The Scoop Blog on the Dallas Morning News ran a story summarizing Mark Cuban’s tips for the winner(s) of the now unicorn status Powerball jackpot. In all it was really great wisdom for the person (or people) that will share the task of living life past that winning ticket day. For the words that follow let’s assume one person wins and being wealthy is something they never experienced before. Thus, here are three challenges to overcome even if they are lucky enough to read Mark Cuban’s advice:
#1 — Failure Leaves Clues
The first challenge will be the concept that your winnings are not a bottomless pool of money that will last until you die no matter what you do with it and on top of that, only good things will happen now that you have tons of cash. Assuming you ignore Mark’s tip of not taking the lump sum what are you left with in your bank account at the end of the tax year? Well, depending on what state you live in it could drift below the $400M markassuming the $1.4B jackpot number. The first hard reality you will need to face is that people will call you a billionaire even though you are not even half way there anymore. “So what?,” you might say, well with that level of wealth comes possible personal and family security issues — so, in addition to hiring a tax attorney you may need to deal with all forms of harassment the likes of which you never could even imagine previously being the first unicorn lottery winner.
As Tony Robbins says, “Success leaves clues.” In other words, find success and model it to in turn become successful yourself. In this case you may wish to change the phrase around to “Failure leaves clues.” Spend most of your first year with your money figuring out what did not work for others and do your best to not repeat history. If divorce, the death of a daughter, robbery, drugs, etc, doesn’t sound like a plan for your fortune look up the story of Jack Whittaker’s $314,900,000 winning ticket. His is only one of many. Yes, there are people who have done well after winning huge amounts of money in the lottery but unfortunately they seem to be the outliers. Take your time to figure the road to success out after focusing on all of the problems you probably never thought possible before buying that winning ticket.
#2 — Expertise is Not Close By
Have children? Want to leave them with enough, however you define that, after you pass away? Welcome to estate taxes. Want to give away money to friends, family or other people in need? Welcome to gift taxes. Want to give away money to charitable organizations? Welcome to limits on tax deductions.
Think you can give like Mark Zuckerberg or Bill Gates? There is a huge difference in giving away stock with practically no basis of cost to you versus giving away hard cash you already paid tax on. Mark Cuban raised a lot of feathers advising people to say “no” to family and friends. In reading the comment on the blog his first emphasis seems to be on tax considerations however the larger issue is understanding when giving can produce bad results. Read the The Millionaire Next Door and learn a little bit about what the possible downsides to giving are. Ignore the chaos of the winning moment and realize the first thing the money should buy you is free time to figure all of this out!
Besides your own research who will help you sort this all out? The temptation of human nature, for the most part, seems to be reaching out to whatever is closest. Need help with tax advice and have someone you are already working with, or a friend or family member in the business, or knows someone, or knows someone who knows someone? Don’t do it. Going to take that big check to your current bank? If they are of any reasonable size they probably will have huge smiles on their faces introducing you to their private client group. Go somewhere else. Expertise is not close by, it is not cheap, it is not something you can completely delegate away — but the good news, especially in today’s interconnected world, it is easily found. Heck, reach out to Mark Cuban himself and get a reference of where to go. If you now have $400M in the bank you can make that happen. Speaking of banks — even if you take Mark’s wise advice on not making investments you still need to figure out where you are going to put all of that cash. Don’t want to speak to Mark — then join an organization like TIGER 21. As stated on their website:
TIGER 21 is North America’s premier peer-to-peer learning network for high net worth investors. TIGER 21 Members collectively manage approximately $35 billion in investable assets. Members are entrepreneurs, CEOs, inventors and top executives with backgrounds in financial services, real estate, industrial and consumer goods, legal services, entertainment and medicine.
Yes, it might state that it is a network for high net worth investors, but if you become a part of that group with the simple, and open, goals of not losing all your money, fucking up your life, and that of your family, you will be helped in ways beyond all of your imagination — even it is just investing your cash in “cash”. Also, don’t worry about the entrepreneurs, CEOs, inventors and top executives thing — lottery winners is not a big enough demographic for them to target and you would be more than welcome.
#3 — Your Friends and Family Will Change
It’s true. You life is now upside-down and no matter if you take Mark’s advice, or not — become wonderfully fulfilled by your winnings, or wish you never purchased the ticket, the bottom line truth will become that your friends and family will change. You will discover why people are around you. You will find some people are there because they took pleasure in being better than you, however they wished to define that, and now that you have more money than they do they will not be able to handle it. Some enjoy things exactly as they are, and when and if, you decide to change your life they will not be able to handle it. Some will make that ask that Mark mentioned in his tips and the trouble here is whether you take his advice and say no, or ignore his advice, and say yes, more than likely either road will lead to regret and second thoughts.
Change is going to happen. The change you want is to sleep better at night, make your family stronger, and help make the world a better place. The trick is the path required to make this happen is not obvious and not without pain. As Mark said, “If you weren’t happy yesterday you won’t be happy tomorrow. It’s money. It’s not happiness.” Use the money to find the roads to happiness and not as a shortcut to the things you believed in the past were missing in your life.
“A lot of people get so hung up on what they can’t have that they don’t think for a second about whether they really want it.”
― Lionel Shriver, Checker and the Derailleurs
If you happen to be the winner and actually read this I will leave you with one last word on the topic of advice. Advice is a strange animal. Many people ask for it, but for some odd reason few actually take it. I believe the answer may be in the possible fact that they are not really looking for advice. They are, instead, looking for confirmation that the path they already know is wrong, yet is far more comfortable, is the right one to take. Thus, if someone gives them ‘good’ advice that goes against the road of comfort they do not even hear it in their brain but, if someone supports their road of comfort they become best friends forever — ask yourself how that worked out for Michael Jackson? You don’t need ‘yes men’. You need to find a peer group, like TIGER 21 or something else, that will give you advice because they have been there before, they made mistakes, they somehow made it through, they care, and they get absolutely no reward from helping you other than the warmth of saving someone from a greater pain they may have already experienced. Good luck and Godspeed…
(Originally posted on Medium)