02/10/2013 11:20 pm ET Updated Apr 12, 2013

Concerning Money: Keep Your Friends Not So Close and Enemies Even Further Away

"Keep your friends close, but your enemies closer."
-Michael Corelone (Al Pacino) in The Godfather Part II.

"Tell me who your friends are, I'll tell you who you are."
-Bingo Joe McNay (my father), a professional gambler and bookmaker.

"Don't stand so close to me."
-The Police

A friend recently lost her husband at a young age. She told me that men started coming on to her at the funeral. I see it all the time.

The first thing I tell lottery winners, widows, widowers or others who come into large sums of money is to watch out for their family and especially for newfound "friends."

The line in The Godfather II about keeping your friends close and your enemies closer works the opposite for people with sudden money. People are usually smart enough to keep their enemies at bay, but it's often the friends who are grabbing for their wallet.

Things get really complicated when someone is going through a life change. I hit the trifecta several years ago when, within six months, my mother and sister died suddenly and my first marriage ended.

Life was out of balance and I made a lot of silly mistakes, especially when I went back into the dating pool.

Everyone thought I would fall for someone who only wanted my money. I had lots of bad experiences, but having someone take me for money was not one of them.

Some of it was luck. My first relationships were with well-educated professionals with plenty of family wealth. They were looking for someone who wasn't trying to get to their money.

The primary factor that kept me in check was watching hundreds of people walk into my office with lots of money only to come back broke a few years later.

Family and friends were the downfall almost every time.

I've never figured out if family and friends have an "ouch" mark. In other words, they can stay moral and ethical if the "loved one" does not have much disposable income, but "re-evaluate" their ethics if said person comes into a lot of cash.

Most people have friends and companions who are within 15 percent of their own income. When that number gets out of whack, the temptation for the person who has money to use it as a source of control increases, and the temptation of the poorer person to justify being subsidized increases as well.

To quote Glenn Frey, "The lure of easy money has a very strong appeal."

I suspect there is an evil side to some people that turns on whenever they see someone is vulnerable. A law of the jungle that comes forth in humans.

I'm fortunate to have a street-smart family. My father, Bingo Joe, was a professional gambler who was the ultimate creature of the streets. Dad had a mantra: "Tell me who your friends are, and I will tell you who you are."

Dad saw many people brought down by the people they befriended. One of my favorite movies on that theme is Al Pacino's movie Carlito's Way, based on two excellent novels (Carlito's Way and After Hours) by Edwin Torres. Al Pacino stars as a man trying to break away from his "friends" who ultimately bring him down.

It is a struggle many face in life. The winner inside them can be brought down by friends, family and coworkers.

The worst instincts in people come out when there is money involved.

Selecting friends is a tricky concept.

When my daughter Angela Luhys was in the dating world, she developed a concept that she called the "trailer park test."

When a man tried to impress her with material possessions, she always imagined if she would still like him if he lived in a trailer park instead of a nice house.

If she decided that she would still like the guy if he lived in a trailer park, he stayed. If she decided that his money played into how she viewed him, he went.

Angela, who wants (and deserves) full and total credit for coining the phrase "trailer park test," works with me at the McNay Group, where we deal with injured people, lottery winners and others who come into sudden money.

We realized that the "trailer park test" is not just a dating tool; it is a way to measure how people interact with anyone with money.

You frequently see professional athletes and lottery winners develop a group called "the posse." In Elvis's case, it was called the Memphis Mafia. The posse is a group of hangers-on who tell the wealthy person what they want to hear and hope to have money and reflected glory.

The person who gets a large sum of money should do a "reverse trailer park test" on their potential posse. Ask themselves if the "friends" or new "romantic interest" would still be in their life if they lived in a trailer park.

Going back to my advice for lottery winners, the quieter you are about your money, the better. However, there are some people, such as entertainers and professional athletes, who have to be high profile as part of their profession.

Thus, it is not surprising that friends and family play into their financial woes.

Sports Illustrated did a terrific piece in 2009 titled "How (And Why) Athletes Go Broke." The statistics are horrifying. By the time they have been retired for two years, 78 percent of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce. Within five years of retirement, an estimated 60 percent of former NBA players are broke.

Sports Illustrated cited several reasons why athletes ran through their money, but the "posse" was a big one on the list.

People often make terrible choices when their lives are in upheaval. I see it frequently when people receive money from a family death or injury settlement.

Kathy Trant attracted worldwide attention by quickly spending the $4.7 million she received for the death of her husband, killed in the September 11, 2001 World Trade Center attack.

Trant called the money "blood money." Her spending sprees are a sub-conscious or conscious effort to run through the money. Her "friends" were there to help her.

I've had a number of widowers and widows remarry quickly and then turn all financial decisions over to the new spouse. Usually, the new spouse and the money run out at about the same time.

I had a client whose wife was killed in a car wreck. He got $500,000. I helped him invest his money, but every month the new wife would come to my office wanting to withdraw more. Each time, she was sporting new jewelry, a mink coat and other expensive items. I finally went to their house and told them they were going to run out of money.

They moved their money to another broker. Within six months, she had spent the entire $500,000 and left town.

Kathy Trant can't get the money back from the 30 leeches that she took to the Super Bowl. People who prey on grieving widows don't have the money or conscience to help her. I suspect she subconsciously thinks that getting rid of the money will bring back her husband and her old life.

It's not just people with large amounts who feel like they are taking "blood money."

National headlines came out of Aurora, Indiana in 2007, 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 anonymous 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 the Pizza Hut waitress's life will be better because of the "tip."

The waitress's "tip" did not come from an emotionally stable business person. It came from someone going through a personal hell.

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."

Although the focus has been on people who are going through dramatic life changes, such as lottery winners and people lost a loved one, being taken by those supposedly close to someone with money is a universal problem.

I once read that the reason private clubs and country clubs came into fashion was to allow wealthy people a chance to interact with those of similar income. I know many people of extreme wealth, and many keep it by being constantly mistrusting those around them.

Living life in constant suspicion of your family and friends doesn't sound like fun either.

Some simple rules for friendship to prevail:

1. Never lend money to anyone. You are a person, not a bank.

Follow the advice of William Shakespeare. In Hamlet, Lord Polonius said, "Neither a borrower nor a lender be; For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry."

In modern terms, "Friends don't borrow money from friends. That is what banks are for."

In a world of banks, automobile financing, mortgage brokers, credit cards, payday lenders, pawn shops and "buy here/pay here" car lots, someone intent on borrowing money can find a professional lender willing to give them money at a rate suitable to their credit history.

They don't need to borrow from their friends.

Most of the time, the friend subconsciously (or even consciously) considers the loan a "gift" and, as Shakespeare noted, it usually ends the friendship.

Like most people, I've been burned on lending money. The last person I lent money to (several years ago) was a very close friend who makes big money. This person also had big issues I did not know about. I lent an amount I could afford. I thought it was on a short-term basis. I've never seen a dime in repayment and rarely see the friend anymore.

We all make that mistake once or twice in our lives. Anyone who has not done it, please jump up and do a cartwheel. You are a distinct minority.

The key is to learn from mistakes. I did. I don't lend money to anyone. I don't cosign either. My children have a similar philosophy.

People will make you think you are a jerk when you turn them down. Actually the opposite is true. Not lending money is more likely to prolong a friendship than lending it.

2. If someone needs an expensive gift to be your friend, they are not actually your friend.

I felt sorry for Michael Jackson. He was a star from early childhood and never got to meet normal people. He was always surrounded by a large entourage, but always had to pay for them to go places. Or pay them a salary.

I have friends in all walks of life. Some possess genius level IQ's and some don't. Some are multi-millionaires and some have to save up to go to lunch at a fast food restaurant. The key is that, for whatever reason, we enjoy each other's company.

It can be tough for people with money to make friends. Like the Eagles song "Lyin' Eyes" says, "a big old house can get lonely," and having money as a measure of control makes it tempting for wealthy people to "buy" people to hang out with.

On the other hand, if you have to buy your friends, you are getting what you pay for. Life is better when you find real people who want your company and not your wallet.

3. If you like hanging out with wealthy people, pick up the check when you dine with them.

My father made good money, but when he died in 1993, he was not a man of great wealth. The average net worth of his pallbearers went well into the millions. Dad's close friend, Hall of Fame disc jockey Jim LaBarbara, said that "Big Joe McNay was bigger than life. He was friends with everyone from (Johnny) Bench and Pete (Rose) to the big politicians. I think he introduced me to half the people in town (Cincinnati), everyone seemed to like him."

Dad was always the first to grab a check and never forgot his friends' birthdays. Many people expect to be "treated" when they are dining with a wealthy person. I've actually seen people order the most expensive things on a menu when they think someone with more income is paying. It's amazing how some can have "short arm disease" when the check arrives.

Dad was the opposite. He found that wealth was one byproduct for people living interesting lives. He was glad to pick up the tab to be in their inner circle. He was the kind of friend a wealthy person wants to have. Thus, his world was filled with them.

4. Friendship is a lifelong journey, not a drive-by experience.

My book is dedicated to my grandson and my friends who stood up for me at my wedding. The men have all had successful careers and are wonderful role models for children. They have also been my friends for many decades. Even if I don't talk to them for months, I always feel a deep connection.

I am confident that if I won the lottery, none of them would be looking for a handout. All of them would be happy for me. Just like I would be for them.

I meet people who seem to trade in their friends for a new group every year or so. They try to be with the "in crowd" or never get too deep into getting to know someone.

All relationships require trust, love, giving, commitment and flexibility. People who have totally invested in their relationships are less likely to fall prey to an "entourage" or "posse" wanting their money.

Since family and friends are the primary reasons that people blow a lump sum, if you can invest in good quality relationships, you can go a long way toward maintaining financial success as well.

Don McNay is the author of the best-selling book: Life Lessons from the Lottery: Protecting Your Money in a Scary World