Lottery Winner Sues Son Over Bad Money Management?

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Partial Transcript

[The following is a partial transcript of this episode of The Scott Alan Turner Show. Listen to the full episode to hear this story, listener questions, money hacks, and inspiring stories of people that are changing their financial lives. Subscribe to the free podcast on iTunes or Google Play]

In This Episode / Listener Questions

  • Warning for everyone on what can go wrong when you do not do proper estate planning, and ignore risk while focusing only on returns.
  • How to get the product return you deserve and not deal with customer serviceIs it possible to invest cash and get a 10% return (Mark)
  • Reasons we are working on more side jobs to pay down debt (Colleen)
  • What’s your take on ethical investing (Doctor Crusher)
  • If my child grew up as a cartoonist, would I have failed as a parent (Harry)
  • Do I really need a financial advisor (Chewbacca, Colorado)
  • Tips on growing a small business (Brian)

Resources/links:

A 90-year-old Florida woman who took home $278 million from a winning Powerball ticket six years ago has sued her son and his financial advisers, claiming the money was put into poor investments while she was being charged $2 million in fees. So many lessons from this story coming up.

So let me just get this out of the way for the legal weasels down in Florida that would love to take a chunk out of Turner. Alleged this, alleged that, my opinion, my belief, not a lawyer, blah blah blah. Ok there’s the disclaimers. Just pretend everything I’m about to say started with one of those Cover Your Assets statements.

The lawsuit says

Prior to her good fortune, Gloria was living in a small, rented duplex … for $375 a month, “Her income was modest, fixed, and derived from her monthly Social Security and small widow’s pension.

The low-return investments in CDs and money market accounts cost her tens of millions of dollars that she could have earned with another investment strategy, the lawsuit said.

Listen to me – First – she gave half the winnings to her son. He said he would take care of her. That’s key. The mom gets half. The son gets half. Two half make a whole.

When the family of Gloria Mackenzie’s daughter informed her that the financial adviser, Hank Madden, had previously faced professional discipline, Scott Mackenzie, the son, threatened to disinherit them. Madden hosts a local radio call-in show offering financial advice.

Here’s your sign, listeners of The Scott Alan Turner show. If the mom has half. And the son has half. And there is a daughter and a daughter’s family. Where is her half? Where is her cut? Where is her fair share?

She got nothing. We don’t know why.

You see, I believe someone planted a bug in this old goat’s ear and told her she could have been making more money. Duh! She could have doubled it all if she let it ride on black at the roulette table in Vegas? Right?

But she didn’t need to!

Imagine this. You inherit a small, tidy sum of $100,000 from a long lost uncle. Your idea of a good time is playing golf. It’s not jumping out of airplanes, rock climbing, or moto cross. You’re not too risky.

Someone gives you advice that you should put it all in the stock market. Or in bitcoin. Or in invisible cloaking technology like Harry Potter wears.

Someone else says, you got $100,000, let’s not blow it. Let’s keep pace with inflation. We won’t make much, but we won’t lose any either.

And five years down the road you could have $110,000 if you play it safe. Or you could have $150,000 if you don’t. But you could also just as likely have $50,000. Lose half. Or more.

People always ask me what’s a good mix of investments? It’s like going to the buffet. How much chicken? How much potatoes and rice? How much desert? Should I try the fried crickets?

How much stocks? How much bonds? How much cash? Should I buy Apple stock? No, you probably already own it in your 401(k).

You think – Come on Turner, I’m never going to win the lottery. You’re right if you don’t play it. I’ve got 400 tickets for tonight’s drawing. If I don’t show up tomorrow, you’ll know why.

I’m looking out for you because I’ve ridden through the highs and the lows. People hate the lows. It’s a sinking feeling I do not wish upon anyone.

We had a listener a while back, who had a couple hundred thousand in cash for retirement. Good for her. It was in a savings account. Good for her. That made her feel secure. If that plan works and someone doesn’t run out of money before they run out of life, that’s a solid plan. Somebody else may not like it and think it’s silly, but it’s not their plan so who cares what they think.

“you could have invested in a cupcake shop and eaten cupcakes all day for free!” Well, that’s certainly a consideration. But it’s probably just cheaper to go buy cupcakes than drop $300,000 on some mixing equipment, flour, and sugar.

This lottery winner is getting bad advice. It’s all about greed. This family is ruined forever. All because of greed and money. Most of us will never have to worry about managing $280M.

You will have to worry about managing $2.8M. Or $280,000k. If you don’t believe that – $2M will pass through a McDonald’s workers hands over 40 years of work making minimum wage. How much more are you making than that?

You will need to figure out how much risk you are willing to take. This greedy person’s family is only thinking about returns. How much could we make? How much did we miss out on? Did they ever consider how much they could have lost? That’s probably more important, but very few people talk about it. I will never tell you what to think. I will show you how to think.

This daughter and her family, who by the sounds of it didn’t get half. I believe they planted the bug in mom’s ear. Mom, you’re getting ripped off. You could have had another $25M. Maybe. With more risk. She could have also lost $100M. With more risk. But she’s probably only thinking about what she didn’t get, not what she got to keep.

Playing the lottery is an absolute waste of money. Unless you win. Which you won’t. You have a greater chance of being the stand in on the set of the Avenger’s for Thor or Black Widow. Lottery winners are some of the most miserable people around and within 5 years most of them are back to being broke with nothing to show for it. Just like the 50% of NFL players that are bankrupt within 2 years of retiring from football.

Side note $2M for maintaining a bunch of CDs?

Quotes

Lottery Winner Sues Son Over Bad Money Management? Lottery Winner Sues Son Over Bad Money Management?

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