IF YOU WIN THE JACKPOT

BEYOND THE LOTTERY JACKPOT

Part 1

Why is it that most jackpot winners end up poor or poorer than before?

Figure 1http://www.safaricom.co.ke/bonyeza_ushinde/

A day will not end without promotional lottery games in our TV screens, radio stations and billboards. We are always told these companies and organizations made some millionaires after their grand draw, but we don’t see these names in the list of millionaires after some time. How a company decides to make millionaires instead of investing in development of their businesses is a story for another day.

My concern is, after winning these millions, what happens to the winners?

Majority of Kenyans believe these promotions and lotteries as a bridge to cross the river of poverty to riches. Apart from companies giving back to customers, the lottery promotions are money-minting platforms that ride on the get-rich mentality of many consumers.  . Nowadays, most product promotions put a code on the product, with the consumer required to send to a short code to stand a chance to win fabulous gifts. Mostly these short codes charge a premium above normal telecom rate of sending that message thus the promoting company makes money on promotion of its own product. One begs to question why a customer is paying for promotion that should be an expense to the business.

A winner will be announced and requested to pose with a big model cheque, car, house, plot or the grand prize item for cameras from major media houses. After the pictures, songs and dance, then a few questions are asked on how the winner will spend the fortune. The way of spending normally falls in three basic categories: buying land or house, paying school fee(read just upkeep) and starting a business.

It is also important to get acquainted with the promoters or the company’s top officials who are normally there. This can be the starting point of your business or career as you may become a distributor, supplier or an employee in future depending on your preference.

Later the instant millionaires start living their dream. Starting by changing the way you lived before the win will not be that important in your life. Any amount of money that is not working for you will end up in the drain and you may end up poorer or injured physically, spiritually or morally. We have heard stories of men getting second wives after winning or being picked by call girls who end up draining the cash in them or in bar urinal!

If you win any prize money, the first and most important thing is to cool off and get back to reality. Put that money in a fixed deposit account or buy a liquid asset with fixed returns for a fixed period like treasury bills or bonds. Note this is to give you time to cool while looking for the best investment. However, if you have any debit like loan in the business or from asset purchase loan like house or land pay it out or reduce it. Remember the prize money should improve your life. If the prize is an asset like car and you doesn’t need it convert to money and follow the same steps above.

In addition, the cooling off period can be spent learning a skill, seeking advice, thanking providence for the fortune and tithing or donating to needy persons. After all the hype and many ideas you can now move on to your options to improve your business if you already have one running. Investing should be done in phases as you improve your skills in investing and managing wealth.