I’ve always been wary of people who donate to the hard luck cases that they read about in the newspapers- do they truly want those featured to do better or do they just want to make their feelings of sympathy go away?

Take the case of one Madam Pusparani Mohan. She lost her husband in a tragic accident- a crazy Chinese national tried to hijack a taxi which ended up ploughing into him while he was at work. What starts off as a tragedy becomes even worse as she receives a windfall of nearly a million dollars from well-wishers and an insurance payout but sees it evaporate in the space of a year as she loses money to lousy spending habits and a greedy, unscrupulous elder brother.*

Anyway, Kyith over at Investment Moats has his take on the story. My take is a lot more pessimistic about human nature.

1. She shouldn’t even have been allowed to handle that money. Someone who has never ever come close (her husband and her were both cleaners earning a low wage) to having or being able to accumulate a sum like that should just have a trust set up to ensure the longevity of their funds.

2. Financial counselors/advisors (like any other counselor) should realise that financial habits are something that form part of a person. Sending a person for a counselling session(s) does not guarantee that they can handle their finances.

3. People who donate money to hard-luck stories probably are more concerned with how they feel rather than the actual well-being of the persons involved in the story. I remain skeptical of such people and advice anyone who meets these kind of do-gooders to cast an evil eye on them.

By the way, after reading this, if you still think that this is a one-off unfortunate case, please note that there have been plenty of studies done that show the same thing happening to winners of the lottery around the world (see here, here and here).

Handling money is not something everyone is able to do- those that do either learnt the right lessons through experience or grew up with those habits already ingrained in them.

*Said brother convinced her to part with $500,000  to invest in his logistics business. $500,000 to buy a few lorries? C’mon. What are his lorries? Porsches?

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