What Happens After Winning the Lottery


Life-Changing lottery

“What do you think of buying lottery tickets?”  My tablemate discretely asked me after I told her that I run a money blog for women.  We were at brunch and we had just finished introducing ourselves. Her tone was a bit hesitant as if expecting a chiding.

She breathes a sigh of relief when I told her I’ve bought a few lottery tickets myself when the jackpot was too good to resist.

I get the enticement, for a couple of minutes, I can dream about how I’d quit my day job (table-flip), the vacations I’d take (hello Maldives), recreating the shopping scene from Pretty Woman (in a Hermes store).  It’s fun to daydream. It’s entertainment.

And that’s what I file it under in my budget, entertainment.  It’s not my plan for retirement income. I don’t actually imagine that I’d win a life-changing amount of money.

But what happens if you do?

We all know lottery tickets are the fast-food of spending; the odds are never in our favor.  Most money bloggers would say something like, oh, if you took that $5 a week, you can shave 2 days off your retirement over your lifetime.  But those 2 days in another few decades don’t seem as much of a draw as the fun we’d have now.

And of course, my favorite justification; I might be hit by a bus tomorrow, so I might not even make it to retirement.  Might as well have the fun now.  So I buy that ticket.

If you were one of the unbelievably lucky few that do win a life-changing amount of money, you might carry on that justification mindset.  Actually living out your daydreams of quitting your job, of taking yearlong vacations, buying luxury cars.

The Lottery Curse

So it is not surprising that most lottery winners are back at where they started within a couple of years of winning.  They burn through their jackpot doing just that; living out their daydreams.  Many lottery winners say they spent their cash on friends and houses and cars.  A lot of them say that when people came asking for money because they fell on hard times, these winners couldn’t find a way to say no.

When we read stories like this, we have empathic feelings of “oh, that’s too bad”, but let’s face it, there’s a bit of the “that’s karma for ya” or “They were too frivolous and shallow, they deserved to lose it”.

The reality is that they most likely didn’t have a lot of financial education. It wasn’t exactly taught in schools.   So their paths might be our paths too, even if we’d like to think we’d do things differently if we suddenly found ourselves with a life-changing amount of money.

What is a life-changing amount of money?

Life-changing looks different for different people of course. We all think it’s in the millions.  That’s why we daydream about winning LottoMax or the PowerBall.

Maybe for you, life-changing is the size of your mortgage or the amount of your outstanding student loan. But a recent article cites a survey that claims $19K was life-changing for most people. Specifically for those classified as Millennials, the average amount was only $5,000.  

Of those surveyed,  most people said they’d use for the cash to 1) pay off their credit card, 2) start a business and 3) save for retirement.

These answers make this money professional’s heart swell with pride.


Here’s the secret.  In our lifetime, we will likely experience the need to handle a life-changing amount of money.

There is a money transfer happening now in Canada and the United States and in most developed economies.  It is projected that in Canada, there is $1 trillion of assets in motion and as much as $28.7 trillion in motion in the United States.  A lot of that is actually going to end up in the hands of women like you and me.

It’s not pleasant to think about, but a lot of that “in motion” is in the form of inheritances from previous generations.  It could be an inheritance from Aunt Ethel, but it could be from our parents.

Why now?

There are a couple of reasons why this might be happening now and women haven’t experienced this before.  The most obvious is that women have made a lot of progress towards equality. Also, many women now marry later in life, if at all.  In past generations, there might have still been inheritances, but it might have gone to the son or if it went to the daughter, it might have been commingled with the household finances and managed by their husbands.

Another reason is simply that our parent’s generation saw the largest increase in personal wealth than any generation before.  It was only our grandparents’ generation that survived the Great Depression.  We all had at least one grandparent that saved everything “just in case” it became useful again later.

Our parents, the baby boomers, experienced a rapidly expanding middle class.  There are a lot of economic reasons for this, but suffice it to say, boomers have a lot of “stuff” to hand down.  Baby Boomers is the generation that had land, houses and assets to will down to their children.

According to researchers, about 1/3 of that inheritance will come in the form of real estate; the family house or cottage, the rest coming in the form of financial assets; cash, stocks, bonds and other investments.

So what?

I began this article with stories of people blowing their lottery winnings.  I’m sure if you had asked them prior to winning the lottery, what they were going to do with the money, they would spend some of it.  I bet they would say they would save some of it too.  Squirrel some away for the future. But out of most of the examples, this never happened.  They were caught up in the emotions, albeit happy ones.

When it comes to inheriting a life-changing amount of money, there are a lot of emotions too.

Ones of grief.  Regret.  Guilt.

Your heart is utterly broken and a formerly unnoticed pillar of your world is just gone.

It is during this stage when you have to make decisions. You can’t even get out of bed, but there are still things to take care of; arrangements to make. You are faced with issues you’ve never really thought about before.

How confident are you that you will make a good financial decision at this time when emotions are running so high?

Imagine if you had to learn how to manage money on top of all of this. This is one of the more unique money challenges that women face.

Why this is important

Women are at a special disadvantage with their inheritances.  As I mentioned, historically women haven’t had as much experience in managing investments as our male peers.  The existing industry focuses on their male clients and speaks their language.  We aren’t heard when we walk into the Financial Advisors’ office.

So we avoid dealing with investments.  It’s uncomfortable and we feel silly for not knowing the “basics”. And with all of the information online, we are overwhelmed.  So instead of empowering ourselves, we stick to our comfort zone.

But at what cost?

After all, no matter what the relationship we have with our parents, there is one thing I’m sure of.  Our parents want the best for us.  By passing their assets to their children, the inheritance can be their last gift to us.  To honor this and what they have done for us, it’s up to us not to squander it.

It is our responsibility to know how best to apply this life-changing amount of money to better our future.

Here’s how you can take responsibility:

  1. Subscribe to money blogs like this one.
  2. Start with 1 hour a week dedicated to learning more about investing.
  3. Get an accountability partner to go on this journey with you.

2 thoughts on “What Happens After Winning the Lottery”

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.