Time to Meet María 'La Lotería': 3 Common Financial Horror Stories
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Editor's Note: This article is an excerpt from the book "Take the Helm: Why Do the Rich Get Richer and You Still Don't Make Fortnight?" by Francisco García Pimentel and Salvador Manzano.
I know it sounds hard to believe, but having money is not the same as being rich. Last week we met Gerardo el Gerente : a man in search of a raise in salary who, somehow, always managed to live on the line, despite his increasing income.
Sometimes we are simply chasing something that we don't know how to handle. In those cases, money can become a real curse. Have you heard of María la Lotería?
Mary the Lottery
María is a single mother, very hardworking. He is 40 years old. She gets up early every day to feed her daughter Karina, takes her to school and goes to the plant where she works as a receptionist.
Life has not been easy for María, but in one way or another she has come out ahead
Since he was fifteen years old, religiously, every month he buys his lottery “vaquita”. They are just a few pesos and, although the probability of winning is very low ... there is always the hope that he can hit the fat man and now yes! Life is arranged.
Also, when he has change, he buys instant or “scratch” lotteries at the store. Although he almost never wins (and what he wins he spends on another ticket), hope does not die. Once he earned 500 pesos. And they made fun of her!
Of course Maria goes to the pawn shops when the going gets tough, and has bought her things in weekly payments. You know it's bad business, but what other option is there? This is how he paid for Karina's baptism and graduation. In two years it will be his XV, so it will be necessary to pawn something. This is how it is done and has always been done.
But good people sometimes get what they deserve.
María called her mother crying with emotion. I won the lottery! I won the lottery! Life would never be the same again.
- To learn more: Gerardo 'El Gerente', María 'La Lotería' and Mauro 'El Millennial': 3 common financial horror stories
Rain of blessings"
Maria had to share her prize with nine other winners and also pay taxes. But in the end he was left with 14 million pesos. That is more than you could ever have dreamed of in your life! Now she was literally a millionaire.
Maria did what had to be done. The first thing was to buy a house for his holy mother, who was in a better area than where she lived before, of course. It cost almost 2 million, plus the car and furniture. To be sure, her mom deserved it.
Then his own house, a little bigger (maybe he would remarry, who knows) and in a better area. He paid 3.5 million and also bought a car. Also another for Karinita's XV, who were already approaching.
The party was on high. More than 200 people! There was a live band, three main courses, a dessert table, and gifts for all the guests. It was in the largest room in the city, with waterfalls and lighted gardens. It was a real dream!
Sure, the guests were more than expected. After he received the award, he learned that he had uncles, cousins, brothers-in-law and godchildren whom he did not even know. But family is family. As a gift from XV, both she and her daughter went on a tour of Europe for a month and a half. He quit his job. After all, she was a millionaire.
He still had a few million dollars left; but if you took care of them they could last you a long time. Meanwhile, new investment and credit card proposals rained down on him. So that year he took his mom and daughter shopping to San Antonio. Then they went to Orlando to meet Mickey Mouse.
On her return, her uncle Felipe invited her to breakfast. I had a terrific business proposition for him: construction equipment rental. All Maria had to do was put up a part of the money -5 million- to set up the office and buy the tractors. And with that he would earn a much greater amount.
María didn't know much about tractors or investments, but she trusted her uncle Felipe, her mother's cousin. So she decided to become an entrepreneur. After all, she was a millionaire.
A year later, the company still had not started and the tractors were stopped. Uncle Felipe did not appear at all. Much less any profit ...
The house spent a lot on maintenance and the cars were already in need of service. But better to wait for them to decompose - they still held out a little longer. Their closets were crammed with new clothes and imported bags.
When Maria looked at her account, she realized that there were only 1.5 million of the initial 14 left. It was then that Uncle Felipe appeared. “We only need a million to get this going. Now it is the latest ”.
When the bank called the following month to collect her cards (she owed more than 300,000 pesos), María began to despair. He told Karina that they would have to sell a car. It was a gigantic fight, and Karina left home angry.
Now Maria had 100,000 pesos in the bank, two broken cars, a giant house, an angry daughter, a growing debt and a bankrupt business. And he had no job. Only two years had passed since he won the lottery.
When Maria returned to her company to ask for a job, her position no longer existed. After a couple of months, she found a space as a telephone consultant.
That first afternoon when he was leaving his new job, he stopped by the little store. “Can you sell me a scratch ticket? This one is going to be the good one… ”.
A history that repeats itself
The story of Mary is the story of many who live waiting for the external “great miracle” that will bring them out of poverty. Either they will "hit" a "super business", or they will "fall" an inheritance or they will "win" the Lottery.
This system is even worse than Gerardo's… and unfortunately it is one of the most widely used.
First, the obvious: the chances of winning the lottery or hitting the big deal are ridiculously tiny. The probability of winning something serious is one in five million, more or less depending on the lottery. It's stupid to bet anything at odds like that.
Have you ever wondered why most of the lotteries on the planet are state controlled? It is not uncommon to find this phrase in financial literature: The Lottery is the tax of the poor . It is selling a false hope to millions of people in exchange for a few pesos. It is a gigantic business for the state.
If from 15 to 40 years Maria had saved what she spent in the lottery - let's say 200 pesos a week - and invested in a simple instrument at 7% per year, now she would have more than 1.2 million pesos.
1.2 million is less than 14 million, you say. Yes. The difference is that the 1.2 million you will earn 100% sure, every time, always . If the millions of people who buy lottery every week saved what they spend on vaquitas, instead of having, say, 100 millionaires we would have MILLIONS of millionaires.
Well ... it's unlikely. But what if I earn it?
Okay: let's say you do indeed win the lottery. Welcome to the world where 88% of the world's lottery winners are equal to or worse within two years and 94% are bankrupt within five years. In other words, they not only spend ALL the money they earned, but they also use it to acquire more debt.
The same goes for inheritances. It is exactly the same. I know people - several - who wait for decades to receive something; who even take long and expensive lawsuits to receive their inheritance.
When the inheritance reaches them: 3, 5, 10 million ... they are back to zero - or worse - after a few years.
This same case, that of María la Lotería, is what has happened to thousands of athletes, actors or politicians. A young man from the neighborhood, without financial education, becomes a boxer or a soccer player. In a few years he amasses a fortune of millions of pesos or dollars ... but excessive expenses, no investment and bad friends end up returning the "millionaire" to the streets . That is why characters such as Nicholas Cage, Mike Tyson, Stephen Baldwin, Kim Basinger, Ana Torroja, Whitney Houston, Burt Reynolds, MC Hammer and even Michael Jackson himself ended up declaring bankruptcy after having lived years of success and excess. The list of footballers and boxers is just as long. They thought that the money would keep coming forever. But it was not like that.
That is why I am not saying that money is not good. It's excellent.
Nor do I say that the rich have no money. They have a lot of money.
What I'm saying is that getting more money doesn't automatically make you rich. As the classic financial saying goes: it's not how much you earn, but how much you save.
Because if you barely ride a wheel bike, what makes you think you can handle a racing motorcycle? It is important to earn money, but it is more important to know how to manage it. For this, personal growth and financial education are essential.
That is why I claim that money can be a curse. If you do not have a millionaire mentality yet, then you will only be a poor man with a lot of money. And a fool and his money ... very soon part.
Of course, we have to meet a third character: Mauro the Millennial . Which of them are you? I'll wait for you here next week to close this trilogy… of financial horror stories.