You Don’t Have to Win the Lottery to Grow Your Wealth!


You don’t have to be making mega-bucks in order to succeed financially. In fact, there have been many people with large incomes who did not put basic personal finance practices into play and suffered drastic consequences as a result. Many lottery winners, professional athletes, and high-earners have squandered their wealth by failing to adhere to time-tested money management skills. As a result they lost their fortunes and suffered personal losses as well.

This phenomenon is not uncommon. When I was in college in West Virginia I heard a story about a local man who in 2002 won $315,000,000 from the lottery. Eight months after winning he was robbed of $545,000 cash which he had sitting in his car. As a result of this windfall his daughter and granddaughter turned to drugs which ultimately resulted in their deaths by overdose. He said he wished he had never won the money because it cost him his family and happiness. A CNBC article recounts this story and states that “lottery winners are more likely to declare bankruptcy than the average American within 3-5 years of winning.”[1] The article even contends that research suggests that winning the lottery does not make one’s life more happy or harmonious. It unexpectedly has the reverse affect and breaks up marriages, friendships, family-relations, and even financial solvency. So counterintuitively it appears that an unexpected jackpot could actually make you poorer, not richer.

An article published by Sports Illustrated in 2009 shows that 35% of NFL players are bankrupt or under financial duress within only two years of retiring from the sport and 60% of NBA players go bankrupt within five years of retiring.[2] These instances are examples “sudden wealth syndrome”—a tendency to live above one’s means after experiencing a financial windfall. This is characterized by living luxuriously, buying extravagant things, and failing to control one’s spending habits.

Jack Brewer, a former NFL star who played for the Philadelphia Eagles told Fox Business reporters in May of 2019 that it’s very difficult for players to manage their money well for several reasons. Some players are young and inexperienced in matters of personal finance, let alone saving and investing. Some players get paid a lump-sum which they’re then expected to budget throughout the year. Some play in high-tax and high cost-of-living states where an average of a million-dollar salary doesn’t go that far. The average length of an NFL career isn’t as long as you’d think with many players only playing a few seasons. After experiencing a certain standard of living, it can be difficult to tell one’s wife and kids that they can no longer live the lifestyle they’ve become accustomed to.[3]

Anyone can fall victim to sudden wealth syndrome including professionals who make very large incomes, business owners who strike it big, children of the wealthy, or adults who receive a large inheritance. The concept at play is that slow and steady growth is sustainable whereas a jackpot can be overwhelming and even destructive.

While it’s sad to think that some people can’t handle wealth, consider this—you can learn how to budget and grow your wealth better than someone who wins the lottery or makes several million dollars a year! You can become financially independent by learning some basic finance and investing principles. It will take effort and time, but you can succeed. In fact, you have better chances of succeeding because you’re taking the time to educate yourself by reading this book. If you commit to learning and applying the principles of slow and steady growth, you can not only avoid financially destructive behaviors, but also grow your wealth at a sustainable pace over time.  

Think about this concept in terms of this example: Would you rather have a lump sum of $1,000,000 now or a payment of $5,000 a month for the next 40 years? Well if you took the monthly payment it would work out to be 2.4 million dollars over the 40 years. It may be within the realm of possibility to find a job that pays $60,000 a year for an average career life of 40 years.[4] If you make the money, set aside savings every month, plan for big purchases, and invest 10-15% for retirement then you will do better than the person who wins the lottery and blows it all on taxes, gifts to friends, and chasing that luxurious lifestyle. The reality is that with hard work, time, and a little financial planning you can become wealthier than small-time lottery winners. The odds of winning the lottery are very close to zero, however the odds for you succeeding financially are very good if you’ll apply the principles in my blog—you can do this!


[2] Pablo S. Torre (March 23, 2009). “How (and Why) Athletes Go Broke”Sports Illustrated. Archived from the original on 2009-08-11. Retrieved January 6, 2011.


[4] This is kind-of a trick question. If you assume a 7% interest rate then the 2.4 million dollars paid out over 40 years has a Present Value of only $805,000 making the lump-sum payout a better option, however for purposes of my example I explored the other route. This example just goes to show why you should consult a financial advisor before choosing an annuity option. There are more factors than meet the eye and you should consult a professional.

As a financial advisor Daniel is passionate about helping people achieve their dreams and greatest potential in life. He enjoys strong coffee, thick books, and long bike rides in his hometown of Roanoke, VA.

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