you. How much would you be willing to save for them? Get excited, and get started!”
(Source: Money: Master The Game ~ 7 Simple Steps To Financial Freedom by Tony Robbins)
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The Big “Trance State” That Explains Why Lottery Winners Lose It All (It Starts When You Buy The Ticket)
William “Bud” Post III pawned a ring for $40 and bought 40 tickets in Erie, Pennsylvania. At the time, he was living on Social Security disability income. That day when he bought the tickets he had $2.46 in the bank.
According to behavioral economists, people buy lottery tickets because they have this so-called “possibility effect” going the rounds like a virus. It’s highly likely people get infected by other people’s dreams and fantasies. And for a few “stolen” moments they may even live other people’s lifestyles “vicariously”.
According to Daniel Kahnemann, a psychologist who won the Nobel Prize for Economics:
“The psychology of high-prize lotteries is similar to the psychology of terrorism.
“The thrilling possibility of winning the big prize is shared by the community and reinforced by conversations at work and at home. Buying a ticket is immediately rewarded by pleasant fantasies, just as avoiding a bus was immediately rewarded by relief from fear. In both cases, the actual probability is inconsequential; only possibility matters.”
Note: In that reference above to “avoiding the bus” Kahnemann is here recalling a feeling of immense relief he felt when he was finally able to pull away (in his car) from a bus at a stop light in Jerusalem during a bomb scare when suicide bombings in buses were relatively common. The bombings caused mass hysteria although the probability of dying in one was very very low. But the thing to note is that this hysteria affected almost everyone. Kahnemann wasn't riding in a bus, but he was scared of buses!
(Source: Thinking Fast And Slow by Daniel Kahnemann)
In the USA, according to Tony Robbins, the average American household spends $1,000 a year on lotteries! And all these people are dreaming and fantasizing. And where do you think they’re putting all this money they fantasize to win? In their dream bucket! It’s the only bucket you can put this money – or you’d go crazy…
You couldn’t put it in your Security/Peace Of Mind Bucket. You couldn’t put it in your Freedom Fund Bucket. You couldn’t put it in your Risk/Growth Bucket.
And you probably can’t blame anybody who bought a lottery ticket on a trance induced by the possibility effect for not “making a list of their dreams and putting them in order of importance, big and small, short term and long term; or writing them down so they become real to them…” like Tony Robbins suggests.
Because, let’s face it, most people have an idea about the really tall odds of winning the Jackpot: 1 in 175 million!
In the two weeks after Post collected the first of his 26 annual payments of $497,953.47, he spent more than $300,000 on gifts and investments such as a liquor license, a lease for a restaurant in Florida, a used-car lot, and a twin-engine airplane (despite not having a pilot's license!)
In just three months’ time, his debts totaled $500,000. The next year, he bought a mansion in Oil City, Pennsylvania, for $395,000.
It’s fair to say that he didn’t know what he truly wanted, and why he wanted it. Or why it was imperative to achieve these dreams; or to experience them.
After his life turned sour, William “Bud” Post III bitterly called this jackpot he’d won the “lottery of death.” He died of respiratory failure on Jan 15th 2006 at a hospital in Seneca, Pa.
According to his lawyer, “He did everything you would expect of a guy who became a millionaire overnight.”
You wouldn’t be so dumb as to lose all that money ($16.2 million), like “a guy who became a millionaire overnight,” would you?
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