Wish you Could Win the Lottery?

December 10, 2018
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My Dad always said “Make reversible decisions quickly and make irreversible decisions slowly.” That advice has saved me countless times in my life.

Over the past few years, the lottery has had several large jackpots, many of them ranking in the top 10 highest jackpots of all time. These large jackpots allow people to dream; to think about the “what ifs” in life.

  • What if I just buy 1 ticket?
  • What if I go in with a group to buy a bunch of tickets?
  • What if I/we win?
  • What if money were no object and I could be or do whatever I want?

It’s that final question that gets people to start dreaming. It makes them take risks they wouldn’t otherwise take. They start to think about what life would be like without debt, a dead-end job, or without limited options:

  • Want that new car - buy it!
  • Want to take your dream vacation – do it!
  • Want to tell your boss to “take this job and shove it” – go for it!

The truth is, even if you do play the lottery, odds are, you won’t win. Likely, you will have some fun and excitement waiting for the numbers to be drawn but, ultimately, you will be disappointed when your life remains the same. You still must work at the same old job and the new car and dream vacation are still out of reach.

What if that didn’t have to be the end of the story? What if you could start dreaming and some day you could make your dreams a reality? The truth is you are far more likely to achieve your financial goals with good financial planning than by being lucky enough to win the lottery. There are people who buy new cars, take their dream vacations, and retire early every day. It’s not because they won the lottery, but because they eliminated debt, regularly saved, invested, and planned.

Are you tired of dreaming and ready to make your dreams a reality? Good, take these first steps toward achieving the things that you have always dreamed of:

  1. Eliminate debt – No matter what people say; no debt is good debt. It holds you back and obligates you to regular payments until the debt is gone. Pay off as much debt as you can as quickly as you can. Your future self will thank you for it.
  2. Avoid new debt – You got yourself out of debt, why would you go back down that rabbit hole? Debt just weighs down your dreams so don’t add new debt if you can avoid it.
  3. Start an emergency fund – the best way to avoid debt is to have a cash reserve to tap into when you need it. When you need a new roof, or your car breaks down, you will have the money to repair or replace it without going into debt again.
  4. Save for the future – contribute to your retirement account at work, start a savings account to finance your dream vacation or your dream car, save up to start your own business. If you save for the future, the money will be there when you need it.
  5. Invest – if you have ever heard of inflation, you know that the cost of goods and services is constantly going up. Saving cold hard cash in your mattress, a safe, or a hole in the back yard might seem like a good idea (if you don’t invest in the stock market you can’t lose, right) but, annual inflation rates have averaged 3% over the last 20 years, so holding onto that cash is like investing in a stock that is guaranteed to go down every year. Not a good investment.
  6. Plan for the future – think about the things you want to do or buy. If you know what you want, you can plan and save for it. Want to retire early? You can make a plan to save and invest enough to make that a reality. Want to pay for college for your kids/grandkids? Plan to invest in a college savings account with tax benefits for you and growth opportunities for the funds. It doesn’t matter what your plans are, all that matters is that you think about what you want and make a plan to do it.

Personally, I would never play the lottery, it is too risky for me. I am a risk taker though and I like to dream big. As an investment advisor for that past 30 years, I have learned that a little discipline and good investment plan is worth far more than a lottery ticket and the chances of “winning” are much greater.

Want to make a plan to work toward your dreams? Contact our office and we would be happy to start planning with you.

  

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.