Most of us are far more likely to inherit a large lump sum from a parent or grandparent, or receive an insurance settlement than we are to win the lottery; however, the results may be the same. We have all heard the harrowing tales of those who have lost their money, family, and self worth from their big win. This holds true for any large sum you may receive.
When I do throw a few bucks into the lottery, I tell myself that I'm funding my children's education, because I know the big payout is elusive. Here are two lottery statistics from WebMath.com:
- You have better chances of getting into a car accident, plane accident, or struck my lightning, than to win your lottery.
- 1/3 of people in the United States think winning the lottery is the only way to become financially secure in life.
The second statement surprised me. I believe anyone can become financially secure, regardless of income level. Security just has to be defined. Is it a mansion on the beach? Or is it being comfortable in your current paid-off home? The secret to financial security is being satisfied with what you have, and strategic planning for contingencies. This includes having a solid emergency fund, making sure your insurance coverage is up to snuff, and saving for retirement. These deliberate actions, not sheer luck, are the building blocks to financial confidence. Your financial planner can help you create a plan for any lump sum you receive so it doesn't slip away.
As for me, I plan to take my winnings and treat myself to lunch.
Pamela J. Horack, CFP® of Pathfinder Planning LLC provides financial planning advice for a simple fee to young adults and working families in North and South Carolina through group classes, one-on-one planning, and ongoing advice.