About a week ago, David Lee Edwards died in hospice. He was 58, completely bankrupt, divorced, miserable, and strung out from addictions and hard living. He had spent a year or so before that living in a storage shed surrounded by his waste.
Rewind to 2001. David Lee Edwards was an ex-con living in his parents’ house, borrowing money to keep his water on. He didn’t have a job, his relationship with his fiancee was on the rocks—his life was tanking. He borrowed some money to take his fiancee out to dinner, to try to fix things up with her at least. With a few dollars in his hand and his girl on his arm, he felt lucky. So he stopped at the Pump ’n’ Save and bought a lottery ticket. And won $27 million. A fleet of luxury cars, mansions, drugs, and debauched living later, he was dead—ruined and destitute.
This story is not entirely unique. A study headed up by economists from Vanderbilt University established that large-sum lottery winners are actually twice as likely as their socio-economic peers to go bankrupt. Reasons for this abound. The most obvious one is that most people who play the lottery regularly have no clue how to manage their money—as evidenced by the fact that they play the lottery regularly.
But this uncovers a serious issue with our attempts to solve the poverty problem. To hear most bleeding hearts talk, the biggest problem with poor people is that they don’t have money. But as the lottery evidences, money in itself cannot solve poverty in the long-term. Giving people money does not help them if they don’t know how to manage money.
The biggest problem with most poor people is not the fact of their poverty; it is the reasons for it. Most real rags to riches stories involve hard work, thrift, self-control, and perseverance. “Free” money doesn’t teach this. In fact, “free” money may be ruining the people we are ostensibly helping. Want proof? Take a look at lottery winners. Take a look at David Lee Edwards.