Last week I saw a news clip about a man in America who had won his state lottery for the second time in two years.  Not the huge wins that make front page headlines, but a couple of smaller wins of $1.3 million then $1.5million. It is great for him to win big, but the chances of you winning the lottery are very, very slight. If you look at some of the figures below, you will see that winning the lottery, however great it would be, to change your life it would have to be a massive win. As that will not happen, maybe its time to plan for the future,

Imagine winning the lottery.  Not a big win; you do not want to be greedy. What would you do with it? USD1,000,000.

You want the best for your children so the windfall is be a great assistance when paying for college fees. Taking into account sending two children to college, just for their fees and tuition, not food or board (they can pay for those themselves. They have to learn about money at some point) this will be an average of $29000 per year, per child according to the College Board. 4 year studies will be $232,000. Money left = $768000.00

You keep on thinking about your family and your parents.  They are getting on a bit and may need some care when they get older.  A survey from MetLife found that an average private room will cost $248 daily, or around $90,000 a year. If they are unlucky like one in ten people are, they will spend five years there.  This is the point you realise the in-laws can look after themselves.  5 years care = $450,000.  Money left = $318000.

Now it is time to look after yourself. You sell your existing property, and add on to the profit you have made the equivalent of the average price of a new house sold.

It is a bigger house, has nicer lawns and better neighbours to give you the invite to the country club.  The US census states that the average new property sold in the USA was $272900.  Money left = $45100.

I know these figures do not take into account any social aid or bursaries that may be available, and I have not included in items such as the plethora of taxes that you would need to pay to do this, but just for helping your kids and your parents and buying yourself a new family home, it is clear to see that there is not much left to change your life.  What is left over will not pay for the country club membership.

Getting a million dollars windfall is a life changing event to the vast majority of people.  If it isn’t, give someone else a chance on the lottery.  The odds of anyone person winning the lottery are astronomical but longer term investments with just three isolated needs as shown above can help you out.

Start small, start early and increase as your earnings increase. If you do it, and do it well, you will be in a good place.  If you don’t and you win the lottery, just disown everyone, they only want you for your money.

Paul McLardie is a partner at Total Wealth Management. Contact him at Paul.mclardie@t-wm.com .