Congratulations! You’ve won the lottery!


Let’s play a fun game…let’s imagine you’ve won the lottery!

You’ve just been handed one of those outsized cheques for £5million and will have that slightly awkward moment when you struggle to squeeze it through the doors of your bank to pay it in.

Unlikely…you say? Well..let’s be honest, the odds are pretty slim…what with the chances of winning the UK lottery being maybe 1 in 14 million.

But someone will win the jackpot. And you might think that would be a good thing for the winner, right?

Wrong! People dream about winning the lottery as the end of their money problems. But the reality is that for most people, its more likely to be the start of their real problems.

Here is a striking statistic for you.

In the US, The Certified Financial Planner Board of Standards says nearly a third of lottery winners end up declaring bankruptcy.

No, that it not a typo… ~33% of lottery winners end up going bankrupt.

So people that win the lottery are more likely to end up bankrupt than people who haven’t won the lottery.

Yes, really. Studies also show that lottery winners fall out with family and friends and suffer higher rates of depression, drug and alcohol abuse, divorce, and suicide than the average person.  That’s why there are so many stories of how winning the lottery can ruin your life.

This tells us something about human nature:  in our natural state, we are all just monkeys when it comes to money.  This is why you have to do some work on yourself. Most people assume that the problem with their finances is that they don’t have enough money. This is understandable but wrong. T Harv Eker puts it like this:

Lack of money is not the underlying problem. Lack of money is a symptom of the problem, not the cause of the problem.

Your capacity to handle money is like a jug.  If you want to be able to hold more water, you need a bigger jug.  So if you want to hold onto more money, you need to increase your capacity to deal with money. You need to make yourself a bigger person.

To see what I mean, imagine that we handed £5m to 2 different people. The effect would be very different depending on who we gave it to.

If we handed £5m to Bill Gates, he’d change nothing at all in his lifestyle…he’d easily deal with that £5m (either investing it or giving it away wisely). It wouldn’t be a big deal for him.

Now imagine we handed the £5m to an alcoholic or heroin addict…its not gonna end well.

Those are the extremes. What about normal people? If we hand them £5m, best case it would lead to some new problems.  In the worse case scenario, it would destroy their life…because they don’t have the capacity to handle it.  Have you ever wondered about all those pop stars / footballers etc whose lives turn into car crashes (sometimes literally) when they get too much money too quickly? They never learned how to handle money.

Politicians and the media often talk as if the state giving people more money would solve all their problems. Sadly, it just doesn’t work like that. When I was young, I thought benefits dependency was bad for the working people funding it (i.e. me).  As I got older, I realised that welfare dependency is bad for the people receiving it.

Weakening people’s incentives to take care of themselves and their family is a disaster.  That’s why I’m in favour of a basic universal income.  As soon as you start means-testing / withdrawing benefits for people with savings, you screw up the incentives.  And people respond to incentives.

There’s a simple way to tell if you’ve learned to handle money and are already truly rich:  when you receive £5m and you don’t change the house you live in, your car or the person you sleep with.

So there are 2 ways to feel richer:

  1. Earn more money and upgrade your house / car / Special Love Muffin partner.
  2. Cultivate gratitude for what you already have (clue: this is easier).

So what if you’ve just won £5m on the lottery?  Well firstly, watch out! Most people are going to want something from you. But here’s some free advice that’s the truth. And, if you’ve won the lottery, this might just save your life.

1. Keep quiet

Don’t take the publicity option. Publicity is valuable for the lottery organiser. For you it’s a disaster. Tell no one other than your husband / wife.

Going public will change your relationships with the people around you…probably not for the better.  Have you heard of The Bank of Mum & Dad? Do you want to be Mum & Dad to everyone? Hint: you really don’t.

Suppress your ego…and keep schtum.  This is the hardest thing of all.

2. Do nothing

This may seem ironic coming from The Escape Artist but DO NOT just walk into your boss’ office and tell them where to stick their lousy job.

Don’t throw all of the cards up in the air at the same time. You’re not ready. Your job provides structure, community and a reason to get out of bed in the morning.

Even if it’s a rubbish job, you will need something to replace it with. So right now you need a period of transition…at least 3 months.

This also applies to spending. Don’t buy anything. No cars / houses / boats / racehorses / cocaine / curtains / soft furnishings.

Seeing as you’re probably not gonna follow my advice here, I will allow you some exemptions:

  • A 200g bar of fruit & nut chocolate (you can share it)
  • 4x 568ml cans of Stella Artois (or 1 bottle of chardonnay)
  • A bike

Doing nothing may sound difficult here. But procrastinating comes naturally to most people…so why not in this scenario?

3. Once you’ve been rich, never be poor again

It sucks to be poor. But one thing worse than being poor is having been rich and then ending up poor.

Fortunately, this is easy to avoid. Get debt free. Then create a diversified portfolio so that no one event can ever make you poor again. Not Brexit, not a stock market crash, not hyperinflation…nothing short of Zombie Apocalypse.

Step 1: pay off all your debts. Then never, ever, ever borrow any money ever again.

Step 2:  Invest the rest. You can make investing really simple with a strategy that works just as well for portfolios of £50,000 or £500,000 or £5,000,000.

4. Beware of wealth managers and financial advisers


The average lottery winner needs help to manage their money.

But if the news leaks out, you’re gonna have a load of vampires and parasites wealth managers and financial advisers chasing you. These are really salesmen.

If you need help (and you probably do), find a financial planner, accountant or financial coach who works for a clear fixed fee.

Preferably someone that doesn’t need to get rich by fleecing you and actually has some clue what it’s like to be rich themselves.

I would say that, wouldn’t I? Yes…but I also happen to be Right.

5. Give back

Apply own mask first

Apply own oxygen mask before helping others.

After you’ve cleared your debts, invested your money and six months have gone by, you’ll have a surplus of income.

Feel free to make the world a better place by targeted interventions.  By all means pay off your parents mortgage. Or your children’s student debt. But do not buy stuff (cars, phones etc) for people or give them cash…it’ll get wasted.

You are allowed to give money to charity.  Why not learn from a pro and look at how Bill Gates gives away billions using the principles of effective altruism? But it’s not just about money. You can also contribute your time or knowledge. Find what works for you.

I am now going to let you into a secret.  These principles don’t just work if you’ve won £5+million on the lottery. They work for smaller wins, for inheritances, bonuses and other windfalls. And here’s the biggest secret of all…

…these principles also apply even if you haven’t received a windfall but just want to be happier.

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  1. ladyaurora · · Reply

    Bloody fantastic reasoning again from TEA.

  2. Great read once again. Enjoyed the Choose FI Podcast the other day 👍

  3. mrspickypincher · · Reply

    Love this! Sometimes I do like to space out and see what I’d do if I won the lottery. I agree – I don’t think I’d tell anyone at all and I’d let the money sit there for a while. In fact, I would actually not take the bulk payout; I’d prefer to get monthly payments to pay less taxes. That means guaranteed income every month. 🙂 I do have to say I’d be pretty tempted to quit my job, but I’d only do so after crunching numbers and making sure it’s a good choice.

  4. Love it – “special love muffin” – where do you get these things from?! And can I steal it!

    Always awesome articles 🙏 Truly life changing from both a financial and personal perspective.

  5. Great read and the paragraph quoted below just resonated with me.

    “Your capacity to handle money is like the size of a jug. If you want to be able to hold more water, you need a bigger jug. So if you want to hold onto more money, you need to increase your capacity to deal with money. You need to make yourself a bigger person.”

    As someone who grew up poor, it certainly felt like I won the lottery when I got a well paying job in the City (London) after University. I could finally throw away the shackles and slavery of a budget. I could live life! I went from pot noodle to michelin star revelling in my new found freedom (and a very good credit score).

    I’ve lived through every single one of the points you mentioned. However, point one, the hardest thing is not to keep shtum (when your parents tell everyone they meet) but to say no to be being the friendly ATM. To say no to being guilted about being one of ‘them’ who don’t care, to say no despite being accused heartlessness, to having a big ego, to endure the look of disappointment while saying no to the expensive christmas presents, saying no while losing friends and family.

    The stresses caused by that lifestyle led to anxiety and rapidly deteriorating mental health. I was sent threatening letters one day and offers of more cheap credit the next! I was showered with love and affection one day and met with hatred the next.

    I was more miserable than when I was poor. At least when I was poor, it wasn’t my fault. Now I had no one to blame. I realised I couldn’t live like that and the search for a solution led me to a few American FI blogs and then I stumbled across you! Haven’t looked back since.

    In a way I’m glad I made the mistakes I did and had the experiences I had, even though it set me back a couple of years. They made me a bigger person. Better late than never I suppose.

    1. ladyaurora · · Reply

      Hi mo
      Thanks for opening up to us.
      Glad you found sites like this.
      Onwards and upwards from now on.

    2. Thanks for the comments – esp to Mo for the honesty!

      Remember, if you like an article, please pay it forward by sending it to someone you know who might benefit 🙂

  6. Excelllent post. How true and how unlikely to be applied. Thanks

  7. Your advice is massively contradictory:

    You say that people need to expand their capacity to handle fund but tell them to avoid getting professional financial advice.

    Jackpot winners are offered financial advice at receipt of their winnings – and I actually think given their propensity to make unwise decisions (like play the lottery!) being ripped off by an adviser is a significantly lessor of two evils.

  8. My take is that it’s best not to tell anyone of it. Treat it as non-existent and this will give one the peace of life.


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    1. SparkleBee · · Reply

      So true!

      Although keeping it quiet is very hard too as someone slips up!

      Someone in my local town won the lottery, a million or two. It was when the lottery had just started. He tried to keep it quiet but it leaked out somehow and he got begging letters. People camped outside his house. Hassle from people when he was out asking him for money and he ended up having to leave the area to find somewhere where he was unknown so he could live a ‘normal’ life.

      He ended up falling out with fiends and family that expected him to share the money and pay off their debts and take them on holidays.

  13. […] We might get lucky, but even winning the lottery screws people up. […]

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