Oprah had people on today who talked about going from rags to riches then back to rags again and regaing their sanity back to normallacy, well almost.
First up was Nadine Purdy who by fortune events, ended up being successful with her own boutique.
However, she had no money sense and spent every dime that came in on material things, dinner parties for large crowds,
eating out all the time, and hanging out and keeping up with all the beautiful people.
Eventually, her lifestyle included a $600. a day cocaine habit, then heroine, she lost her 5000 square foot condo (bought with cash), her husband and her children.
She lived on the street until entering rehab and has been clean for 5 years.
She has picked herself up and has gone into business with her sister opening up a few more boutiques under the name "Purdy Girls".
Nadine has altered her life to live more simply citing that materialism does not make you happy but who you are on the inside is more valuable.
She says that she should have learned how to handle money differently back then but can apply her experience now so that she does not make the same mistakes
twice.
Another lady, with $10, went to the store to buy milk but decided to buy lottery tickets instead.
She called the number to find out what the winning numbers were and could not believe she had the winning ticket.
She was screaming so all her neighbors knew right away that she hit the $15.5 million jackpot.
She and her husband quit their jobs because for 20 years, they get $487 thousand dollars a year after taxes.
They bought everything and of course, friends and family came calling and begging.
She had a hard time saying NO and ended up with money headaches.
She wishes she had handled it differently. Her first mistake was telling everyone she won.
None of the people she handed money to are her friends today.
They ended up moving away where no one knew them to avoid similiar experiences.
Most of the money they got is gone. They saved some but she says, not enough.
The lottery checks stop in 4 1/2 years.
Mention was made of a guy named Bud who won millions, spent it all in a short time, and died broke.
Another broke bloke was MC Hammer who was worth millions but spent it all without a real plan.
Lynette Khalfani was the expert financial advisor guest.
Another gal got a settlement of 1.3 million dollars from her late father's lawsuit.
She already squandered over a quarter of a million dollars, which is what she already received, more money is too come.
Lynette's advice to receiving a windfall from a raise or bonus, tax return, inheritance, or lottery winnings was the following:
1. Make firm decisions and establish boundaries -- decide who you are going to help and a plan. Learn how to say NO. STick to your plan. Do not let others financially abuse you.
2. Pay off debt.
3. If you receive more than $50 grand, get some financial help to plan investments, have a system for requests, give and plan responsibly.
This is my opinion -- if you get lots of money, don't spend it right away, put it in a CD for six months or a year THEN think about how you will eventually spend it OR if you wish to continue to
just save it.
Lynette also said that more than 70% of Americans have no financial education and can not make good decisions for themselves.
A budget is a plan of action -- don't be impulsive, make decisions on purchases/spending/charity carefully and thoughtfully.
A budget is a long term way of keeping more of your money rather than it disappearing fast before you know it.
The Social Experiment -- ShowTime's: "Reversal of Fortune"
A film maker went out and followed a homeless person about for a set time.
The homeless person was tested medically, psychologically, and for drugs before filming.
Ted had been in prison and released. He had lived on the streets for 20 years, no job, just collects bottles for cash. On a good day, he would make $20.00 He slept under a bridge on the ground, and had a cigarette and beer for breakfast.
On July 5, 2005, while going through a dumpster, he found an attache case filled with a hundred grand.
The experiment was, would this money help someone or would it solve or create more problems.
Ted's first thought was to get a Harley.
He stated he wanted an apartment and job.
He checked into a hotel and took a shower (last one was three months previously) and called a few people to tell them the news.
He bought a $35,000 truck and then bought a car for another guy he saw regularly at the recycle station.
Half his money is gone.
He gets a credit card.
He travels to visit family and upon request (or demand) he is generous and hands over money to them.
He now has more friends because they know he has money and are using him for it.
Ted thinks he has a bottomless pit of money.
The film maker says Ted was given therapy and financial advice and a job. It was Ted's free will that would determine his success or failure for this social experiment.
Ted also acquired a wife. When the money ran out, so did she although they are still married but not living together.
Today, he is still homeless and says he owes more than he did before he got the money.
He has no plan for his future.
He cannot erase the problems the money brought on, he says he feels worse now for being too generous. He also said, that none of those people he helped are around him since he has no money now yet they never helped him out when he was down and out.
The film maker said that habits may be hard to break and that there are other problems (drugs or alchohol, etc) some people may have that prevent them from living normally.
My synopsis:
In the case of the first and second women, the fact that they could not say NO and felt they had to please other people, keep up with the Jonese, before they took care of themselves, clearly shows
that they had low self-esteem, poor self-image and lack of self confidence.
Ted, on the other hand, his lifestyle was a habit complicated by other personal issues so he could not function normally.
Money is the root of all evil -- Money can create more problems than it can solve.
Yes, if not used wisely and used impulsively, or to influence others to thinking you are a nice and good person.
You can always be nice and good if you don't have money to flash around.
People first, money second, and things last as Suze Ormand always says.
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