What would you do if you won $1million? This was the question posed to me from News Reporter Mary Robb Jackson of KDKA. Mary Robb was reporting on the Pennsylvania Millionaire Raffle which went on sale Nov. 21, 2006, giving hope to over a half million people to become millionaires. When the drawing takes place on Dec. 30, five people will win $1million, six people will win $100,000 and 750 people will win $1,000. Only 625,000 tickets will be sold.
   
I’m no fan of the lottery. You have a better chance of being struck by lighting on your way to play the lottery or locking yourself in a deep freezer and freezing to death while searching for your lost lottery ticket than you do of winning a fortune in the lottery.  This Pennsylvania Millionaire Raffle reduces your odds of winning from 1 in 80,000,000 to 1 in 625,000.
   
I often tease my family members about playing the lottery. They have been playing the lottery, going to bingo, and going to various casinos seeking their pot of gold for as long as I can remember. It’s reasonable for me to guess that they each spend a minimum of $150 per month over the past 30 years on gaming activity.
   
Recently, a family member of mine played the lottery and won $5,000. After hearing me tease them for several years, this was their moment to gloat. My relative called me bragging about how they spent 50 cents on a Pick Four number and turned it into $5,000. This relative asked me, “What do you know that will give you that kind of return on your money?”  I allowed my relative to have their time to shine. I even gladly accepted the monetary gift they gave my wife and I to go out for dinner. 
   
A couple of weeks went by. The excitement of winning the lottery had past. It was my time to tease. I asked my relative, “How much money do you have left?” They responded, “That money went so fast I don’t know where it went.” I then asked, “So you turned 50 cents into $5,000?” “Yes I did,” they replied. I stated, “You’re telling me that you played one number that day and all you spent was 50 cents. My relative paused and responded, “No, I played more than one number and I spent more than 50 cents.” I then asked, “How long have you been playing the lottery?” “For a very long time,” my relative responded. “Is this the most amount of money you’ve ever won?”  “Yes”, they replied. I stated, “You asked me what do I know that will give you that kind of return on your money. Did you realize that in order to calculate your true return on investment, I would have to calculate how much you spent and how much you won the entire time you played the lottery.” My relative listened silently. I went on to say, “Assuming you spend $150 per month on the lottery, if you were to instead invest that money every month over a 30-year time span into growth oriented mutual funds earning an average rate of return of 10 percent, you would have $342,000. Do your winnings over the years minus your loses equal or exceed $342,000?” My relative responded, “Damon, you make me sick!” We laughed and hung up the phone.
   
I don’t play the lottery. I didn’t purchase a lottery raffle ticket for my son’s fundraiser at his preschool. A couple of years ago when I worked for one of Pittsburgh’s largest banks, my colleagues would all chip in and purchase tickets when the jackpot was in the mega-millions. The idea of them actually winning the lottery and turning in their two-week notice repulsed me more than the idea of playing the lottery. As a result, I gave them my $2. After my wife saw the news story I did with Mary Robb Jackson, she looked at me and said, “Damon, I’m buying a raffle ticket.” Looks like we will have a ticket. 
   
More than 50 percent of those who win big money in the lottery are bankrupted within 10-years. People who win the lottery have a higher divorce rate than the national average, which is currently at 52 percent. Similar statistics surround those who inherit money and those who come into a sudden windfall that they did not earn, such as if you happen to be the winner of “Survivor.” “Deal or No Deal,” “Show me the Money,” or the “Pennsylvania Millionaire Raffle.” To avoid the experience my relative had on a smaller scale of not knowing where the money went, here’s what I recommended to KDKA’s viewers and our readers if they suddenly had $1 million.
   
•Set aside 35 percent for Uncle Sam. Don’t be like Richard Hatch from “The Survivor” who tried to dodge the taxman. He’s now serving time in prison. After Uncle Sam gets his cut, you’ll have approximately $650,000 to work with.
   
•Take between $10,000 to $25,000 ($25K max) and simply have a blast with it. Do whatever makes you feel good. Go on a shopping spree. Take a vacation. Donate to charity. Simply limit your spending to $25,000. This leaves you with $625,000.
   
•Get serious! You have to decide if you plan to retire or continue to work.
   
If you plan on retiring, your focal point becomes making this money last a lifetime. I would encourage you to set aside about $10,000 for emergencies. Invest the remaining $615,000 in good growth oriented mutual funds. Withdraw no more than 6 percent per year from your investment. This will produce a yearly income of $36,900 per year. This will ensure the money will last you a good 30 + years. Can you realistically live on $36,900 per year? 
  
 If you plan on keeping your day job, you have more options to spend your money because you continue to have a source of income coming in. Park the money in a conservative savings or money market account. Reflect on what your goals are. Prioritize your goals. Then begin to use the money to accomplish your goals one at a time.
  
 (Damon Carr is owner of ACE Financial. If you’re seeking sound unbiased financial advice, or if you’re in the market for flexible, affordable mortgage solutions call 412-856-1183 or visit his website at www.allcreditexperts.com.)