September 15, 2021 • 42 mins
Winning the lottery shouldn’t be a part of your financial plan- but why are we so enthralled by the idea of winning the lottery?! On average, Americans spend over $1,000 every year for the chance to strike it rich. That’s a lot of wasted money that could be going towards literal investments. But even though we’re not going to win millions, statistically speaking, this exercise can provide some insights about the ways we want to spend our money and our time. This is helpful because there is a much higher likelihood that we would experience some sort of windfall in our lives whether that be a bonus at work, proceeds from a home sale, or even an inheritance. And if we haven’t taken the time to think through what we would do in these scenarios, there’s a good chance we could make the wrong decision in the heat of the moment. We’re going to get personal and share what we would do if we won the lottery, and we’re also going to explain how you can come up with your own money mission statement.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How the Money. I'm Joel and I am Matt.
Today we are asking the question what if you won
the lottery? Yeah, Joel, this is gonna be a fun episode.
(00:27):
We are going to talk about what to do not
only if you win the lottery, but also too if
you came into possession of a lump sum, right, if
you just had some sort of large windfall. Because let's
be honest, a few of us are going to actually
be lottery winners. That is not the path to wealth
that we would recommend. Uh, And so we've got a
lot of great thoughts to share regarding what to actually
(00:48):
do though, were you to win the lottery or if
you came into possession of a large amount of money. Yeah,
at some point in your life, there's a chance that
somehow you're going to have more money than you know
what to do with. And that, Matt, that could be
from a whole bunch of different things. That could be
like a bonus at work, that could be selling a
house and having a pile of money and you're like,
what do I do now? You know, a lot of
(01:09):
people are granted putting it directly into the down payment
on their next house, but there are these moments that
arise and even if that moment never happens for you,
I think there are some important things we can gain
by asking ourselves this question, like what would we do
if we won the lottery? And I feel like we
should actually be giving away some money on this episode
where not you don't have a lot of bills to
(01:29):
toss out there to the folks who are listening. Sadly, no,
but we'll still discuss this in depth. Will do this
this like mind exercise essentially today about what would it
look like, and Matt, you and I will actually share
our thoughts on kind of how our lives would change
if we won the lottery. Not that we're going to
that's right, man. But before we get to that, I
had a quick question for you. Do you pick up
money on the side of the road, Like, like, if
(01:50):
you see, say a dollar on the sidewalk, yeah, I
think you know, or unless it's there's gum attached to
it or and then I'm probably it's gonna let it be.
If it's a poop dollar, you would have it. But
what about like would you pick up a dime? Uh? Yeah,
I'd probably pick up a dime, Okay, penny. What about
a penny? No, not a penny. I leave the pennies
be I would pay. I want to see we've talked
(02:10):
about this on the show before. I want to see
pennies be banned anyway. So it's still money though it is,
you know, so regardless of what you feel about it,
it still exists and it's worth something, even though it's
not worth much. I would pick up a penny, I think,
depending on what kind of condition it's in, right, Because
if it's laying there and it's like shiny, like super
shiny and fresh looking, looking like it was just mented,
you know, last week, that kind of thing, I'd be
(02:31):
willing to pick it up. But if it's looking nasty,
I'm not willing to risk my health for something that
looks disgusting. But okay, So on a similar note, what
would you do if you received a check? I thought
you're gonna say for a klondyke bar. No, okay, this
isn't like nineties television. What would you do with a
check that you received from, say, a credit card company
(02:52):
for one cent? So I would deposit it because I think,
but there's a reason I think for the difference. One
the penny. It's gonna go into my into my like pocket,
and I mean, I have to figure out it's some
later date what to do with it. I'll stick in
like we'll change drawer in the car or something like
that in the jar, and eventually you can, you know,
take that into a credit union or somewhere local where
(03:12):
you can actually deposit that into a real accind of,
I guess you're right, but it's just a little more
cumbersome than is to quickly deposit a check, even if
it's a check for just a penny. I would probably
deposit I would. I wouldn't be so bold as to
crumple it up and throw it in the trash without
depositing it, because principally that feels terrible, right, like to
actually throw money away. But even though we still like
(03:33):
we might buy pass money that's on the sidewalk. I
ask you this because this actually happened to us last week.
We received a one cent check from a credit card
that we had closed, and we had a credit of
one cent, and they went through the trouble of mailing
us a check in the mail. I mean, what does
it cost a mail a check or you know, a
letter these days in liket eight cents, the price went up,
(03:54):
and so they must the cost of printing the check
and mustn't even count that. Let's let's quantify the known expenses.
They spent fifty eight times more money on just getting
that stupid check twist than the actual amount of money.
It's ridiculous. So I think Kate thought I was just
going to toss it, but like you, I was like,
of course, not flip that thing over. I signed it,
pulled out my phone, took a picture of it, uh,
(04:15):
loaded it in the you know, the mobile app, and
deposited it. But I agree, there's almost a removed barrier
when it comes to depositing money via a mobile deposit
as opposed to sitting in the jar for who knows
how long. But we want to encourage folks to be frugal.
Don't bypass money, even money that you see on the sidewalk,
because I'm like, Joel, you can take that money home,
maybe wash it if it looks extra nasty. I'm saying
(04:37):
this for myself too. Are you're gonna give your penny
a bath? Come on? Uh? Yeah? Have you have you
never washed money? I've even watched bills before We're like,
just put it under the running water in the scene
with a little bit of dish soap and just set
it over the side to drive. I think if it's
money laundering and that's the legal kind of money laundering, yeah, no,
I don't think I've done that, but I totally have.
(04:59):
I know people that because I in their bills sometimes
and I've found that to be kind of fascinating and
something I'm probably also not going to partaken. Well, I
wanted to share that with you because I thought it
was a funny story because Kate was sure that I
wasn't actually going to deposit that that one since, but
I felt like I had to. I feel like she
should know you better at this point, you know, she
should have known that you were definitely gonna deposit that.
(05:19):
I could have Yeah, I could have fallen on the
other side where I was just like, this is ridiculous.
I'm not gonna waste my time. I'm being cheap with
my time where I had to go through all that,
but it isn't very hard to make a mobile deposit anymore.
That's right. Your your time is not worth that much yet,
you know, all right, Well, let's move on Matt, let's
mention the beer that we're gonna have on this episode.
This one's called Crucial Crucial Taunt Taunt Enhanced fascinating beer
(05:39):
name by the Veil Brewery out of Virginia, and they
make some great stuff. Man, looking forward to having this
beer today on the show with you. But we'll get
to that in just a little bit. Let's get onto
the subject at hand, Matt. We are asking the question
what if you won the lottery? And there was actually
a recent lottery winner from Myrtle Beach, South Carolina. This
guy I actually he won the lottery two weeks in
(06:02):
a row. I've never heard of this before. He won
forty dollars the first time, and then he decided, you
know what, I like my chances. I think this is
going to happen again. Uh. And he was right, because
he won four million dollars with the second ticket, isn't it. Yeah?
But here's the thing, right, you have a greater chance
of being struck dead by falling airplane parts than winning
(06:24):
the Powerball lottery. Actually, you're thirty times more likely to
get hits by falling debris from a plane than you
are to actually win the Powerball jackpot. Yeah. So I mean,
if that doesn't put things in respective, I don't know
what does. But I think what that really says is
that playing the lottery, it's really just a complete waste
of your time and money. Even if this one anecdote
(06:44):
of this guy in Myrtle Beach, South Carolina makes it
seem like it isn't. It's like, oh, that guy won
it twice. I mean I could probably win it once. Right, Well,
the answer is no, and I guess you could, but
it's incredibly highly unlikely. Right, And so the question is, well,
how much money are we wasting playing the lottery each year?
And over a thousand dollars per person a year on
(07:05):
average is what people are spending playing the lottery. Some
people obviously more than that. Somebody's is spending two thousand
dollars a year compared to my zero, I guess. But
today on the show, we want to get a little
imaginative and talk about what life could or should be
like if you actually did win the lottery or came
into a lump sum. But we want to say you're
not actually gonna win the lottery, so don't even try.
That in and of itself is a bad idea. It's
(07:27):
a waste of your time and money. Yeah, we've all
heard of the phrase easy come, easy go, And when
it comes to winning the lottery, man, there is a
whole lot of truth to this one, because most lottery
winners actually go broke, declared bankruptcy in fact. And most
of these folks go from you know, having very little
to becoming filthy rich and then going back to having
nothing within a span of three or five years. It's
(07:48):
a short lived cycle. It's not like it even lasts
like it's like it wasn't a great twenty year run
or anything like that. It's like just a few years, yes, exactly,
and receiving just an insane amount of money like this
actually ends up causing financial troubles, which is kind of crazy.
Studies show that lottery winners don't end up any happier
as well. Winning the lottery is actually a quite miserable
(08:08):
experience for many. But still, we want to pose this
question today. We think that there's a lot that we
can learn by pulling it over, by you know, talking
it over with a friend or a partner, if you're
sitting at home listening, because even though statistically speaking, you're
not going to win millions of dollars. We feel that
this exercise can provide some insights just about the ways
(08:28):
that we want our time and our our money to change.
And so yeah, we want you to ask the question,
what would I do with a large sum of money
that fell into my lap? Well, yeah, many of us
are likely, I would say, to see some sort of
a windfall at some point in our lives, some of
us actually recently. You saw it this past year when
it came to stimulus checks. That was kind of a
(08:49):
windfall for a lot of people. That was unexpected. And
I know a lot of how the money listeners were
responding and saying, listen, I'm still employed and I got this.
You know, some tossed into my lap, especially if you
have a couple of kids. I'm not sure what to
do with it. It could be a huge bonus at
work that you weren't expecting, or maybe you sold a house,
like I said earlier, for fifty more than you thought
(09:10):
you were going to, which is not unheard of in
this market. Or you know, maybe it is an inheritance
that you weren't expecting, some uncle that you're like hadn't
spoken to in years, left you in as will, and
you've got some cash and you don't know what to
do with it. And if we haven't taken the time
to think through what we would do in these scenarios,
there's a good chance that we can make the wrong
(09:31):
decision in the heat of the moment. It's really it's
the reason that office buildings and schools have fire drills, right.
It's important to plan ahead because when you smell smoke,
the alarms blasting, there's like hundreds of coworkers or in
the case of a school, little kids running around, it's
easy to panic and make the wrong decision. So having
that plan and then practicing it helps everyone know what
(09:51):
to do when a real fire happens. It helps that
muscle memory to kind of take over, as opposed to
trying to figure it out in the moment. Yeah, that's true. Yeah,
without a plan, we just get swept up into the
crowd and just do what everyone else is doing, freak
out running kind of stuff. And here, you know, that
might actually work out if you're just trying to get
out of the building, because most folks are probably running
for the exits, you know, but this could be treacherous
(10:12):
when it comes to what we should be doing with
our money, because yeah, have you seen the kind of
financial decisions that everyone else is making out there? If
you don't have a good reason to not go with
the flow, well, why wouldn't you do what everyone else
is doing? Why wouldn't you live your life in a
way that just mirrors your parents or mirrors your co workers?
Why not buy that new gadget that everyone else has
(10:34):
or that's being marketed to you that popped up in
your Instagram feed, which I'm telling you, man, those ads
are getting so targeted and so specific. Uh, it's ridiculous.
By the way, I saw that TikTok just launched the
by feature in that feed too, So it's it's coming
at you from everywhere. People are gonna be buying left
and right, And so if you haven't given it much
or honestly any thought at all, we're likely going to
(10:57):
just drift through life. We're gonna be like a ship
without a rudder if we don't proactively and intentionally think
about what we're going to do, not only with our life,
but with our money. Yeah, and I guess some of
the things that we see other people doing, they're not
always inherently bad, right, there are people around us who
are doing good things as well. For example, like taking
on an ambitious project at work. You're stepping up and
(11:17):
you're looking for ways to prove yourself, to demonstrate that
you have the leadership and the brains to get it
done what it takes exactly, and that sounds like that's
always a good thing, right, in order to move up
the corporate ladder and get ahead. Um, that probably does
mean that you're closer to that next promotion and maybe
even closer to that C suite career path that you
had hoped would potentially happen, um and a salary that's
(11:40):
commensurate with it. But it also means working over seventy
hours every single week if that's the pursuit you take on,
and when you realize that, it's crucial to do some
soul searching before you end up embarking on that path.
Case in point, Matt, look at the junior bankers on
Wall Street who make a hundred thousand dollars plus. That's
the starting salary for someone fresh out of college, but
(12:00):
they don't have a life like they don't have anywhere
to spend that money because they're working so much, and
I guess the question is like, are the sacrifices worth it? Right?
Is it worth the sacrifice of your friends, your health
and to be able to even see your family? Is
that what you want your life to look like? It's
really really important that we're intentional with our lives. And
so it's not even always bad things that are leading
(12:22):
us astray. It's things that look good, but they're like
wolves and cheap clothing, they're they're they're actually bad because
it's not what we want. We're just kind of following
some stock trajectory. So not only do we feel that
it's an important exercise to think through what you do
with a load of money, but it's also a fun exercise.
It's a fun mind game as well. It's like Brewster's Millions. Man,
do you ever watch that movie back in the day
(12:44):
Richard Pryor So, I think the premise was basically that
he could inherit three million, but first he had to
spend thirty million dollars in thirty days and he couldn't
have anything left to show for it. So it's kind
of like it is a comedy with Richard Prior John
Candy and what we should go back and watch it,
and I was like, yeah, just kind of a fun exercise, right,
(13:06):
But even so, thinking through that, like you know, like
what's interesting about this is that it opens up this
whole realm of questions that are worth pursuing. And you know,
like you mentioned earlier, we're gonna get personal and share
our responses to hopefully we've already made a compelling case
why winning the lottery is actually a terrible goal and
nearly impossible and impossible truth. But rather, dude, I want
us to strive to build wealth instead of just striking
(13:28):
it rich. And this might sound like semantics, but there's
actually an important distinction here. I think the biggest difference
is that someone who is rich is gonna be focused
on spending and consumption, whereas someone who is wealthy, uh,
they're gonna focus on how to preserve, how to invest,
how to grow that money. Riches are just kind of
like the a flash in the pan, whereas wealth is
going to be able to endure not only years, but
(13:50):
decades and even generations as well. Uh. And so investing
and spending are are both important when it comes to
living a balanced life. And so we're gonna walk you
through steps you should take. Uh, if you did happen
to find yourself the recipient of a load of cash,
and so we will actually get some more of that's
right after this. Alright, we're back from the break. We
(14:18):
are asking the question and posing it to you. Dear
out how the money listener, what would you do if
you won the lottery? And like Matt said before the break,
if you only focus on the spending side of the equation,
you might be rich for the moment, but it's it's
likely not going to last very long. Right, First, it's
important to make sure that you're making wise decisions with
your money. And we believe that there are practical steps
(14:39):
that everyone needs to take. There's a hierarchy and an
order that we want to make sure that you've got
inline and you go in order of importance, and we
call them the seven money gears. They lay out essentially
that pecking order of financial priorities, and it's just really
really easy to see, Oh, I'm right here, I'm on
money gear two or I'm on money Gear four, and
(15:00):
here's what I need to do next. So, yeah, where
you are on your financial journey will determine the actual
money moves that you should be making. And the best
way we know to help you pinpoint exactly where you
are is that seven money gears formula that we came up.
When that's right, Yeah, So for example, if you're on
money your number three, this lump sum that you might
receive will act like a supercharger to help you tackle
(15:20):
some high interest rate credit card debt that you might
have way more quickly, maybe even in one fell swoop.
Just depends on how much debt that you've accrued and
how big that random sum of money is that just
ended your life or maybe your money gear number six.
If that's the case, then you'll have more options at
your disposal. You've been handling your money well for years.
If you're at this point where the only debt that
(15:40):
you have is a mortgage, but you now have the
added benefit of your financial life becoming a whole lot simpler,
which is really appealing for some folks. And so we're
not gonna go through all the money gears right now
here on this episode. We've talked about it in previous episodes,
but we would highly recommend you to head over to
How the Money dot Com slash start dash here uh
and you can find links to that from our landing
(16:01):
page on our website. But we've got all the different
money gears listed out and you can easily and quickly
determine where you are on your money journey. Yeah, and
it can be incredibly satisfying to work your way through
the money gears. It's kind of like watching the dominoes fall.
You know what that makes me think of? Have you
ever seen the like this demonstration where you've got like
these dominoes that get way bigger. So there's like a
(16:22):
small one, but it's just just thin enough to knock
over the this bigger one, which is just big enough
to knock over this other one which is huge, and
eventually the dominoes and I mean, yeah, seven down the
line or whatever that I mean, it's able to knock
over this massive board that's a giant domino. And that's
kind of what we're doing here with our money gears. Yeah. So,
maybe you're currently contributing four to your four one K
of work, and you know what, you need to contribute
(16:44):
two more percentage points in order to get that full match.
Well that's money gear number two. So once you're able
to do that, you're like boom, I'm onto the next thing.
I'm paying off high interest credit card debt and any
sort of high interest debt that's hanging in your life.
And it really can be motivating as you start to
see the dominoes fall and can tinue to work your
way through. It just gets more fun the more dominoes
that fall, right, And it's not that it's not fun
(17:05):
to knock over some of those first few dominoes. You
can have a lot of fun in life before you
reach you know, this pinnacle where you're able to spend
and invest a lot of money exactly exactly, But there's
just more freedom when it comes to like how you
want to appropriate that money when you're further along in
the money gears, right, But we want to make sure
that you are doing the smart things with your money first,
(17:26):
and then you begin to start dreaming big. So, yeah,
if you want the lottery tomorrow, that's great, but we
want to make sure that you know which money gear
you're on and which money priorities you would be tackling
first before you start to think about the kind of
fun things that you would spend that money on. Yeah,
for the most part, what we're basically saying here is
that money. Years one through six are kind of like
(17:49):
required reading before you you're able to move on to
number seven. Yeah, it's like, it's like, why would you
start with Harry Potter Books seven? You wouldn't you'd read
the first six first? U exactly, You wouldn't even really
know what was happening. But I would say, you know,
if you haven't spent much time thinking about what your
life would look like if you received a massive windfall,
then like some out there, might feel it difficult to
(18:09):
bring himself to spend any of it. You know, maybe
you're paralyzed by the fear of doing the wrong thing
with that money. But one of the ways to do
this is to create a personal mission statement here on
the show, oftentimes we call this the why behind your money.
But being able to hone in on what is important
to you like that will also dictate what you should
do with this money, or at least it should dictate
(18:30):
what you do with that money. Uh. And so think
through some of the longer term goals and what it
is that you'd like to achieve over the next five
years or over your lifetime. Another question you can ask yourself,
if I'm going to die next year, like what are
my actual priorities in the here and now? And we've
actually got a great free worksheet up on the website
that we will link to, but you'll be prompted to
answer some some questions like these, uh, and it will
(18:53):
give you some clear direction as to what you should
be doing not only with your life, but then what
you should be doing with your money. We will make
sure to link to that in our show notes, but
you can go directly there as well by going to
how the Money dot Com forward slash money mission statement. Yeah,
I love giving our listeners homework assignments on occasion, Matt.
We don't do it very often, but this one we
think is worth your time. You know, if you go
(19:15):
through that link, and we're not trying to sell anything,
We just really want you to take the time, be introspective,
take an hour to go through some of the questions
that we've listed out and to think through some of
this stuff, because it's gonna be really instructive into not
only how you move forward with your money regardless of
whether or not you won the lottery, but also just
kind of like how you think about what it looks
(19:37):
like to live a good life. Um, and it's also
help helpful to keep in mind like your favorite things
to do that that's one of the other things we
talked about actually in that Money Mission statement. Research shows
that the happiest retirees aren't the ones that have saved
the most money. They're actually the ones who have a
comprehensive lifestyle plan. And a friend of the show, Wes Moss,
has actually written extensively on the subject, and he's a
(19:59):
fine anential planner in the Atlanta area, and he's found
that it's the hobbies and the people you have around
you once you're done working that make retirements great for
you or not so great. You know. He found that
the average happy retiree has three point six core pursuits,
while the unhappy person in retirement has less than two.
Saving money, obviously, we're big fans of that. We think
it's really important. We talked about it a lot, but
(20:21):
it's not enough. If you become too focused on the
money side of things, you'll be missing out on the
really good stuff. And so that's why this Money Mission Statement,
we think it's really instructive for individuals to spend a
bit of time answering those questions because it's gonna inform
how you decide to allocate your money and whether you
decide to allocate a little more towards retirement because you're
(20:42):
not prioritizing it enough right now, or whether you say, actually,
right now, I'm overdoing it. I need to live life
a little more in the here and now. But we
hope you give it a shot, and we hope you
find it helpful. Yeah, going through these steps will help
you to think about the most important things in life. Uh.
And what's fascinating too, is that many of the things
that you're gonna likely write down don't even cost much money,
(21:02):
but you know, they might help you to realize that
you want to, say, workless, maybe cut back to part
time hours eventually, or even like take an extended leave
of absence. But at the same time, it also might
not mean doing less. That kind of depends on you.
Depends on the individual. Because maybe you've always wanted to
start your own business or write a book. The slump
sum of money can help you to do something that
(21:24):
you've been putting off, and these questions can help you
to pinpoint the things that you really want to accomplish
with your life. Yeah, or maybe I made the c
suite example earlier, Matt, maybe you realize that that is
actually something that you want to do, and you want
to work seventy hours a week, and that is truly
fulfilling for you. Like we all find fulfillment in different ways,
and we don't want to knock anybody's pursuit of doing
(21:46):
something that they love and enjoy. We just want them
to do it with intentionality. And yeah, even if a
giant lump sumb never falls into your life, you're likely
to find that doing this introspection um can help you
to begin to fund certain things that you haven't prioritized
yet and that you realize, Man, I should have gotten started.
I should be putting money where my mouth is now
(22:07):
that I know, and I've got it in writing that
this is important to me, I'm gonna do so. And
you might realize that you actually have the money right
now to make some of those things a priority, even
though it felt like maybe you know, a multi month
trip to Ecuador, or that pivot to starting your own
business was out of reach. Maybe you'll realize that it's
not that you actually have the money on hand now
(22:29):
and it's important enough to you that you actually begin
to get the ball rolling earlier than you thought you could.
I think you're gonna be able to use some of
these responses to help you create short and concise money
mission statements that guide you through good times and bad,
through market ups and downs, through employment ups and downs,
and through just, yeah, the shifting landscape of your life.
So yeah, that's why we think putting pen to paper,
(22:50):
going through an exercise like this can be just immensely helpful,
not just in the here now, but also if you
were to stumble upon just quite a bit of money.
And yeah, so Matt, after the break, you and I
were going to talk about what we would do if
we stumbled into a whole lot of money, and then
we're going to give some lessons five specific things you
need to do if a lump sum does land in
(23:11):
your lap. We'll get to that right after this. All right,
we are back then. Joel kind of talked about this
before the break, But what would you do if if
you win the lottery? You want to kick it off first,
so I would not go to Vegas? That's that's you know,
(23:34):
you talk about going to uh the casinos before uh specifically,
is that black jack that you you enjoy Yes, my
mother in law lives thirty minutes from casino. The casino
and once every like two or three years, I'll go
there and I'll you know, take a hunter Bucks and
I'll play some black jack, and I do find it
very enjoyable. But I would not ramp up my gambling
if if I won the lottery. What I would do?
(23:56):
I think, Matt it really you know, you know, I
spend a lot of time talking about this because as
we're best friends, we've talked about this kind of stuff
off the air, and you know, it's my goal to
live life in such a way that winning the lottery
would really have like a minimal impact on my life.
I wouldn't want some massive lumps some to change much
about the way I do the day to day. Uh. Really,
(24:17):
I don't have any We we actually write about this
on our about page on our site too. We don't
have any desire to be the next Jeff Bezos or
the Elon must like, we don't want billions of dollars
to our name. So if I somehow landed in that position,
my first instinct would be to invest a chunk for
the future, just to make sure that it's growing and
that I keep my options open. Right. That's money gears
one through six. Make sure that you are doing eliminating
(24:38):
debt and making sure that you're preserving your money and
hopefully making it grow exactly. And even if I'm not
sure what to do with it right now, I love
the idea of saying, all right, it's it's going into
the market just so that I can prepare for the
eventual things I want to do with it. It gives
me time to decide, then, Matt, I think I would
find a way to go out Mackenzie Bezos on like
a huge swath of that money. I've been like really
(25:00):
impressed by her approach to philanthropy and her desire to
give away like a huge chunks of her fortune. Uh.
You can tell that her desire is not to absorb
this and live some you know, lives of the rich
and famous lifestyle, but it really is to say, like,
what good can I do with this money? And I
think that's awesome. Um. I think on top of that,
I would try to find ways to incorporate some of
(25:20):
that money to give a small boost to some of
my current financial priorities, especially when it comes to like
spending more on lifestyle things for my family and I,
you know, maybe a little bit more on some of
the art that we love. I've talked about my love
for local art and full heart on the show before
and taking trips with my family, taking some maybe trips
that were a little bit further off in the distance
(25:42):
for us. Uh, maybe taking some of those trips a
little bit earlier than I thought. But other than that, like,
I don't think much would change even if millions of
dollars were thrust into my lap, which I don't imagine
that happening anytime soon. But uh, you know, we would
keep our house, We would keep our old school two
thousand six minivan. I don't think I would upgrade either
of those things, you know, from the outside, if it
wasn't on the news, like Joel won the lottery, most people.
(26:04):
I don't think most of my friends wouldn't know about
that windfall unless I actually told them, because I don't
think they would be like, well, what's that got doing
over there? He's obviously just spending He's spending so much money.
He didn't used to live life like that. That's nothing
kind of I'd really want to keep things very similar
to the way they are now totally. Yeah. I mean
I think we're we're in a really similar boat. You know,
Like over the years, we've given a lot of thought
to what we want our lives to look like like
(26:26):
right now, and we've just worked towards that goal. And
so I feel like we're we're kind of almost living
like we're millionaires now, like almost like we already have
won the lottery, right like, And so I wouldn't foresee
any massive changes to the to the way we live
our life, but rather maybe a gradual raping up of
the things that we're already doing, sort like you said,
like I could see how we could just maybe increase
the spending on some of those categories just slowly over time.
(26:49):
And you know, like another practice that I think some
folks might find helpful is to think through what you
want your everyday life to look like, Like I know,
for Kate and I like, because we have kids, like
the next sixteen years of my life, like they're probably
gonna look a specific way, right like it's it's going
to include going to elementary, going to middle school, going
to high school. Uh, and so like at the moment,
(27:09):
I can't think of many massive life goals that I
want to have accomplished by the end of my life.
But as a parent to kids in school, I have
a pretty clear view of what my ideal day to
day life should look like. Now, you know, like earlier
we're talking about you're saying your biggest priority is more
family than career oriented, Like you really are more focused
not just family, but just what I want to fill
(27:30):
my days with, because sometimes it doesn't include family things, right.
I guess I mentioned this because earlier we're talking about
mission statements, and I think sometimes it can be difficult
for some individuals to latch onto like the big thing
that they want to have accomplished in twenty years. And
so if that's you and you have a difficult time
thinking of this money mission statement that you want to
wrap your head around, sometimes it can be more helpful
to think about what you want your your day to
(27:52):
day to look like, uh yeah, your money can then
inform it doesn't have to be all these big future things.
It really can be like, how can my money all
allow me to live every single day right now? In
just a way this more conducive, Like it can mean
less hours worked on a consistent daily basis, Like or
just more flexibility in your work or commute options, and
(28:13):
you can say, you know what, right now, I can
take less money in order to make that a reality,
um without actually having to win the lottery totally. Yeah. Yeah,
So so thinking through sort of like that daily rhythm
of what you want your life to be like that
could be really helpful for some. In previous episodes, we've
even kind of referred to it as like designing your life,
and we've included some questions that pertain to that in
(28:34):
the money mission statement, and so yeah, you know, like
at the end of it, like while I wouldn't see
us making any serious changes to our life, I can
definitely see ways that we could use that money to
essentially reinforce and to complement the life that we are
seeking to live. Right now, you're not gonna go get
out and get like that new electric hummer or anything
like that. Well, if there's like a new electric van,
(28:54):
I don't know, like maybe we would do that, but
yeah hummer, that would be talking about that for years. Okay,
don't steal my b W electric van. That would be
a drastic change. And so we're less I'm at this
point in my life, I'm less interested in making serious
changes to my life as opposed to like more wind
in the sales that are pushing me towards the things
that I'm already pursuing. Yeah, and I hope that you know,
most of our listeners find themselves in a position like
(29:15):
that where a lump sum of money would be helpful
but not life changing, right in the way that so
many lottery winners wanted to be. They want to completely
change their life. And hopefully we are able to find
enough satisfaction where we are currently, uh that it would
be more fuel for the fire than it would be
(29:35):
just like alright, I'm buying a private island. You know
that that kind of respons But yeah, let's talk about
Matt lessons that we can learn if we did somehow
win the lottery, or you know, at least what to
do if an unexpected lump sum falls into your lap.
Just some practical steps, like make sure that you think
through some of these things before you do anything. Yes, yes, yeah,
hopefully you know if you won the lottery because you
(29:56):
just like randomly found a ticket lying on the ground,
as opposed to actually going into the gas station and
buying that ticket, or would you pick it up off
the ground, like yeah, outfit with the winning ticket off
the ground. That goes back to her early discussion. But yeah,
the the this advice ultimately extends far beyond just winning millions, right.
It's it speaks to what you would do if you
receive an inheritance of let's say, even fifty dollars, which
(30:17):
is a big sum of money, and for most of us,
that would have the ability to jump start a whole
lot of our like career or money goals. That's a
lot that could fall into your lap. And you want
to have at least thought through what you would do
with it. You want to use it wisely, not in
a spur of the moment decision. You don't want life
changing money to hit and then to screw it up
like that. That would be demoralizing, That's right. And so
(30:39):
the first tip, the first lesson that we have for
folks that we would recommend is to stay anonymous, uh,
not living in a flashy kind of way, even if
you can afford to. It's probably good for you mentally anyway.
I think that would probably be a good sign of
overall health. Even if we're just you know, talking about
a smaller inheritance, it's probably best to not spread that
news around to your entire friend group. We would recommend
(31:02):
for you to be a little more discerning with who
you talk to about it. And this might sound like
it kind of flies in the face of our goal
to to get people to open up and talk about
their money, but it actually doesn't. Talking about the big
money that you've come into can create jealousy, It can
create division even amongst good friends. UH. It can really
hurt your your relationships, and so we want you to
(31:22):
keep that in mind. You know, even on an individual level,
it can be difficult to figure out what you want
to do with this money. Uh, and I can imagine
it would only be even harder if you have a
litany of folks who are also speaking into your life,
projecting their values and how you know, they feel that
that they wish that they could spend their time uh
and kind of pushing that on you. Or they might
come asking you for, you know, some seed money to
(31:45):
start their business or handout or something like trying to
be like Mark Cuban and get this thing off the
ground exactly. You can be the shark tank for me now,
and that can create a whole lot of awkwardness. So
I agree, Matt. I think staying anonymous and not like
blasting it out there to everyone how much mone of
you just landed upon, that's a really good thing to
avoid if you just stumbled upon some life changing money,
(32:06):
whether it's to an inheritance or whatnot. Another lesson that
we think that anybody inheriting a good sum of money
should should implement is too slowly increased spending in a
few areas that you've identified as being the places that
move the needle for you. Right. I mentioned fulk, heart
and travel as to spending categories that I would amplify.
I know that now, and so if I do, somehow,
(32:29):
for some reason, inherit more money, then I know that
those are two places I am more than happy and
more than willing to increase my spending. But then there
are other spending categories that would stay the same for me,
like keeping that old car and staying in my current home.
I think for all of us we would find that
additional money. Uh, it's easy to just absorb it into
(32:49):
your lifestyle, but it's gonna have an amplified effect if
it's targeted towards just a couple of areas that you
get a lot of pleasure from. Otherwise it's going to
be that easy come, easy go. It is going to
be funneled out really quickly, and it's not going to
have the impact on your well being and your happiness
that you wanted to. That's write. Another lesson we have
for folks is uh that no matter what money gear
(33:10):
you're in, spending a small amount like maybe ten percent
of a lump sum or maybe even less than that
if you're talking about millions of dollars, but spending that
in any way you choose, we feel that that might
be able to provide the strength for you to do
smarter things with the other We feel that it's okay
to splurge, but we would want you to splurge thoughtfully
(33:30):
in a way that aligns with your money mission statement.
Because again we've referred to this almost as like a
pressure release valve in the past. Uh. And if you've
got this iron tank and if the pressure gets too high, well,
if there's no release valve, and you know, the alternative
is just for it to explode and for you to
lose all that pressure, well, we would rather you lose
a little bit of pressure off on the side, uh,
(33:52):
in order to maintain the you know, the overall majority,
the bulk of that pressure to do good things that
you want to be able to see get accomplished. Yeah. Matter.
I think of like a yo yo diet where people
are constantly bouncing back and forth between gaining weight or
losing weight. It's if it's not sustainable, then it's it's
gonna lead to something like that exactly. And so I think, yeah,
(34:12):
you need almost that pressure release valve so that you
can pursue the greater good by being able to apportion
a small percentage towards some spending. Now that's going to
allow you to stay the course. I think one of
the other lessons that it's important to heed if you
do end up with a lumps of the money as well,
is to pay attention to the secondary costs of any
(34:34):
of the stuff that you end up buying. Like let's
say you you did inherit some money and you were like,
it's been a priority for us to get into bigger
housing and now is the time. Well, that's great, but
it's important to note that a bigger house means higher
property taxes and more money to upkeep right you're gonna
be spending more on repairs. And yeah, let's say a
new car is something like, you know, I've been meaning
(34:55):
to upgrade my wheels. Now that I got this lump sum,
it's the perfect time for me to get a new
car and my life, well, it's gonna be mean higher
insurance costs. And uh, those are the kind of secondary
cost that we want you to prioritize and to think
about before you make that spend. Let's take it to
the extreme. I'm thinking about like EMC Hammer back in
the day when he was worth a ton, and he
bought like this huge house and bought a bunch of
(35:15):
race horses. He had like I don't know, like a
full like a dozen race horses, and you know what,
horses cause a lot of money. There's a lot of
people that are required in order to keep these horses healthy.
It's it's way more than just the price of that horse. Surprises.
The land and the stables and the food and the
people that are gonna, you know, help you keep those
horses in good shape. And then of course ultimately he
ended up bankrupt. So yeah, so don't follow don't be
(35:38):
like Emcy Hammer exactly. Uh, the same thing Matt on
a smaller level too. If you buy some golf clubs,
it's like, well, I'm gonna go want to play play
more golf, and it's gonna be in higher greens fees
for you. Or even like the reverse, if maybe one
fresh new pollos, if you yeah, well, if you flip
it right, and if you join a fancy club, it's like,
oh man, everybody here at this fancy club, I've upgraded
my friends, and so now these new friends require that
(36:00):
I have in new clubs, a new car. Oh maybe
we should move into the same part of town that
they move into. These are all things that we want
you to consider when you're thinking about making some changes
to your life that could drastically upend it. That would
be uh an example of the Dinero effect right where
what was it? The French philosopher He got a new
robe and then he was like, man, everything else looks dingy.
Now like my waistcoat is beautiful, everything else looks terrible. Right.
(36:23):
You don't want to be in that position. You know,
It's okay to spend some of the lump sum that
you receive, just don't spend more of it than you
want to and if you don't factor in the secondary cost, well,
you're bound to do exactly that. You are going to
spend more than you want to because you haven't really
thought through the full ramifications of where that first dollar
goes and how other dollars are going to flow in
that direction too. Yeah, in that vein, be cognizant of taxes.
(36:45):
You know, while there's no federal tax on inherited money
at least below a high, really high threshold, some states
do have an inheritance tax on the books, others don't.
So if you inherit an IRA is important to know
about the ten year rule. It's important to know about
the ordinary income taxes that you'll owe when you start
pulling money out, and so keep that in mind because
port planning can mean that you aren't prepared for a
(37:07):
major tax bill that comes due. You don't want to
find yourself in that situation. Yep. So those are the
main rules we would say to pay attention to if
you did somehow when the lottery or just to get
a lump some you know, in in your lap, which
sounds like it's great, it sounds all good, but there
are some downsides and there are things that you have
to think through so that you don't squander that kind
of money, right, And it's kind of funny to sit
(37:29):
back and dream about what you would do with millions
of dollars. That seems like an easy thing, like just
sit back and think about it and bask in the
glory that would be your riches. But when we look
at the evidence of how instant millionaires actually react the
eventual results that happen in the years that follow, within
three to five years, most of them are bankrupt. You know,
we see that this question is actually it's harder than
(37:50):
it initially seems or than it appears on its face.
You know, some real introspection is necessary if we're going
to be able to handle uh money that comes into
our lives well, especially unexpected money. And while a lump
sum of money can be a big help when it
comes to paying off debt or jump starting another financial goal,
we might just find that money isn't the only solution
(38:11):
to some of our biggest goals and desires. I think
a lot of how the money listeners Matt are going
to find that they actually have enough on hand now
to pursue some of those goals without delay, that they're
not going to have to wait until they do stumble
upon some sort of inheritance from an unknown relative. As
they ask themselves some of these questions, they're going to realize,
you know what, I have more ability to pursue some
(38:33):
of those things that I say are important that I
just haven't started pursuing yet. Many folks are going to
be able to get started on their dreams and on
those goals, I think, sooner than they thought possible. That's right. Yeah,
it doesn't take a million dollars. It doesn't take winning
the lottery in order to live the kind of life
that you would be happy living right now. And on
that no, jel, a life that we're happy living is
(38:54):
one that includes craft beer. On this episode, you and
I enjoyed a crucial crucial tount tunt. But is that
there's like some sort of kids song or kids saying that, like, uh, dad,
now I want my money back? What is that? What
is that saying? Um circled dott, circle dott, I want
my shot? That's what I'm thinking of, something like that.
On that note, make sure to get your vaccine if
(39:14):
you haven't got your cootie shot. But yeah, this is
crucial Crucial Taunt Taunt Enhanced. This is a beer by
the Veil out of Richmond, Virginia, the last of a
few Veil beers that we've been having recently. What were
your thoughts on this one? But dude, this was another
great one from them. They're one of my new favorite breweries.
I love it. They're not too far up the coast
from us. But the hops, I would say, are vicious
(39:37):
in the best way, like they are attacking. It's like
a band of marauding hops has just calm and assaulted
my tongue. But I'm more than happy with that because
it was delightfully tasty. It was refreshing, but it's not
thirst quenching. It's not that kind of beer. It's not
it's not juicy, I would not say, um, although it
has elements are not like the fruity elements, but it
(39:59):
does gonna end on a dry note. Yeah, And it's
just so intense it's hard to be refreshing. But on
occasion I like a really intense beer, and this was
a good example of a really intense I p a. Yeah.
I think the intensity for me is translated through like
that tingle that you you you feel sometimes with like
a freshly hopped I p A or in this case
just a double dry hopped I p A. It's like
pop rocks in a beer kind of almost yeah, yeah,
(40:21):
it's almost. It almost has this like numbing effect on
your mouth. But I don't know that that makes it
sound like it's not good like numbing in a good way,
but super dank, juicy in the sense that it had
like the fruit going you know, going on. It wasn't
like this, It wasn't like drinking orange juice, but above
everything else that had that tingly nature going on, in
a sharpness that accompanied it that oftentimes you find in
(40:42):
a blue cheese, not what most folks are looking for
when they're drinking a beer. But I still can't remove
myself from thinking about that dry sharpness when it comes
to some of these beers that are really hot like this.
That's why the Veil is not gonna have us do
any of their commercials anytime soon. I'm sure not not
even know if they do commercials, but I guess Caesar salad.
(41:02):
But it really is good, and they make it makes
just some really good beer, so really delicious, and it's
got this dope label where it almost looks like you
should be wearing like three D glasses. You're looking at it. Actually,
I wonder what it would look like if you had
on like those red and blue glasses. I wish I
had a pair hanging out here. I don't, unfortunately we don't.
But but yeah, this was out of Richmond, Virginia, and
again this is the Veil Brewing Company. And I'm glad
(41:23):
that you and I got to enjoy this one on
the show. But that is going to be it for
this episode. Listeners can find all of our show notes
up on the website how the Money dot com, and
we will make sure to link to that worksheet for
you to fill out your own money mission statement. We
think that that could help you tremendously when it comes
to knowing what you should be setting your sights on
with your money. Yeah, and just know that Matt and
(41:45):
I we always love to hear from listeners. Feel free
to drop us a line at how the Money Pod
at gmail dot com, especially if you do have a
chance to do this money mission statement, let us know
if it's helpful. But that's gonna do it for this episode, Matt.
Until next time, Best Friends Out and Best Friends Out.
Welcome to How the Money. I'm Joel and I am Matt.
Today we are asking the question what if you won
the lottery? Yeah, Joel, this is gonna be a fun episode.
(00:27):
We are going to talk about what to do not
only if you win the lottery, but also too if
you came into possession of a lump sum, right, if
you just had some sort of large windfall. Because let's
be honest, a few of us are going to actually
be lottery winners. That is not the path to wealth
that we would recommend. Uh, And so we've got a
lot of great thoughts to share regarding what to actually
(00:48):
do though, were you to win the lottery or if
you came into possession of a large amount of money. Yeah,
at some point in your life, there's a chance that
somehow you're going to have more money than you know
what to do with. And that, Matt, that could be
from a whole bunch of different things. That could be
like a bonus at work, that could be selling a
house and having a pile of money and you're like,
what do I do now? You know, a lot of
(01:09):
people are granted putting it directly into the down payment
on their next house, but there are these moments that
arise and even if that moment never happens for you,
I think there are some important things we can gain
by asking ourselves this question, like what would we do
if we won the lottery? And I feel like we
should actually be giving away some money on this episode
where not you don't have a lot of bills to
(01:29):
toss out there to the folks who are listening. Sadly, no,
but we'll still discuss this in depth. Will do this
this like mind exercise essentially today about what would it
look like, and Matt, you and I will actually share
our thoughts on kind of how our lives would change
if we won the lottery. Not that we're going to
that's right, man. But before we get to that, I
had a quick question for you. Do you pick up
money on the side of the road, Like, like, if
(01:50):
you see, say a dollar on the sidewalk, yeah, I
think you know, or unless it's there's gum attached to
it or and then I'm probably it's gonna let it be.
If it's a poop dollar, you would have it. But
what about like would you pick up a dime? Uh? Yeah,
I'd probably pick up a dime, Okay, penny. What about
a penny? No, not a penny. I leave the pennies
be I would pay. I want to see we've talked
(02:10):
about this on the show before. I want to see
pennies be banned anyway. So it's still money though it is,
you know, so regardless of what you feel about it,
it still exists and it's worth something, even though it's
not worth much. I would pick up a penny, I think,
depending on what kind of condition it's in, right, Because
if it's laying there and it's like shiny, like super
shiny and fresh looking, looking like it was just mented,
you know, last week, that kind of thing, I'd be
(02:31):
willing to pick it up. But if it's looking nasty,
I'm not willing to risk my health for something that
looks disgusting. But okay, So on a similar note, what
would you do if you received a check? I thought
you're gonna say for a klondyke bar. No, okay, this
isn't like nineties television. What would you do with a
check that you received from, say, a credit card company
(02:52):
for one cent? So I would deposit it because I think,
but there's a reason I think for the difference. One
the penny. It's gonna go into my into my like pocket,
and I mean, I have to figure out it's some
later date what to do with it. I'll stick in
like we'll change drawer in the car or something like
that in the jar, and eventually you can, you know,
take that into a credit union or somewhere local where
(03:12):
you can actually deposit that into a real accind of,
I guess you're right, but it's just a little more
cumbersome than is to quickly deposit a check, even if
it's a check for just a penny. I would probably
deposit I would. I wouldn't be so bold as to
crumple it up and throw it in the trash without
depositing it, because principally that feels terrible, right, like to
actually throw money away. But even though we still like
(03:33):
we might buy pass money that's on the sidewalk. I
ask you this because this actually happened to us last week.
We received a one cent check from a credit card
that we had closed, and we had a credit of
one cent, and they went through the trouble of mailing
us a check in the mail. I mean, what does
it cost a mail a check or you know, a
letter these days in liket eight cents, the price went up,
(03:54):
and so they must the cost of printing the check
and mustn't even count that. Let's let's quantify the known expenses.
They spent fifty eight times more money on just getting
that stupid check twist than the actual amount of money.
It's ridiculous. So I think Kate thought I was just
going to toss it, but like you, I was like,
of course, not flip that thing over. I signed it,
pulled out my phone, took a picture of it, uh,
(04:15):
loaded it in the you know, the mobile app, and
deposited it. But I agree, there's almost a removed barrier
when it comes to depositing money via a mobile deposit
as opposed to sitting in the jar for who knows
how long. But we want to encourage folks to be frugal.
Don't bypass money, even money that you see on the sidewalk,
because I'm like, Joel, you can take that money home,
maybe wash it if it looks extra nasty. I'm saying
(04:37):
this for myself too. Are you're gonna give your penny
a bath? Come on? Uh? Yeah? Have you have you
never washed money? I've even watched bills before We're like,
just put it under the running water in the scene
with a little bit of dish soap and just set
it over the side to drive. I think if it's
money laundering and that's the legal kind of money laundering, yeah, no,
I don't think I've done that, but I totally have.
(04:59):
I know people that because I in their bills sometimes
and I've found that to be kind of fascinating and
something I'm probably also not going to partaken. Well, I
wanted to share that with you because I thought it
was a funny story because Kate was sure that I
wasn't actually going to deposit that that one since, but
I felt like I had to. I feel like she
should know you better at this point, you know, she
should have known that you were definitely gonna deposit that.
(05:19):
I could have Yeah, I could have fallen on the
other side where I was just like, this is ridiculous.
I'm not gonna waste my time. I'm being cheap with
my time where I had to go through all that,
but it isn't very hard to make a mobile deposit anymore.
That's right. Your your time is not worth that much yet,
you know, all right, Well, let's move on Matt, let's
mention the beer that we're gonna have on this episode.
This one's called Crucial Crucial Taunt Taunt Enhanced fascinating beer
(05:39):
name by the Veil Brewery out of Virginia, and they
make some great stuff. Man, looking forward to having this
beer today on the show with you. But we'll get
to that in just a little bit. Let's get onto
the subject at hand, Matt. We are asking the question
what if you won the lottery? And there was actually
a recent lottery winner from Myrtle Beach, South Carolina. This
guy I actually he won the lottery two weeks in
(06:02):
a row. I've never heard of this before. He won
forty dollars the first time, and then he decided, you
know what, I like my chances. I think this is
going to happen again. Uh. And he was right, because
he won four million dollars with the second ticket, isn't it. Yeah?
But here's the thing, right, you have a greater chance
of being struck dead by falling airplane parts than winning
(06:24):
the Powerball lottery. Actually, you're thirty times more likely to
get hits by falling debris from a plane than you
are to actually win the Powerball jackpot. Yeah. So I mean,
if that doesn't put things in respective, I don't know
what does. But I think what that really says is
that playing the lottery, it's really just a complete waste
of your time and money. Even if this one anecdote
(06:44):
of this guy in Myrtle Beach, South Carolina makes it
seem like it isn't. It's like, oh, that guy won
it twice. I mean I could probably win it once. Right, Well,
the answer is no, and I guess you could, but
it's incredibly highly unlikely. Right, And so the question is, well,
how much money are we wasting playing the lottery each year?
And over a thousand dollars per person a year on
(07:05):
average is what people are spending playing the lottery. Some
people obviously more than that. Somebody's is spending two thousand
dollars a year compared to my zero, I guess. But
today on the show, we want to get a little
imaginative and talk about what life could or should be
like if you actually did win the lottery or came
into a lump sum. But we want to say you're
not actually gonna win the lottery, so don't even try.
That in and of itself is a bad idea. It's
(07:27):
a waste of your time and money. Yeah, we've all
heard of the phrase easy come, easy go, And when
it comes to winning the lottery, man, there is a
whole lot of truth to this one, because most lottery
winners actually go broke, declared bankruptcy in fact. And most
of these folks go from you know, having very little
to becoming filthy rich and then going back to having
nothing within a span of three or five years. It's
(07:48):
a short lived cycle. It's not like it even lasts
like it's like it wasn't a great twenty year run
or anything like that. It's like just a few years, yes, exactly,
and receiving just an insane amount of money like this
actually ends up causing financial troubles, which is kind of crazy.
Studies show that lottery winners don't end up any happier
as well. Winning the lottery is actually a quite miserable
(08:08):
experience for many. But still, we want to pose this
question today. We think that there's a lot that we
can learn by pulling it over, by you know, talking
it over with a friend or a partner, if you're
sitting at home listening, because even though statistically speaking, you're
not going to win millions of dollars. We feel that
this exercise can provide some insights just about the ways
(08:28):
that we want our time and our our money to change.
And so yeah, we want you to ask the question,
what would I do with a large sum of money
that fell into my lap? Well, yeah, many of us
are likely, I would say, to see some sort of
a windfall at some point in our lives, some of
us actually recently. You saw it this past year when
it came to stimulus checks. That was kind of a
(08:49):
windfall for a lot of people. That was unexpected. And
I know a lot of how the money listeners were
responding and saying, listen, I'm still employed and I got this.
You know, some tossed into my lap, especially if you
have a couple of kids. I'm not sure what to
do with it. It could be a huge bonus at
work that you weren't expecting, or maybe you sold a house,
like I said earlier, for fifty more than you thought
(09:10):
you were going to, which is not unheard of in
this market. Or you know, maybe it is an inheritance
that you weren't expecting, some uncle that you're like hadn't
spoken to in years, left you in as will, and
you've got some cash and you don't know what to
do with it. And if we haven't taken the time
to think through what we would do in these scenarios,
there's a good chance that we can make the wrong
(09:31):
decision in the heat of the moment. It's really it's
the reason that office buildings and schools have fire drills, right.
It's important to plan ahead because when you smell smoke,
the alarms blasting, there's like hundreds of coworkers or in
the case of a school, little kids running around, it's
easy to panic and make the wrong decision. So having
that plan and then practicing it helps everyone know what
(09:51):
to do when a real fire happens. It helps that
muscle memory to kind of take over, as opposed to
trying to figure it out in the moment. Yeah, that's true. Yeah,
without a plan, we just get swept up into the
crowd and just do what everyone else is doing, freak
out running kind of stuff. And here, you know, that
might actually work out if you're just trying to get
out of the building, because most folks are probably running
for the exits, you know, but this could be treacherous
(10:12):
when it comes to what we should be doing with
our money, because yeah, have you seen the kind of
financial decisions that everyone else is making out there? If
you don't have a good reason to not go with
the flow, well, why wouldn't you do what everyone else
is doing? Why wouldn't you live your life in a
way that just mirrors your parents or mirrors your co workers?
Why not buy that new gadget that everyone else has
(10:34):
or that's being marketed to you that popped up in
your Instagram feed, which I'm telling you, man, those ads
are getting so targeted and so specific. Uh, it's ridiculous.
By the way, I saw that TikTok just launched the
by feature in that feed too, So it's it's coming
at you from everywhere. People are gonna be buying left
and right, And so if you haven't given it much
or honestly any thought at all, we're likely going to
(10:57):
just drift through life. We're gonna be like a ship
without a rudder if we don't proactively and intentionally think
about what we're going to do, not only with our life,
but with our money. Yeah, and I guess some of
the things that we see other people doing, they're not
always inherently bad, right, there are people around us who
are doing good things as well. For example, like taking
on an ambitious project at work. You're stepping up and
(11:17):
you're looking for ways to prove yourself, to demonstrate that
you have the leadership and the brains to get it
done what it takes exactly, and that sounds like that's
always a good thing, right, in order to move up
the corporate ladder and get ahead. Um, that probably does
mean that you're closer to that next promotion and maybe
even closer to that C suite career path that you
had hoped would potentially happen, um and a salary that's
(11:40):
commensurate with it. But it also means working over seventy
hours every single week if that's the pursuit you take on,
and when you realize that, it's crucial to do some
soul searching before you end up embarking on that path.
Case in point, Matt, look at the junior bankers on
Wall Street who make a hundred thousand dollars plus. That's
the starting salary for someone fresh out of college, but
(12:00):
they don't have a life like they don't have anywhere
to spend that money because they're working so much, and
I guess the question is like, are the sacrifices worth it? Right?
Is it worth the sacrifice of your friends, your health
and to be able to even see your family? Is
that what you want your life to look like? It's
really really important that we're intentional with our lives. And
so it's not even always bad things that are leading
(12:22):
us astray. It's things that look good, but they're like
wolves and cheap clothing, they're they're they're actually bad because
it's not what we want. We're just kind of following
some stock trajectory. So not only do we feel that
it's an important exercise to think through what you do
with a load of money, but it's also a fun exercise.
It's a fun mind game as well. It's like Brewster's Millions. Man,
do you ever watch that movie back in the day
(12:44):
Richard Pryor So, I think the premise was basically that
he could inherit three million, but first he had to
spend thirty million dollars in thirty days and he couldn't
have anything left to show for it. So it's kind
of like it is a comedy with Richard Prior John
Candy and what we should go back and watch it,
and I was like, yeah, just kind of a fun exercise, right,
(13:06):
But even so, thinking through that, like you know, like
what's interesting about this is that it opens up this
whole realm of questions that are worth pursuing. And you know,
like you mentioned earlier, we're gonna get personal and share
our responses to hopefully we've already made a compelling case
why winning the lottery is actually a terrible goal and
nearly impossible and impossible truth. But rather, dude, I want
us to strive to build wealth instead of just striking
(13:28):
it rich. And this might sound like semantics, but there's
actually an important distinction here. I think the biggest difference
is that someone who is rich is gonna be focused
on spending and consumption, whereas someone who is wealthy, uh,
they're gonna focus on how to preserve, how to invest,
how to grow that money. Riches are just kind of
like the a flash in the pan, whereas wealth is
going to be able to endure not only years, but
(13:50):
decades and even generations as well. Uh. And so investing
and spending are are both important when it comes to
living a balanced life. And so we're gonna walk you
through steps you should take. Uh, if you did happen
to find yourself the recipient of a load of cash,
and so we will actually get some more of that's
right after this. Alright, we're back from the break. We
(14:18):
are asking the question and posing it to you. Dear
out how the money listener, what would you do if
you won the lottery? And like Matt said before the break,
if you only focus on the spending side of the equation,
you might be rich for the moment, but it's it's
likely not going to last very long. Right, First, it's
important to make sure that you're making wise decisions with
your money. And we believe that there are practical steps
(14:39):
that everyone needs to take. There's a hierarchy and an
order that we want to make sure that you've got
inline and you go in order of importance, and we
call them the seven money gears. They lay out essentially
that pecking order of financial priorities, and it's just really
really easy to see, Oh, I'm right here, I'm on
money gear two or I'm on money Gear four, and
(15:00):
here's what I need to do next. So, yeah, where
you are on your financial journey will determine the actual
money moves that you should be making. And the best
way we know to help you pinpoint exactly where you
are is that seven money gears formula that we came up.
When that's right, Yeah, So for example, if you're on
money your number three, this lump sum that you might
receive will act like a supercharger to help you tackle
(15:20):
some high interest rate credit card debt that you might
have way more quickly, maybe even in one fell swoop.
Just depends on how much debt that you've accrued and
how big that random sum of money is that just
ended your life or maybe your money gear number six.
If that's the case, then you'll have more options at
your disposal. You've been handling your money well for years.
If you're at this point where the only debt that
(15:40):
you have is a mortgage, but you now have the
added benefit of your financial life becoming a whole lot simpler,
which is really appealing for some folks. And so we're
not gonna go through all the money gears right now
here on this episode. We've talked about it in previous episodes,
but we would highly recommend you to head over to
How the Money dot Com slash start dash here uh
and you can find links to that from our landing
(16:01):
page on our website. But we've got all the different
money gears listed out and you can easily and quickly
determine where you are on your money journey. Yeah, and
it can be incredibly satisfying to work your way through
the money gears. It's kind of like watching the dominoes fall.
You know what that makes me think of? Have you
ever seen the like this demonstration where you've got like
these dominoes that get way bigger. So there's like a
(16:22):
small one, but it's just just thin enough to knock
over the this bigger one, which is just big enough
to knock over this other one which is huge, and
eventually the dominoes and I mean, yeah, seven down the
line or whatever that I mean, it's able to knock
over this massive board that's a giant domino. And that's
kind of what we're doing here with our money gears. Yeah. So,
maybe you're currently contributing four to your four one K
of work, and you know what, you need to contribute
(16:44):
two more percentage points in order to get that full match.
Well that's money gear number two. So once you're able
to do that, you're like boom, I'm onto the next thing.
I'm paying off high interest credit card debt and any
sort of high interest debt that's hanging in your life.
And it really can be motivating as you start to
see the dominoes fall and can tinue to work your
way through. It just gets more fun the more dominoes
that fall, right, And it's not that it's not fun
(17:05):
to knock over some of those first few dominoes. You
can have a lot of fun in life before you
reach you know, this pinnacle where you're able to spend
and invest a lot of money exactly exactly, But there's
just more freedom when it comes to like how you
want to appropriate that money when you're further along in
the money gears, right, But we want to make sure
that you are doing the smart things with your money first,
(17:26):
and then you begin to start dreaming big. So, yeah,
if you want the lottery tomorrow, that's great, but we
want to make sure that you know which money gear
you're on and which money priorities you would be tackling
first before you start to think about the kind of
fun things that you would spend that money on. Yeah,
for the most part, what we're basically saying here is
that money. Years one through six are kind of like
(17:49):
required reading before you you're able to move on to
number seven. Yeah, it's like, it's like, why would you
start with Harry Potter Books seven? You wouldn't you'd read
the first six first? U exactly, You wouldn't even really
know what was happening. But I would say, you know,
if you haven't spent much time thinking about what your
life would look like if you received a massive windfall,
then like some out there, might feel it difficult to
(18:09):
bring himself to spend any of it. You know, maybe
you're paralyzed by the fear of doing the wrong thing
with that money. But one of the ways to do
this is to create a personal mission statement here on
the show, oftentimes we call this the why behind your money.
But being able to hone in on what is important
to you like that will also dictate what you should
do with this money, or at least it should dictate
(18:30):
what you do with that money. Uh. And so think
through some of the longer term goals and what it
is that you'd like to achieve over the next five
years or over your lifetime. Another question you can ask yourself,
if I'm going to die next year, like what are
my actual priorities in the here and now? And we've
actually got a great free worksheet up on the website
that we will link to, but you'll be prompted to
answer some some questions like these, uh, and it will
(18:53):
give you some clear direction as to what you should
be doing not only with your life, but then what
you should be doing with your money. We will make
sure to link to that in our show notes, but
you can go directly there as well by going to
how the Money dot Com forward slash money mission statement. Yeah,
I love giving our listeners homework assignments on occasion, Matt.
We don't do it very often, but this one we
think is worth your time. You know, if you go
(19:15):
through that link, and we're not trying to sell anything,
We just really want you to take the time, be introspective,
take an hour to go through some of the questions
that we've listed out and to think through some of
this stuff, because it's gonna be really instructive into not
only how you move forward with your money regardless of
whether or not you won the lottery, but also just
kind of like how you think about what it looks
(19:37):
like to live a good life. Um, and it's also
help helpful to keep in mind like your favorite things
to do that that's one of the other things we
talked about actually in that Money Mission statement. Research shows
that the happiest retirees aren't the ones that have saved
the most money. They're actually the ones who have a
comprehensive lifestyle plan. And a friend of the show, Wes Moss,
has actually written extensively on the subject, and he's a
(19:59):
fine anential planner in the Atlanta area, and he's found
that it's the hobbies and the people you have around
you once you're done working that make retirements great for
you or not so great. You know. He found that
the average happy retiree has three point six core pursuits,
while the unhappy person in retirement has less than two.
Saving money, obviously, we're big fans of that. We think
it's really important. We talked about it a lot, but
(20:21):
it's not enough. If you become too focused on the
money side of things, you'll be missing out on the
really good stuff. And so that's why this Money Mission Statement,
we think it's really instructive for individuals to spend a
bit of time answering those questions because it's gonna inform
how you decide to allocate your money and whether you
decide to allocate a little more towards retirement because you're
(20:42):
not prioritizing it enough right now, or whether you say, actually,
right now, I'm overdoing it. I need to live life
a little more in the here and now. But we
hope you give it a shot, and we hope you
find it helpful. Yeah, going through these steps will help
you to think about the most important things in life. Uh.
And what's fascinating too, is that many of the things
that you're gonna likely write down don't even cost much money,
(21:02):
but you know, they might help you to realize that
you want to, say, workless, maybe cut back to part
time hours eventually, or even like take an extended leave
of absence. But at the same time, it also might
not mean doing less. That kind of depends on you.
Depends on the individual. Because maybe you've always wanted to
start your own business or write a book. The slump
sum of money can help you to do something that
(21:24):
you've been putting off, and these questions can help you
to pinpoint the things that you really want to accomplish
with your life. Yeah, or maybe I made the c
suite example earlier, Matt, maybe you realize that that is
actually something that you want to do, and you want
to work seventy hours a week, and that is truly
fulfilling for you. Like we all find fulfillment in different ways,
and we don't want to knock anybody's pursuit of doing
(21:46):
something that they love and enjoy. We just want them
to do it with intentionality. And yeah, even if a
giant lump sumb never falls into your life, you're likely
to find that doing this introspection um can help you
to begin to fund certain things that you haven't prioritized
yet and that you realize, Man, I should have gotten started.
I should be putting money where my mouth is now
(22:07):
that I know, and I've got it in writing that
this is important to me, I'm gonna do so. And
you might realize that you actually have the money right
now to make some of those things a priority, even
though it felt like maybe you know, a multi month
trip to Ecuador, or that pivot to starting your own
business was out of reach. Maybe you'll realize that it's
not that you actually have the money on hand now
(22:29):
and it's important enough to you that you actually begin
to get the ball rolling earlier than you thought you could.
I think you're gonna be able to use some of
these responses to help you create short and concise money
mission statements that guide you through good times and bad,
through market ups and downs, through employment ups and downs,
and through just, yeah, the shifting landscape of your life.
So yeah, that's why we think putting pen to paper,
(22:50):
going through an exercise like this can be just immensely helpful,
not just in the here now, but also if you
were to stumble upon just quite a bit of money.
And yeah, so Matt, after the break, you and I
were going to talk about what we would do if
we stumbled into a whole lot of money, and then
we're going to give some lessons five specific things you
need to do if a lump sum does land in
(23:11):
your lap. We'll get to that right after this. All right,
we are back then. Joel kind of talked about this
before the break, But what would you do if if
you win the lottery? You want to kick it off first,
so I would not go to Vegas? That's that's you know,
(23:34):
you talk about going to uh the casinos before uh specifically,
is that black jack that you you enjoy Yes, my
mother in law lives thirty minutes from casino. The casino
and once every like two or three years, I'll go
there and I'll you know, take a hunter Bucks and
I'll play some black jack, and I do find it
very enjoyable. But I would not ramp up my gambling
if if I won the lottery. What I would do?
(23:56):
I think, Matt it really you know, you know, I
spend a lot of time talking about this because as
we're best friends, we've talked about this kind of stuff
off the air, and you know, it's my goal to
live life in such a way that winning the lottery
would really have like a minimal impact on my life.
I wouldn't want some massive lumps some to change much
about the way I do the day to day. Uh. Really,
(24:17):
I don't have any We we actually write about this
on our about page on our site too. We don't
have any desire to be the next Jeff Bezos or
the Elon must like, we don't want billions of dollars
to our name. So if I somehow landed in that position,
my first instinct would be to invest a chunk for
the future, just to make sure that it's growing and
that I keep my options open. Right. That's money gears
one through six. Make sure that you are doing eliminating
(24:38):
debt and making sure that you're preserving your money and
hopefully making it grow exactly. And even if I'm not
sure what to do with it right now, I love
the idea of saying, all right, it's it's going into
the market just so that I can prepare for the
eventual things I want to do with it. It gives
me time to decide, then, Matt, I think I would
find a way to go out Mackenzie Bezos on like
a huge swath of that money. I've been like really
(25:00):
impressed by her approach to philanthropy and her desire to
give away like a huge chunks of her fortune. Uh.
You can tell that her desire is not to absorb
this and live some you know, lives of the rich
and famous lifestyle, but it really is to say, like,
what good can I do with this money? And I
think that's awesome. Um. I think on top of that,
I would try to find ways to incorporate some of
(25:20):
that money to give a small boost to some of
my current financial priorities, especially when it comes to like
spending more on lifestyle things for my family and I,
you know, maybe a little bit more on some of
the art that we love. I've talked about my love
for local art and full heart on the show before
and taking trips with my family, taking some maybe trips
that were a little bit further off in the distance
(25:42):
for us. Uh, maybe taking some of those trips a
little bit earlier than I thought. But other than that, like,
I don't think much would change even if millions of
dollars were thrust into my lap, which I don't imagine
that happening anytime soon. But uh, you know, we would
keep our house, We would keep our old school two
thousand six minivan. I don't think I would upgrade either
of those things, you know, from the outside, if it
wasn't on the news, like Joel won the lottery, most people.
(26:04):
I don't think most of my friends wouldn't know about
that windfall unless I actually told them, because I don't
think they would be like, well, what's that got doing
over there? He's obviously just spending He's spending so much money.
He didn't used to live life like that. That's nothing
kind of I'd really want to keep things very similar
to the way they are now totally. Yeah. I mean
I think we're we're in a really similar boat. You know,
Like over the years, we've given a lot of thought
to what we want our lives to look like like
(26:26):
right now, and we've just worked towards that goal. And
so I feel like we're we're kind of almost living
like we're millionaires now, like almost like we already have
won the lottery, right like, And so I wouldn't foresee
any massive changes to the to the way we live
our life, but rather maybe a gradual raping up of
the things that we're already doing, sort like you said,
like I could see how we could just maybe increase
the spending on some of those categories just slowly over time.
(26:49):
And you know, like another practice that I think some
folks might find helpful is to think through what you
want your everyday life to look like, Like I know,
for Kate and I like, because we have kids, like
the next sixteen years of my life, like they're probably
gonna look a specific way, right like it's it's going
to include going to elementary, going to middle school, going
to high school. Uh, and so like at the moment,
(27:09):
I can't think of many massive life goals that I
want to have accomplished by the end of my life.
But as a parent to kids in school, I have
a pretty clear view of what my ideal day to
day life should look like. Now, you know, like earlier
we're talking about you're saying your biggest priority is more
family than career oriented, Like you really are more focused
not just family, but just what I want to fill
(27:30):
my days with, because sometimes it doesn't include family things, right.
I guess I mentioned this because earlier we're talking about
mission statements, and I think sometimes it can be difficult
for some individuals to latch onto like the big thing
that they want to have accomplished in twenty years. And
so if that's you and you have a difficult time
thinking of this money mission statement that you want to
wrap your head around, sometimes it can be more helpful
to think about what you want your your day to
(27:52):
day to look like, uh yeah, your money can then
inform it doesn't have to be all these big future things.
It really can be like, how can my money all
allow me to live every single day right now? In
just a way this more conducive, Like it can mean
less hours worked on a consistent daily basis, Like or
just more flexibility in your work or commute options, and
(28:13):
you can say, you know what, right now, I can
take less money in order to make that a reality,
um without actually having to win the lottery totally. Yeah. Yeah,
So so thinking through sort of like that daily rhythm
of what you want your life to be like that
could be really helpful for some. In previous episodes, we've
even kind of referred to it as like designing your life,
and we've included some questions that pertain to that in
(28:34):
the money mission statement, and so yeah, you know, like
at the end of it, like while I wouldn't see
us making any serious changes to our life, I can
definitely see ways that we could use that money to
essentially reinforce and to complement the life that we are
seeking to live. Right now, you're not gonna go get
out and get like that new electric hummer or anything
like that. Well, if there's like a new electric van,
(28:54):
I don't know, like maybe we would do that, but
yeah hummer, that would be talking about that for years. Okay,
don't steal my b W electric van. That would be
a drastic change. And so we're less I'm at this
point in my life, I'm less interested in making serious
changes to my life as opposed to like more wind
in the sales that are pushing me towards the things
that I'm already pursuing. Yeah, and I hope that you know,
most of our listeners find themselves in a position like
(29:15):
that where a lump sum of money would be helpful
but not life changing, right in the way that so
many lottery winners wanted to be. They want to completely
change their life. And hopefully we are able to find
enough satisfaction where we are currently, uh that it would
be more fuel for the fire than it would be
(29:35):
just like alright, I'm buying a private island. You know
that that kind of respons But yeah, let's talk about
Matt lessons that we can learn if we did somehow
win the lottery, or you know, at least what to
do if an unexpected lump sum falls into your lap.
Just some practical steps, like make sure that you think
through some of these things before you do anything. Yes, yes, yeah,
hopefully you know if you won the lottery because you
(29:56):
just like randomly found a ticket lying on the ground,
as opposed to actually going into the gas station and
buying that ticket, or would you pick it up off
the ground, like yeah, outfit with the winning ticket off
the ground. That goes back to her early discussion. But yeah,
the the this advice ultimately extends far beyond just winning millions, right.
It's it speaks to what you would do if you
receive an inheritance of let's say, even fifty dollars, which
(30:17):
is a big sum of money, and for most of us,
that would have the ability to jump start a whole
lot of our like career or money goals. That's a
lot that could fall into your lap. And you want
to have at least thought through what you would do
with it. You want to use it wisely, not in
a spur of the moment decision. You don't want life
changing money to hit and then to screw it up
like that. That would be demoralizing, That's right. And so
(30:39):
the first tip, the first lesson that we have for
folks that we would recommend is to stay anonymous, uh,
not living in a flashy kind of way, even if
you can afford to. It's probably good for you mentally anyway.
I think that would probably be a good sign of
overall health. Even if we're just you know, talking about
a smaller inheritance, it's probably best to not spread that
news around to your entire friend group. We would recommend
(31:02):
for you to be a little more discerning with who
you talk to about it. And this might sound like
it kind of flies in the face of our goal
to to get people to open up and talk about
their money, but it actually doesn't. Talking about the big
money that you've come into can create jealousy, It can
create division even amongst good friends. UH. It can really
hurt your your relationships, and so we want you to
(31:22):
keep that in mind. You know, even on an individual level,
it can be difficult to figure out what you want
to do with this money. Uh, and I can imagine
it would only be even harder if you have a
litany of folks who are also speaking into your life,
projecting their values and how you know, they feel that
that they wish that they could spend their time uh
and kind of pushing that on you. Or they might
come asking you for, you know, some seed money to
(31:45):
start their business or handout or something like trying to
be like Mark Cuban and get this thing off the
ground exactly. You can be the shark tank for me now,
and that can create a whole lot of awkwardness. So
I agree, Matt. I think staying anonymous and not like
blasting it out there to everyone how much mone of
you just landed upon, that's a really good thing to
avoid if you just stumbled upon some life changing money,
(32:06):
whether it's to an inheritance or whatnot. Another lesson that
we think that anybody inheriting a good sum of money
should should implement is too slowly increased spending in a
few areas that you've identified as being the places that
move the needle for you. Right. I mentioned fulk, heart
and travel as to spending categories that I would amplify.
I know that now, and so if I do, somehow,
(32:29):
for some reason, inherit more money, then I know that
those are two places I am more than happy and
more than willing to increase my spending. But then there
are other spending categories that would stay the same for me,
like keeping that old car and staying in my current home.
I think for all of us we would find that
additional money. Uh, it's easy to just absorb it into
(32:49):
your lifestyle, but it's gonna have an amplified effect if
it's targeted towards just a couple of areas that you
get a lot of pleasure from. Otherwise it's going to
be that easy come, easy go. It is going to
be funneled out really quickly, and it's not going to
have the impact on your well being and your happiness
that you wanted to. That's write. Another lesson we have
for folks is uh that no matter what money gear
(33:10):
you're in, spending a small amount like maybe ten percent
of a lump sum or maybe even less than that
if you're talking about millions of dollars, but spending that
in any way you choose, we feel that that might
be able to provide the strength for you to do
smarter things with the other We feel that it's okay
to splurge, but we would want you to splurge thoughtfully
(33:30):
in a way that aligns with your money mission statement.
Because again we've referred to this almost as like a
pressure release valve in the past. Uh. And if you've
got this iron tank and if the pressure gets too high, well,
if there's no release valve, and you know, the alternative
is just for it to explode and for you to
lose all that pressure, well, we would rather you lose
a little bit of pressure off on the side, uh,
(33:52):
in order to maintain the you know, the overall majority,
the bulk of that pressure to do good things that
you want to be able to see get accomplished. Yeah. Matter.
I think of like a yo yo diet where people
are constantly bouncing back and forth between gaining weight or
losing weight. It's if it's not sustainable, then it's it's
gonna lead to something like that exactly. And so I think, yeah,
(34:12):
you need almost that pressure release valve so that you
can pursue the greater good by being able to apportion
a small percentage towards some spending. Now that's going to
allow you to stay the course. I think one of
the other lessons that it's important to heed if you
do end up with a lumps of the money as well,
is to pay attention to the secondary costs of any
(34:34):
of the stuff that you end up buying. Like let's
say you you did inherit some money and you were like,
it's been a priority for us to get into bigger
housing and now is the time. Well, that's great, but
it's important to note that a bigger house means higher
property taxes and more money to upkeep right you're gonna
be spending more on repairs. And yeah, let's say a
new car is something like, you know, I've been meaning
(34:55):
to upgrade my wheels. Now that I got this lump sum,
it's the perfect time for me to get a new
car and my life, well, it's gonna be mean higher
insurance costs. And uh, those are the kind of secondary
cost that we want you to prioritize and to think
about before you make that spend. Let's take it to
the extreme. I'm thinking about like EMC Hammer back in
the day when he was worth a ton, and he
bought like this huge house and bought a bunch of
(35:15):
race horses. He had like I don't know, like a
full like a dozen race horses, and you know what,
horses cause a lot of money. There's a lot of
people that are required in order to keep these horses healthy.
It's it's way more than just the price of that horse. Surprises.
The land and the stables and the food and the
people that are gonna, you know, help you keep those
horses in good shape. And then of course ultimately he
ended up bankrupt. So yeah, so don't follow don't be
(35:38):
like Emcy Hammer exactly. Uh, the same thing Matt on
a smaller level too. If you buy some golf clubs,
it's like, well, I'm gonna go want to play play
more golf, and it's gonna be in higher greens fees
for you. Or even like the reverse, if maybe one
fresh new pollos, if you yeah, well, if you flip
it right, and if you join a fancy club, it's like,
oh man, everybody here at this fancy club, I've upgraded
my friends, and so now these new friends require that
(36:00):
I have in new clubs, a new car. Oh maybe
we should move into the same part of town that
they move into. These are all things that we want
you to consider when you're thinking about making some changes
to your life that could drastically upend it. That would
be uh an example of the Dinero effect right where
what was it? The French philosopher He got a new
robe and then he was like, man, everything else looks dingy.
Now like my waistcoat is beautiful, everything else looks terrible. Right.
(36:23):
You don't want to be in that position. You know,
It's okay to spend some of the lump sum that
you receive, just don't spend more of it than you
want to and if you don't factor in the secondary cost, well,
you're bound to do exactly that. You are going to
spend more than you want to because you haven't really
thought through the full ramifications of where that first dollar
goes and how other dollars are going to flow in
that direction too. Yeah, in that vein, be cognizant of taxes.
(36:45):
You know, while there's no federal tax on inherited money
at least below a high, really high threshold, some states
do have an inheritance tax on the books, others don't.
So if you inherit an IRA is important to know
about the ten year rule. It's important to know about
the ordinary income taxes that you'll owe when you start
pulling money out, and so keep that in mind because
port planning can mean that you aren't prepared for a
(37:07):
major tax bill that comes due. You don't want to
find yourself in that situation. Yep. So those are the
main rules we would say to pay attention to if
you did somehow when the lottery or just to get
a lump some you know, in in your lap, which
sounds like it's great, it sounds all good, but there
are some downsides and there are things that you have
to think through so that you don't squander that kind
of money, right, And it's kind of funny to sit
(37:29):
back and dream about what you would do with millions
of dollars. That seems like an easy thing, like just
sit back and think about it and bask in the
glory that would be your riches. But when we look
at the evidence of how instant millionaires actually react the
eventual results that happen in the years that follow, within
three to five years, most of them are bankrupt. You know,
we see that this question is actually it's harder than
(37:50):
it initially seems or than it appears on its face.
You know, some real introspection is necessary if we're going
to be able to handle uh money that comes into
our lives well, especially unexpected money. And while a lump
sum of money can be a big help when it
comes to paying off debt or jump starting another financial goal,
we might just find that money isn't the only solution
(38:11):
to some of our biggest goals and desires. I think
a lot of how the money listeners Matt are going
to find that they actually have enough on hand now
to pursue some of those goals without delay, that they're
not going to have to wait until they do stumble
upon some sort of inheritance from an unknown relative. As
they ask themselves some of these questions, they're going to realize,
you know what, I have more ability to pursue some
(38:33):
of those things that I say are important that I
just haven't started pursuing yet. Many folks are going to
be able to get started on their dreams and on
those goals, I think, sooner than they thought possible. That's right. Yeah,
it doesn't take a million dollars. It doesn't take winning
the lottery in order to live the kind of life
that you would be happy living right now. And on
that no, jel, a life that we're happy living is
(38:54):
one that includes craft beer. On this episode, you and
I enjoyed a crucial crucial tount tunt. But is that
there's like some sort of kids song or kids saying that, like, uh, dad,
now I want my money back? What is that? What
is that saying? Um circled dott, circle dott, I want
my shot? That's what I'm thinking of, something like that.
On that note, make sure to get your vaccine if
(39:14):
you haven't got your cootie shot. But yeah, this is
crucial Crucial Taunt Taunt Enhanced. This is a beer by
the Veil out of Richmond, Virginia, the last of a
few Veil beers that we've been having recently. What were
your thoughts on this one? But dude, this was another
great one from them. They're one of my new favorite breweries.
I love it. They're not too far up the coast
from us. But the hops, I would say, are vicious
(39:37):
in the best way, like they are attacking. It's like
a band of marauding hops has just calm and assaulted
my tongue. But I'm more than happy with that because
it was delightfully tasty. It was refreshing, but it's not
thirst quenching. It's not that kind of beer. It's not
it's not juicy, I would not say, um, although it
has elements are not like the fruity elements, but it
(39:59):
does gonna end on a dry note. Yeah, And it's
just so intense it's hard to be refreshing. But on
occasion I like a really intense beer, and this was
a good example of a really intense I p a. Yeah.
I think the intensity for me is translated through like
that tingle that you you you feel sometimes with like
a freshly hopped I p A or in this case
just a double dry hopped I p A. It's like
pop rocks in a beer kind of almost yeah, yeah,
(40:21):
it's almost. It almost has this like numbing effect on
your mouth. But I don't know that that makes it
sound like it's not good like numbing in a good way,
but super dank, juicy in the sense that it had
like the fruit going you know, going on. It wasn't
like this, It wasn't like drinking orange juice, but above
everything else that had that tingly nature going on, in
a sharpness that accompanied it that oftentimes you find in
(40:42):
a blue cheese, not what most folks are looking for
when they're drinking a beer. But I still can't remove
myself from thinking about that dry sharpness when it comes
to some of these beers that are really hot like this.
That's why the Veil is not gonna have us do
any of their commercials anytime soon. I'm sure not not
even know if they do commercials, but I guess Caesar salad.
(41:02):
But it really is good, and they make it makes
just some really good beer, so really delicious, and it's
got this dope label where it almost looks like you
should be wearing like three D glasses. You're looking at it. Actually,
I wonder what it would look like if you had
on like those red and blue glasses. I wish I
had a pair hanging out here. I don't, unfortunately we don't.
But but yeah, this was out of Richmond, Virginia, and
again this is the Veil Brewing Company. And I'm glad
(41:23):
that you and I got to enjoy this one on
the show. But that is going to be it for
this episode. Listeners can find all of our show notes
up on the website how the Money dot com, and
we will make sure to link to that worksheet for
you to fill out your own money mission statement. We
think that that could help you tremendously when it comes
to knowing what you should be setting your sights on
with your money. Yeah, and just know that Matt and
(41:45):
I we always love to hear from listeners. Feel free
to drop us a line at how the Money Pod
at gmail dot com, especially if you do have a
chance to do this money mission statement, let us know
if it's helpful. But that's gonna do it for this episode, Matt.
Until next time, Best Friends Out and Best Friends Out.
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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