Saturday, July 21, 2007

Son of a Son of a Gambler to be Released September 22, 2007

Son of a Son of a Gambler to be Released September 22, 2007

Son of a Son of a Gambler: Winners, Losers and What to Do When You Win the Lottery

Published by RRP International. Expected release: September 22, 2007.

In his second book, Don McNay reflects on the worlds of gambling, addiction, celebrities and business. He also shows us life through the prism of his childhood as the son of a professional gambler.

McNay's offers clarity and solutions to complex problems. Along with his observations and insights, McNay offers financial suggestions to lottery winners and people from all walks of life.

Don's father was a friend to many of Cincinnati's rich and famous. Here, Don shares information gleaned from those relationships as well as his own interactions with celebrities like Al Gore, John Edwards and the Scissor Sisters.

McNay is an award-winning syndicated columnist. For over 25 years, he has also been one of the world's best known structured settlement consultants and financial consultants for injury victims.

His first book, The Unbridled World of Ernie Fletcher, was published last year and was one of the best-selling local interest books in Kentucky.

Blood Money and the Pizza Hut Waitress

Blood Money and the Pizza Hut Waitress

"I don't feel like dancing."

-Scissor Sisters (song written by "Babydaddy", "Jake Spears" and Sir Elton John)

National headlines came out of Aurora, Indiana, when a Pizza Hut waitress received a $10,000 "tip" by one of her regular customers.

Buried in the story was an important fact: "Becky", the woman who left the tip, had just received an injury settlement. Becky's husband and oldest daughter had been killed in an accident.

"Becky" didn't win the money in a lottery. She received it as compensation for a terrible loss.

The media spin has been to pat "Becky" on the back for her generosity. The feel-good story is that the Pizza Hut waitress's life will be better because of the "tip".

The person I worry about is "Becky." Injury settlements are awarded for one reason: to help the loved ones of the people who were killed.

The injury settlement was calculated to take care of Becky and her children. The Pizza Hut waitress was not factored in. No one in the waitress's family died.

The waitress's "tip" did not come from an emotionally stable business person, like Warren Buffet or Bill Gates. It came from someone going through a personal hell.

I don't know anything about "Becky" or her settlement. I don't know how much money she and her children received. I don't know if her lawyers helped her set up structured settlements or if she has good financial advisors.

I do know that roughly 90% of people who receive an injury settlement or large lump sum will run through it in five years or less. I pray that "Becky" is not one of them.

Giving $10,000 to a semi-stranger is not evidence of sound thinking or long-term financial planning. It shows signs of a hurting person who perceived that her settlement was "blood money".

When people receive a lump sum, they think it will last forever. Look at the history of most lottery winners. People think it is incredible that a guy like Jack Whitaker can run through millions of dollars from a Powerball jackpot, yet the same feat has been accomplished many times over.

Jack gave his tips to strippers instead of Pizza Hut waitresses, but the bottom line is the same: both Becky and Jack would have been better off keeping the money for themselves.

Going back to Bill Gates and Warren Buffet, both of those two committed to giving away the fortunes that they accumulated through business success.

Instead of giving the money to a waitress with no strings attached, Bill and Warren gave their money to a foundation.

The foundation has goals and objectives. It also has rigid criteria as to who receives the money.

Bill and Warren are smart businessmen. They did not waste money once they earned it, and they are making sure it is not wasted as they give it away.

When my mother and sister died, I set up a college scholarship fund in their names. Both my mother and sister were single parents, and the scholarship's focus is on helping other single parents like them.

The scholarship will be helping someone for years after I am gone. It has professional administrators and investment advisors.

Since we don't know Becky's real name, we won't ever find out the final story. We won't know if the money she received from her settlement will allow her and her children to have a better life. We won't know if somewhere down the road, Becky will have frittered away her family's money and be broke.

We also don't know if the "feel-good" publicity from the $10,000 tip will cause Becky to do the same for another waitress, a gas station attendant or all kinds of people with hard-luck stories.

If I die in an accident, I don't want my family to give their settlement money to a waitress. I want them to spend the money on themselves. I have a suspicion that Becky's deceased husband would feel that way too.

Although many media outlets want us to jump up and cheer for "Becky", I don't feel like dancing.

ABC News Story about "Becky" and the Pizza Hut Waitress

Story Behind the Song

"I Don't Feel Like Dancing"

As any regular reader knows, I have an undying love for the Scissor Sisters. I knew "Babydaddy" in the days when he was Scott Hoffman and Scott's parents are dear friends of mine.

I've had dinner with several group members, seen them in concert, buy all their stuff and will have a chapter about them in my upcoming book, Son of a Son of a Gambler.

Thus, it was natural that I use them in a column again.

I've used I Don't Feel Like Dancing before. I make it a rule not to use the same lyrics twice but since the Scissor Sisters are about breaking the rules, I will make an exception in their case.

I love the video to the Dancing song, which was a number one hit in England. I hope the group comes back to the United States but they are so hot around the world that we probably won't see them here soon.

I've written several columns about the group but my first, Babydaddy's Daddy, from August 2004 is one that I am particularly proud of.

Babydaddy's Daddy

The video for I Don't Feel Like Dancing is incredible. Check it out. You can see Sir Elton John's influence. He wrote the song along with "Babydaddy" and "Jake".

The Poll

The following are the results from my last poll:

Do you favor allowing people to legally bet on sporting events?

94.4% Yes
5.6% No

If you had to bring on form of gambling to a state, would you favor...

Sports Betting - 65%
Casinos - 25%
Lottery - 10%

This week there are two poll questions:

1. If you receive an injury settlement, would you give part of it to a stranger?

2. What will you do with your money when you die? Will you leave it for your family, give to a charity, leave to a stranger, a combination of one and two, or a combination of one, two and three?

To vote in this week's poll follow the link below. The poll will be on the left hand side of the web page.

Don McNay is the author of the upcoming book: Son of a Son of a Gambler: Life's Winners and Losers and What to Do When You Win the Lottery. You can write to him at or read other things he has written at His award-winning column is syndicated throughout over 200 publications.

Economic Incentives for States to Attract Businesses

Don McNay on Money

Economic Incentives for States to Attract Businesses

I did my Master's thesis at Vanderbilt on the role of the Kentucky Governor in Economic Development. I've followed the issue avidly since then.

Kentucky has had a lot of media attention about the use of tax incentives. The New York Times did a recent story about the UPS operation in Kentucky and the Lexington Herald Leader did an excellent series on the topic of incentives last year.

Incentives have become an issue in this year's Governor's race as Peabody Coal, may or may not bring some kind of plant to Kentucky. It may or may not have hundreds or thousands of jobs.

There are a lot of factors in attracting business that are beyond a Governor's control. The national and world economies are the major driving forces and no state Governor can start or stop a recession. Also there are practical factors. Yacht builders are not going to locate in Nebraska, no matter how hard the Governor of Nebraska tries and there are several factors that play into where a company locates.

States often give away too much to lure a new prospect and neglect businesses already in their states.

It's a little like courting. During the beginning process, you need to show interest, like buying flowers, but buying a potential date a new car and house is a dumb use of resources. You save the car and house for when you are married.

A big question for states to ask is does one business bring in other new businesses with it? Kentucky hit the jackpot attracting Toyota in 1985. Toyota brought in a ton of suppliers and other jobs. It also brought in lifestyle changes and changed the dynamic of Central Kentucky.

Kentucky was either smart or lucky to have a bet on a company that would become the largest car company in the world.

They could have very easily spent the same incentive money on a Saturn plant like Tennessee or the now Volkswagen plant that Pennsylvania had. There is little chance that Toyota will pull out of Georgetown like Chrysler did to Kenosha, Wisconsin.

UPS was a smart bet for Louisville. It brought highly paid, mostly manual labor, jobs to an urban area that has a job pool to fill them. People drive from other parts of Kentucky (and from Indiana) to work at UPS but you need a major airport if you are going to attract a UPS (or a Delta) to an area.

A side benefit of UPS is spin-off jobs. Many years ago, I read an article in the Wall Street Journal about how a number of supplier companies located as close as possible to the Memphis airport so they had easy access to Federal Express. I started using one of them, PC Zone, for computer supplies as you could order as late as 11 p.m. and have it in your office by ten the next morning. If I ordered from another supplier, it would take a second day and I often needed a part to keep my business going.

I've seen a lot of companies locate in Kentucky with a similar philosophy to PC Zone. One of the reasons Amazon has big warehouses in Kentucky is proximity to UPS. It's not unusual for me to order something from Amazon via standard shipping and have it show up the next day.

All of this also plays into the series that CNBC did last week as to which states are most business friendly. Kentucky tied with Montana for 34. Virginia was number one and hard to argue with; a central location, great public universities, a diverse economy and the Internet capital of the world. Kentucky has the central location and none of the others. It scored high on transportation and little else.

I don't know if a Kentucky can ever catch a Virginia. However, they need to play to their strengths, like transportation, and focus on some simple solutions for existing businesses. The push for statewide broadband access, which is supposed to be here but is not, would allow Kentucky's current businesses to improve communications and their online capabilities.

Putting more money into communications would be a smarter bet than throwing money at big companies. I hope the leaders of Kentucky figure that out.