Winning big at the Pokies – Are you prepared?
With online gambling, and gambling in general, it is always important to be prepared for losing. Only gamble with money that you don´t need is common advice that is given in the first paragraph of almost every book about gambling. But of equal importance is to be prepared for winning, and winning big. If you do not believe that it is important to have a plan in place for winning big, you can go to You tube and watch video after video that documents the completely wrecked lives of people who won big at the pokies, tables or casino in general. The same phenomenon happens with professional athletes, the issue becoming so prevalent that the NFL requires rookies to take classes on it. In general, there are three things that go wrong with people who win big jackpots, and those are lump sum allocations, family and friends, and investments. It is important to think through all of these issues before you actually win and have at least a mental plan in place. When you win, your life will be full of adrenaline and excitement, which is usually not the type of state you want to be in when making financial decision.
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First off let´s talk about the lump sum verses yearly allocations. This applies to some jackpot winners, but more so big progressive pokie machine jackpots. To start off, the amount you win is actually based off of a yearly payout scheme, like twenty yearly payments. The rules will likely be different depending on the country and local laws, but most Australian casinos give players the option of taking a lump sum at usually 30 – 50% less overall money. Obviously the best advice is to take the yearly payments since it will give you twice the money. But there is a bigger and more important reason to take the yearly payments; experience. There are going to be many more things discussed in this article where people can make mistakes, and by taking twenty yearly payments, it gives you a chance to make some mistakes now and then without it totally destroying you. If you take a lump sum and make some major mistake, that is it, all gone. If you make a major mistake with your first yearly payout, you live and learn from it and have nineteen other payments coming where you can avoid repeating that first mistake. For many people, becoming rich is a completely different life, and one that you will have no experience at.
The second issue is with family and friends. You need to have, in advance, a plan on what you are going to give to your family and friends. But you also need to be prepared for how the people around you are going to change because of your wealth. As one winner put it, for the first year after winning, I had almost no normal conversations, everything was a sales pitch. Some of your friends and family will be more subtle than others, but you just need to be prepared for not only people asking you for money, but also becoming angry if you reject them. Most winners are surprised at how many people will call them greedy or selfish for not ´sharing the wealth´. But on the opposite side of that, there are also some high-profile stories of winners who actually become bankrupt by giving too much to family and friends. Some of the smartest lottery winners are the ones who take months to claim their prize because they use that time to plan how they are going to deal with family and friends. Some land based, and most online casinos will not require you to go public, although some state lotteries actually publish your name even if you don´t want them to do it. So that is an important issue, maybe forcing you to have to tell your family and friends.
The last issue is investments and businesses. If you have survived the first two pitfalls, you avoided throwing away half your winnings to get the lump sum, and you successfully navigated through the sales pitches from your family and friends, now the question is what to do with the money that is sensible. One thing that is important is to have a sense of humility. Understand that no matter what business you try to start, there is going to be competition in that area that has a lot more experience than you do. Three favorites of people who get money quickly are restaurants, bars clubs, and real estate. The reason is that many people think they are easy and straightforward businesses to run, but all three can be traps for novices. Restaurants and bars have enormously high failure rates, and that is with people who had previous experience running them.
One last piece of advice, and this goes back to experience and yearly payments. Try to avoid making investments that have liabilities that would stretch for more than one yearly payment. Treat each year as a separate chance to make a new investment or start over and don´t throw more money at projects that have failed significantly. As was said earlier, if you do things correctly, no matter how bad something fails the first year, you have nineteen more opportunities to learn from that failure as long as you didn´t take the lump sum payout and you didn´t allow one investment to carry liabilities into other years.
