Here in Fooldom, we (rightly) rail against the lottery, for many reasons. Pinning your hopes for a comfortable retirement largely on the lottery system and investing heavily in it over many years is pretty much a recipe for disaster. That said, a dollar spent here and there on a lottery ticket shouldn't hurt you. Just understand how astronomically remote your chances are of winning a major jackpot. The odds are many millions to one. You're more likely to be hit by lightning, and you really don't think that's going to happen, do you?

Still, the unlikely does happen to a lucky few. Just as it did to Juan Rodriguez, a Colombian immigrant and parking-lot attendant. A month after filing for bankruptcy, with 78 cents in a bank account and $44,000 in debt, Mr. Rodriguez won a $149 million lottery jackpot. (Soon after, before he even received his check, his wife filed for divorce -- and a piece of his pie.)

The denizens of our Retire Early Home Page discussion board had some interesting thoughts on this development:

  • For starters, in a poll, 33% thought Mr. Rodriguez would burn through his windfall within one or two years. Two-thirds thought he'd go through it within four years.
  • Ariechert opined that, "The government is going to take about 31% ... Rodriguez probably has about 100 head of relatives all looking for handouts.... It didn't sound like he was too financially brilliant to start with."
  • Decath mused that, "He'll go through it in 1-3 years. Probably giving a lot of it away while binge spending on himself. He'll wake up one day with an empty bank account, bounced checks, and debt as well, and wonder how it all disappeared. At that point, he'll have to sell the Ferrari and mansion to pay off the debt."
  • Omni100 noted that he once worked in the legal department of a large company, where plaintiffs who won product liability cases were given the option of lump-sum or annuity payments: "Even after reviewing the extensive data showing that a typical person who took the lump sum payout would typically spend all the money in 18 months whereas an annuity would last a lifetime, the plaintiffs would most often opt for the lump sum." Mr. Rodriguez opted for the lump sum, too.

It may be true that Mr. Rodriguez wasn't a careful financial planner before he won, but then most of us aren't. Survey after survey has demonstrated how unkempt most of our financial homes are.

It may be true that Mr. Rodriguez will squander this windfall -- but if you think about it, when we find ourselves mired in credit card debt, we've done a similar thing. We've spent more than we should have. We've viewed convenient credit as free money. We've opted for immediate gratification, buying things that we craved.

In some ways, we're already not so different from Mr. Rodriguez. Fortunately, one thing both he and we have in common is reason to be hopeful. If he chooses to, he can turn his financial life around with this turn of good fortune. He can put most of it aside while he thinks and learns.

We can and should do the same -- learn more so that we can prepare effectively for comfortable retirements. Odds are, we won't win any lottery jackpots, but through saving and investing, we can do OK. And if we do win a lottery, we'll be prepared to allocate that money intelligently.