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

http://www.abcnews.go.com/GMA/story?id=3374034



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

http://www.donmcnay.com/content/view/266/9/

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".

http://www.youtube.com/watch?v=sXZ1tygRaVw



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.

http://www.donmcnay.com/



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 don@donmcnay.com or read other things he has written at www.donmcnay.com. 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.

Why is Sports Betting Off the Table?

Why is Sports Betting Off the Table?

"Every gambler knows the secret to surviving is knowing what to throw away and knowing what to keep."

-"The Gambler" by Kenny Rogers.

I regret that we did not have someone sing "The Gambler" at my father's funeral. Dad started working in a bookmaking operation when he was only 15 years old and gambled until the day he died. He was good at what he did.

During my father's era, almost all gambling took place behind closed doors. State lotteries did not exist, and casinos were only found in Las Vegas. The popular forms of gambling were sports betting, horse racing, and card games.

Bookmakers like Dad were small business entrepreneurs. Though they could not advertise or sue non-paying clients, they still made a good living. Gambling allowed my parents to move from an extremely poor neighborhood to a nice one. It put food on our family's table.

Although 48 states now allow some form of legalized gambling, only Nevada has legalized sports betting services. In most of America, lotteries, slot machines and casino games are still the only forms of gambling that are state-sanctioned. As someone who has been around gambling for most of their life, this trend is disturbing to me for a couple of reasons.

Lotteries and slot machines are terrible bets, and only large corporations can own a casino. Talented people can work for a casino, but there is no chance for those people to ever own one.

Instead of starting lotteries and attempting to lure big casinos, states should license small gambling operations like the one my father had.

For a while, sports betting dollars were flowing to online betting parlors based in other countries, but Congress, led by Senator Bill Frist, shut down that big loophole.

I was in favor of shutting down the online betting parlors. Government entities in the United States were not able to tax winnings or regulate them.

Betting parlors, regulated and taxed by individual states, would be successful.

Dad was able to make money in the days before ESPN and the explosion of televised sports. Millions of people now participate in college basketball office pools, and there are newer sports, like NASCAR, keeping bookmakers busy. Thousands of people bet with illegal bookmakers every week, and the states should be taxing that money to provide better schools and services.

Sports gambling is a fair bet. In a football game, one team is going to win and the other will lose. It is not a trillion-to-one bet like the lottery.

Furthermore, I don't like having a state's tax revenues tied to the few big corporations that own casinos. If the corporate executives were to commit stupid or illegal acts, like those who ran Enron did, then the state could be dragged down with them. Licensing a variety of smaller companies would give states a wider tax base.

As noted, 48 states already license and regulate some form of gambling. If they expand their regulatory reach to sports betting and allowed it to operate officially, innovators would have more leeway to create opportunities for wealth in their communities.

As a betting man, my proposal is a long shot. No one is pushing sports betting, while the casino and slot machine companies are spending huge amounts of money on lobbyists and political donations. Even though illegal bookmaking is widespread, colleges and professional teams would fight against the legalization of sports betting. Also, there are people who legitimately oppose gambling for moral or religious reasons.

I am opposed to the lottery because it exploits poor people.

The 37 states that have lotteries seem to ignore the fact that lotteries target their poorer citizens. Sports betting and poker rooms are better alternatives because they are fair to both the state and the gambler.

My Dad ran a fair and honest operation where people got paid on time and were cut off before they got too deep in the red. His career caused him to break the law, but he was one of the most honorable men I have ever known.

Dad detested gamblers that preyed on people who could not afford to lose and hated lottery games that targeted poorer people.

Before states rush off to embrace casinos and slot machines, they should allow small businesses to operate sports betting parlors and poker rooms.

As Kenny Rogers said, "The secret to surviving is knowing what to throw away and knowing what to keep." Sports betting is the ace that states should keep.

Story Behind the Song

The Gambler

Although my father was not a card player, "The Gambler" essentially became his theme song. I wish we had played it as his funeral but he had an old church, Catholic mass with a lot of songs from the middle ages. Kenny Rogers did not make the cut.

When my mother died, I went to great lengths to pick proper songs. We ended her mass with "When the Saints Go Marching In".

I taught a business seminar at Eastern Kentucky University in 1985 and 1986 and my star student quickly rose to a Vice President's level in a major corporation. He called and told me he had replaced Kenny Rogers as the entertainment for their next annual meeting with the Judds.

Later that year, the Judds split and had various personal problems. Wyonnna insulted some of their best clients. The Chairman of the company absolutely loved Kenny Rogers and it was a mess. My friend was soon climbing the ladder at another company.

As Kenny said, "You've got to know when to hold them and know when to fold them."

The Poll

The following are the results from my last poll:

Was Jeff Ruby correct in asking OJ Simpson to leave his restaurant?

76.7% said yes
23.3% said no

Do you agree with President Bush's decision to commute the prison sentence for Scooter Libby?

80.0% said no
20.0% said yes

This week there are two poll questions:

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

2. If you had to bring one form of gambling to a state, would you favor the lottery, casinos, or sports betting?

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

Weekly Poll

Don McNay is the author of the upcoming book Son of a Son of a Gambler. You can write to him at don@donmcnay.com or read other things he has written at www.donmcnay.com. His award-winning column is syndicated throughout over 200 publications.

Don McNay on Money

Don McNay on Money

Certified Senior Advisor (CSA) and Other Instant Financial Geniuses

The New York Times has a great story on financial planners who hold the Certified Senior Advisor designation and other easy to get financial designations.

For Elderly Investors, Instant Experts Abound

A cup cake designation like CSA can easily be confused with a real designation that is far more difficult to obtain, like a CFP, CPA or CLU.

I have an ax to grind so I ought to disclose my bias. I have two Master's degrees and four financial planning related designations. They came from good schools (Vanderbilt, Notre Dame and the American College) and were not particularly easy to get.

Thus, I get angry when I see planners acting like they have credentials when they obtained those credentials from programs as simple as the curriculum described in the New York Times.

The questions remind me of the old Cheech and Chong skit, "Lets Make a Dope Deal" that asks questions like, "Bob, What is your name?"
I understand why planners want designations. Education separates the peddlers from the professionals. However, clients want professional credentials because they want the education that goes along with those credentials.

Every full-time structured settlement consultant we have had at McNay Settlement Group has received their Certified Structured Settlement Consultant (CSSC) designation from Notre Dame. I took the program years ago and still utilize some of the things I learned in the class.

Early in my career another financial professional with no credentials was competing with me for a client. He said, "credentials aren't important." I responded that if you were going in for open heart surgery and the surgeon said he or she had not gone to medical school, would you let them cut on you? If you were on trial for murder and the person defending you had not gone to law school or passed a bar exam, would you let them defend you?

Particularly in the case of elderly investors, their life savings are often in the hands of advisors. If they lose what they spent their lives accumulating, they have no way of getting it back.

Those people deserve advisors with real credentials. Legislators and regulatory agencies need to look at banning the concept of "credentials the easy way."

Don McNay, CLU, ChFC, MSFS, CSSC

Jeff Ruby, Following His Gut Instincts

Jeff Ruby, Following His Gut Instincts

"Listen to your heart, there's nothing else you can do".

-Roxette

It's impossible to forget the first time I met Cincinnati restaurant owner Jeff Ruby. I was about 12 years old when my father took me to meet him at the Fort Mitchell (Kentucky) Holiday Inn, where Jeff was manager. As we pulled up to the hotel, we saw a man furiously running across the parking lot with Ruby chasing behind.

Jeff came in later to dine with us. The man had robbed the front desk, and Ruby had been trying to catch him. Dad asked Jeff if the man had had a gun. When Ruby said yes, Dad asked, "Jeff, what were you going to do if you had caught him?"

It was one of the few times in life that Jeff did not have a quick response.

The incident illustrates why Ruby has been successful. Jeff was about 23 years old and had just graduated from Cornell. He didn't own the hotel, and it wasn't his money. He put his life on the line chasing the robber.

There was no questioning Jeff's guts and determination. It was the same inner drive that would spur him a decade later to create some of the Cincinnati area's most successful restaurants.

Jeff and Dad were close, and I heard hundreds of times about how Jeff started his first restaurant, The Precinct. As Dad told it, Jeff was managing some Holiday Inns and had little money. In order to become an entrepreneur, he sold his car for $5,000 and showed the money to bank lenders as proof of savings. He lined up celebrity investors and started a fine dining restaurant on the wrong side of town.

It became the hottest restaurant in Cincinnati. It had first-rate food, and all the big stars went there. His next restaurant, the Waterfront, used the same formula, only in more dramatic fashion. Jeff now has several restaurants, and his empire is growing.

I have not seen Jeff since he served as a pallbearer at my father's funeral, but I have followed Jeff's career through the media. It is not hard to do. Jeff made national headlines in May when he threw O.J. Simpson out of his Louisville restaurant. As Angie Fenton noted in a Louisville Courier-Journal profile, Jeff has been making headlines for many years.

Jeff became a celebrity in his own right and lives the lifestyle to the hilt.

I was reading the Courier-Journal story at the same time that I was emailing with a friend.

My friend is at a fork in the road of life. She has the talent to make it big in her profession, but career success could mean sacrificing her family life and other interests.

It is a tough, life-changing decision. If she jumps off the career ladder, it will be tough to get back on. If she stays on her career track, she will miss out on other things.

It is a choice that each individual has to make for themselves. Some people are happy working all the time. Some crave a balanced lifestyle.

Most people want it all, but getting it all is a hard trick to pull off.

Jeff was going to chase his career at all costs. Although he was formerly married (and now divorced) with three children, his first love has always been his career. It is his sole-mindedness that makes Jeff Ruby, Jeff Ruby.

A guy who chases an armed hotel robber across a parking lot has a fierceness of determination that few possess.

Jeff's "in your face" ambition and high lifestyle rub some the wrong way, but Jeff Ruby has lived life the way he has wanted to. As Verbal Kent said in the movie The Usual Suspects, a man can't change who he is.

Jeff is a high roller with a fierce work ethic. Jeff is not looking forward to retiring and spending time in his garden. He is someone determined to build an empire.

If you want to compete with him, you need to work as hard as he does. A guy who chases hotel robbers and who survived a nightclub fire that killed 165 others is not going to be scared by business competitors.

Jeff is a guy who listens to his heart and instincts.

Even if that means giving O.J. Simpson a boot out the door.

Link to article by Angie Fenton in Courier Journal:

http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20070701/FEATURES/70630007/

Additional Columns about some of my father's other friends:

The King and the Ribs King

Business Vision from a Smut Peddler

The Poll

The following are the results from my last poll:

Do you have life insurance other than insurance offered by your employer?

72.4% said yes
27.6% said no

Do you think state lotteries should be outlawed?

60.7% said yes
39.3% said no

This week there are two poll questions:

1. Was Jeff Ruby correct in asking OJ Simpson to leave his restaurant?

2. Do you agree with President Bush's decision to commute the prison sentence for Scooter Libby?

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

Weekly Poll


Short Note from Don

This was an interesting item passed along by Bill Bartelman at the Paducah Sun. Bill is a highly esteemed political reporter and has been on Comment on Kentucky with me.

John Edwards to Kentucky?


Don McNay is Chairman of the Board for McNay Settlement Group in Richmond, Ky. You can write to him at don@donmcnay.com and read other things he has written at http://www.donmcnay.com/. His award-winning column is syndicated throughout over 200 newspapers.

The iPhone

McNay on Money

The iPhone

I was looking almost caught up in the craze about iPhones until I read Joe Nocera's column in the New York Times. Joe saved me a lot of money and aggravation.

I love my iPod and was headed out to purchase an iPhone until Joe noted that the phone DOES NOT HAVE A REMOVEABLE BATTERY. If the iPhone battery gets weak or dies, you have to send the whole thing back to Apple and pray they get you a new one quickly.

I will stick with my Sidekick. I was the first in Kentucky to have a Sidekick and I am generally an early adopter of technology, but not technology that won't allow you to change batteries.

Read Joe's column. Howard Kurtz referenced it on his Reliable Sources television program on CNN and it is getting a lot of attention.

Joe Nocera's Column on iPhones:
http://www.ndnation.com/boards/showpost.php?b=backroom;pid=590848;d=this

Joe is one of the greatest business writers in history and wrote (or edited) two of my favorite business books, A Piece of the Action and The Smartest Guys in the Room.

Both are must-reads. Joe is also an avid reader of my column and does not hesitate to tell me what he likes and doesn't like.