Page 6 - October 2010 • Southern California Gaming Guide

Bill Burton: About Gambling
f you won a jackpot larger than $5,000, what would be the rst thing you would do with the money? If you answered that you would immediately put a portion of winnings in the bank or into some investment, then you are on secure nancial ground and should do well in the future.
ound Money is Often Lost
FI
If your answer was to buy something extravagant, then you might have a problem holding onto any
people reach adulthood with no real knowledge of how to set a budget or save for the future. Fortunately, we live in the information age and educational material about nances, budgeting and investing is readily available for free or a modest cost. ere are numerous websites, books, seminars and television shows devoted to teaching people about nances, whether you are a complete novice or an experienced investor.
Many people are confused or scared at the thought of studying nances, so they tend to ignore it. But if you don’t understand how to manage your own nances, you are destined to have problems. e good news is that a simple but e ective way to control your money is not hard to understand.
ere are a few basics. Determine your monthly income. Determine your monthly bills. Set up a budget so your monthly bills so not exceed your income. Make sure to include a certain amount of money to put into savings each month.
Be Prepared to Win
As strange as it may sound, most people are not prepared to win a huge jackpot when they gamble. As much as we dream about hitting the big one, most of us don’t believe it will happen, so we have no speci c plans for the winnings other than thinking about things we can spend them on.
I usually write about tips for managing money at the casino, but true money management starts at home. Becoming nancially educated by learning to set up and live within a budget will make you a winner in all aspects of your life. It will also prepare you to handle your winnings if you do hit a big jackpot at the casino.
You don’t want to become one of the statistics about winners who have gone broke.
Until next time, remember: “Luck comes and goes.. Knowledge Stays Forever.”
Bill Burton is the author of 1000 Best Casino Gambling Secrets and Get the Edge at Low Limit Texas Hold’em available online at www.billburton.com. Burton is also an instructor for Golden Touch Craps: www.thecrapsclub.com.
of your winnings.
e term “found money” is used to describe any money that you did not work for. It could be money that you won gambling, a gift, money you inherited, or money that you literally found. Most people treat
“found money” di erently from the money they earn. If you were walking down the street and found $100, you are more likely to spend that money frivolously than if you had to go into work on a Saturday to earn that same amount of money. is attitude towards “found money” is one reason why many large jackpot winners go broke within a few years
paper said,“ e fact that winning a large sum of money only postponed bankruptcy rather than prevented it, did not surprise me. But I was struck by the fact that when the recipients did le for bankruptcy, they didn’t have much of anything to show for their winnings. It didn’t go towards a house, paying down debt, or buying assets that were worth something a few years later.”
is is not the rst study done about jackpot winners ling for bankruptcy. ere have been several others over the last few years with similar
of their lucky win.
Research Shows...
A few weeks ago I read the results of a research study that will appear in a nancial journal edited by Harvard University. e study was conducted in Florida among lottery winners, but could easily apply anywhere where gambling takes place and large jackpots are paid out.
results. I’m sure that many people have read about athletes who signed multi-million dollar contracts right out of school only to end up broke after their playing careers end. ey essentially won the equivalent of a life- changing jackpot and squandered it away.
Financial Education
In his book, Rich Dad, Poor Dad, author Robert Kiyosaki wrote that most people want more money and think that they can get ahead if they earn more. However, when they make more money, instead of saving it, they simply spend more. He blames the lack of nancial education as the reason why most people can’t acquire wealth. It is also the reason why people who suddenly become wealthy through gambling winnings or inheritance have a hard time keeping their new found wealth.
Unfortunately, nancial education is not taught in school, and many parents never discuss nancial matters with their children. Consequently, many
e researchers identi ed 35,000 people who won from $600 to $150,000 along with 153 people who won more than $150,000 from April 1993 and November 2002. ey discovered that 1,943 or 5.5% of the winners declared bankruptcy within ve years of winning their jackpot. e study revealed that those people ling bankruptcy who had won between $25,000 and $150,000 had little or no assets above what they had before they won their jackpot. eir winnings had simply evaporated.
Mark Hoekstra, assistant economics professor at the University of Pittsburgh, who co-authored the
“As much as we dream about hitting the big one, most of
us don’t believe it will happen, so we have no specific plans for the winnings other than thinking about things we can spend them on.”
Page 6
SOUTHERN CALIFORNIA GAMING GUIDE
October 2010
About Gambling with Bill Burton