Oprah TV show discusses Windfalls and their Pitfalls

Oprah TV show discusses Windfalls and their Pitfalls

The Money Coach's Guide to Your First Million by Lynnette Khalfani

Windfalls can be a wonderful financial break. Oprah discussed with a number of guests how coming into a large sum of money has changed their life. It was a surprising show to see how people handle their money, and how it can cause unwanted stress and problems in their lives.

Oprah’s first guest was a lady that struck it rich in business. She moved to New York and in 2 months time made $60,000. She opened her own shop and in the first year sold 1.2 million at her boutique. Her and her husband lived large. She estimates that she would spend $1,000 a week on eating out at restaurants. She would travel to London and Paris 4 times a year. In this time, she didn’t have a savings account. She instead chose to use drugs because she felt like she wasn’t fitting in with the wealthy. Her drug habit cost her around $600 per day. She estimated that she spent $250,000 in drugs in a year’s time.

Because of her drug use, she lost her husband and her children. The couple got a divorce and she was broke and became homeless. It took some time being homeless before she got off of drugs. She did turn her situation around. She has an apartment and she has custody of her children again. She learned that materialistic things won’t ever satisfy the spirit. She feels that the American Dream of wealth lead her to a bad place. She is happier now, even though she is not rich. She said that sure, it would be nice to have the extra money, but the time she spends with her kids is more valuable.

Oprah discusses how a lottery winner that won $16 million dollars went broke only after a few years of winning all of this money. He died living off of social security payments. Rapper, MC Hammer, at the moment of his fame soon followed with being $13 million dollars in debt. Today MC Hammer is an ordained minister.

Another lottery winner went to the store to buy milk. She took $10 worth of rolled quarters and instead of buying milk she bought lottery tickets. She won $15.5 million dollars that is paid out annually. This lucky winner visited with Oprah and said that it wasn’t as great as she had hoped. The reason is that she had to move to another place because friends and family kept asking for money. She estimates that she gave away around $1 million dollars over the years. Her family no longer talks to her. She said she really wishes that she would have never gone public with her winnings. She might still have her family and friends if they didn’t know that she had won all that money. She also regrets that she hasn’t saved more money for retirement.

Lynnette Khalfani who is the author of the book, The Money Coach's Guide to Your First Million, shared with Oprah some of the ways to manage your money and keep your money. Khalfani suggests that how well you can hang on to the wealth depends on those around you. You need to set limits and boundaries on how much money you will give to family, friends and relatives. Stick to a budget and don’t feel that you have to spend the money. Think long term goals, such as paying taxes, and saving for retirement.

Khalfani says that if you come into a Christmas bonus or a tax refund, first pay of credit card or other debts you might owe. If you don’t have debt, then she says to save the money. Whatever you do she says you shouldn’t spend it.

If you come into a larger sum of money you should strongly consider consulting with a financial advisor. These professional financial planners can give advice on how to handle your money. She says that they can help diversify your investments to insure that you will have retirement income in the future. Make sure you have a budget, no matter what your income is, because you need to have a spending plan of action. Don’t make any brash moves to spend the money.

The last segment on Oprah was about a documentary that is airing on Showtime on Demand called “Reversal of Fortune.” This documentary was a social experiment to see if a homeless man was given $100,000 would he be able to change his life around. The homeless man said that he would collect cans for recycling and get on a good day around $20. He was happy in the sense that he didn’t have to answer to anyone and he could work when he wanted and take a break when he wanted to.

The day he was in a dumpster collecting cans, he found a suitcase full of money that was from the producers of the documentary. He was in shock. He stayed the night in a hotel room, but instead of sleeping on the bed, he slept on the floor. He thought that this money would repair any conflicts with his family in Sacramento. He bought a new car for a person at the recycling center. He gave money to his homeless friends. He bought a $35,000 new truck.

He traveled and started a new life in Sacramento. He got an apartment, and even got married. In the end he had spent all the money of the family and didn’t get a job. He got into debt and owed money, and his wife left him. He is back to were he started, a homeless man.

Of all of this the money can temporarily do a quick fix, but doesn’t get to the heart of the matter. Oprah showed us that if we have a large some of money comes into our life that it could cause more problems, instead of fixing them. We need to be thoughtful how we handle our money because no matter the amount, you could still spend all of it and not apply it correctly.



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