“I’m thinking about switching to Lotto 6/49,” says my girlfriend midway through a phone conversation, “I don’t think my current strategy is working very well.”
I respond by telling her what personal finance author Dave Ramsey thinks of the lottery: It’s simply a tax on the poor and on people who can’t do math. Rich people and smart people would be in the line if the lottery were a real wealth-building tool.
This doesn’t faze her since she’s been playing the lottery for years and thinks her numbers have to come up sooner or later. When they do she thinks she can wipe away her consumer debt and financial worries. She’s relying on this and her government pension to carry her through the years.
Of course, counting on the lottery is ridiculous, and assuming the government will take care of everything is irresponsible, but how many of us leave our financial fate in the hands of others? While it might not be the lottery or the government, a lot of us look to something or some one else to take care of our money and make us rich.
A few weeks ago I joined Allison Griffiths, author of the recently released , for a panel discussion on women and finance. In our introduction we both shared stories of relying on someone else to take care of our money (her with advisers, and me with a partner) and the disaster and heartache that followed.
“We were easily convinced that investing was a job best left to others. And leave it to others we did – three others, in fact, before we finally learned our lesson,” Ms. Griffiths says. They lost $30,000 with their second adviser because they failed to ask some , and instead just believed that a trained adviser would know what to do, would diversify, and would protect her family’s money. Her new book outlines the steps she took to confidently take control of her money, and offers sound advice on why each of us should ultimately be counting on ourselves when it comes to managing our money.
I have been fortunate to find an adviser I work well with and trust, but years ago I did fall into the trap of believing my partner would just take care of it, and left every financial decision to him. The money myth that investing is hard, and that balancing a spending plan is time-consuming, led me to leave all matters of investing and money management in his hands. After separating, it was clear that I had no idea what was happening with our money.
Many of us have a personal story, or one involving a friend, or a friend of a friend, who was left financially devastated due to ignorance. If you’re not managing your money, who is? Working with an adviser or putting one member of the family in charge of your finances can be extremely efficient and beneficial, as long as you’re in the know.
But blindly leaving your money in the hands of someone else could cause you to become a cautionary tale. Re-evaluate your strategy, if you’re not the one doing the work, to be clearly and confidently in the know, protected, and on the right track to building real wealth.