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FYI: I will be taking next week off as I’m heading on vacation.

On today’s newsletter:

• Changing your mindset about House Money

• Time is your friend, for better or worse.

Let’s get to it!

We’re getting metaphorical this week, readers.

You’re driving home from your crappy job in your beat-up Corolla when you hear the Powerball jackpot is over $1 Billion on the radio. “Might as well play,” you think to yourself, it’s not like anything else is going for you lately.

The lottery numbers are drawn, and you’re not a winner. Shocker. But you’re not a loser either. After closer inspection, you won $10k! Let’s go!

What do you do with it? Do you spend it? It’s not like it was your money to begin with. Maybe you should save it. What’s the difference? You weren’t even expecting this money anyways. Hm.

I’ll give my take: It’s never house money. Ever.

However you received your cash windfall, it’s yours – or is it? The house usually wins, doesn’t it? And if you win, the house still wins. How? Because the House gets you to “reinvest” those winnings back in the game! The House knows you; it understands how you think, your greed, and desire for more.

Welcome to the Casino of Life.

Who is the House? They can be whoever you want. A real Casino. The Stock Market.

Come play – it’s addictive.

Can you ever stick it to the “House” though? Yes. By accepting that it’s never house money.

A Risk Game

Ah, “house money”. A true dilemma. So much of a dilemma in fact is that I found an Investopedia page on it House Money Effect: Meaning, Examples and FAQs (investopedia.com), where investors take their investment gains and invest it with a much higher risk tolerance than they would have with money that they have acquired in regular ways, such as a paycheck. It’s exactly like what we’re talking about here, but a tad different context.

Life sometimes provides use with fortunate financial windfalls. I can’t find the exact source, but the inspiration for the rant was that I heard on a news story that it takes less than 10 months from people receiving an inheritance to buy a new cal. I thought this was mighty interesting, seems these recipients think they’re playing with OPM. (other people’s money)

Yes, it’s all about how you look at it. It’s either yours, or it’s not. Really not any more complicated than that.

Stick it to the Man

So, sticking it to the “man” or “house” is simple as overcoming the fact that it’s your money. Why do people treat it like it’s not then? I have some ideas….

• Survivor’s guilt

  • Regardless of if you inherited money, won it, etc, you put in no work for this gift or prize, and it doesn’t sit right with some folks. It’s hard to receive cash in exchange for someone’s presence, as it wasn’t yours.

    • A solution: Time. Whoever bequeathed you anything obviously cared enough to leave you something and trusted you enough to take care of it with good judgement.

• Opportunity cost

  • Time for some mental math. Let’s pull up an imaginary scale and “weigh” our choices. Due to reasons mentioned right above, opportunity cost may be blurred. Nothing seems more important in the moment than one option than the other, which leads to my next point.

• Time

  • Recent events are fresh, decisions are brash. Can’t fault anyone here thinking this. If you can’t figure out what to do with your windfall, best do nothing until you can figure that out.

The Casino of Life is tempting us to come play financially and make choices that seem right in the moment, but after some time and a step back, the opportunities a windfall have given us may become clearer. It’s also your money. Do what you want.

I’m trying to get you to Stay Frosty, that’s all.

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Stay Frosty My Friends,

Andrew

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