What To Do When You Win Life’s Lottery

What if you discovered you could never solve all your problems? Sounds depressing, but the condition is true. Problems don’t go away.

The Law of Conservation of Problem.

In physics there are many conservation laws. In high school we learned about the laws of conservation of mass-energy and momentum. In simple energy terms in a closed system, energy can be neither created nor destroyed, but can merely change its form. An incandescent light bulb demonstrates how electrical energy changes into light and heat. The sum of the result is equal to the sum of the energy inserted. As I recall the bulbs are not very efficent for producing light. There is a great deal of heat created too.

In planning there is a similar law. Problems are neither created not destroyed, they merely change their form.

Problems change form

Problems are always contextual. One of the reasons we should be aware of context. When we understand context we can anticipate the problems and anticipation is the first step in solution.

If I am a poor person, working two jobs, just having enough for food, shelter, a little recreation and bus fare, I have the problems that poverty imposes on me. Too little time for things I might enjoy, uncertainty about shelter and even food.

Poor people don’t plan as well as others not because they don’t know how, but because their time frame is dramatically shorter than it is for others. Predictability is nearly non-existent for them.

Suppose they suddenly acquire a lot of money. Win a lottery for instance. Do they suddenly have no problems. No! They just have different problems. Still related to money. Just ones not in their former context.

  1. How do you deal with suddenly rediscovered friends and relatives?
  2. Can you trust relationships?
  3. Are you safe? Do you need security at home and maybe for your children?
  4. What is this income tax number? That’s crazy!
  5. Are old bad habits carried over and emhanced by the availability limit disappearing? When affordability limits disappear new problems emerge. What once was a bottle of wine is now a case of whiskey.
  6. Is multi-tasking the seven deadly sins now possible?

The Lessons

Newly found large sums of money whether by lottery wins, a bonus, a successful IPO, or an inheritance can disrupt life as much as it solves a problem. While it seems silly having too much money as a problem. A nicer problem in some ways, but nonetheless a problem.

  1. If you should find yourself in such a situation planning is an important element and it is unusually urgent. The first 90 days may define how the money fits or doesn’t in your life.
  2. Observe what is possible. Others have gone down this road before and many have fared poorly. We all know about impoverished or dead lottery winners. Blown inheritance is common. We have seen wealthy business owners, rock stars, and athletes who could not handle the money.
  3. Learn that money is not useful by itself. What it can do, be used for, is important. Having a lot of money means having lots of choices. People who have not had so many choices sometimes choose badly. Others choose well. It is unclear what makes the difference.
  4. Observe opportunities. Help yourself, your family, and others you value. Maybe education and training. Maybe better living accomodation and healthcare. Maybe travel. Maybe a new computer or a library. Maybe new golf clubs and a club membership. A new car. With a driver? Who knows what you might value and benefit from having or doing.
  5. Rethink who you are and what you value. That will tend to keep you on track.
  6. Fit your possible purposes and resources. Understand the idea of lifestyle as a monthly required and available amount. Understand that not eveything need happen at once. Discover the idea that financial tools are a package to address a particular opportunity or problem.
  7. Think about living from incoming cash flow rather than from a bank account. Cash in equals cash out is desirable and it allows you to understand the value of investing. In its simplest vision, investing is just a way to create income. Could be for spending. Could be for creating tax liabilities, could be for reinvestment.
  8. Hire some people who can help you. Remember the urgency issue. You have very little time to create your new path. The ideal advisor here is someone who can understand you, understand your objectives, and understand methods to get what you want. In a perfect relationship they are your cheerleader and your conscience. Support you in your achievements and help you miss the destructive possibilities.


Few of us will win a lottery, not many will get a huge inheritance or have a successful IPO. Some will get a bonus.

The issues still apply. We each have won a lottery of a different sort. When acquire a skill and get a job, we unlock a vast capital value. We should know about and understand we have time to work, skills to provide, the ability to learn, and wise choices to make about allocating the money we receive. In simple terms we are all wealthy and we should learn to manage the results.

Planning helps you get best value for your resources. Observe – Anticipate – Organize – Act.

Get rich quick is unusual. Get rich slow is possible.

I help business owners, and professionals understand and manage risk and other financial issues. To help them achieve their goals, I use tax efficiencies and design advantages to acquire more efficient income and larger, more liquid estates.

Please be in touch if I can help you. don@moneyfyi.com 705-927-4770

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