George is a good man. He works hard and does as he’s told. His employer rewards him with a salary every single week, for George to spend as he sees fit. He uses that money to put a roof over his and his family’s head, to put food on the table, and to indulge in his hobbies.

One day, George wins big on a popular gameshow - equivalent to 1 year of his comfortable middle-class salary. Not “never have to work again” money by any means, but it can do a lot of good if used properly. George figures that since this is not money that he has worked for, it is “extra” money to spend on whatever his heart desires. He already drives a decent car purchased a mere 3 years ago, but George decides that it’s time for an upgrade, and buys the most luxurious car that his winnings will afford him.

12 months later, George still gets up at the same time every morning, leaves the same house, drives to the same job, taking the same route to get there, and the same paycheck home. The car has changed, but his life hasn’t. Not even a little bit. George squandered his winnings. Don’t be like George.

George is a fictitious character, but his circumstances are all too real: People winning money that, if used properly, can change their lives for the better. Instead, it’s spent on nice things that they would like, but that do not change their life in any significant way. Take the example in the story. George already owns a reliable car. Why would he take his gameshow winnings - an amount of money that he will now never again see within his lifetime - and spend it on something so pointless as a new one?

George’s money could have become anything - but instead it became nothing. The excitement of owning whatever kind of car he chooses will fade, bringing him right back to his old life with nothing much to show for his winnings. Some people might say that it’s wrong to tell people how to live their lives and that people should be allowed to do whatever they want. These people are called troublemakers. In reality, people sometimes need external interference, whether they want it or not.

What not to buy

Short answer is “anything that won’t help you make money” - and don’t try to justify a purchase as something that will help you make money when it obviously won’t. You’re only lying to yourself.

You might want to spend that money on home renovations and justify it to yourself by saying that you’re adding value to your home. Your house is an asset, after all. Isn’t that what this is about? Assets? Not so fast. Most people think of the house they life in as an asset, but is it really? Does it earn you money every month, or does it cost you money every month? An asset is something that puts money in your pocket. Your personal residence costs you money. It is a liability. Don’t fall for it.

More things you shouldn’t be buying with suddenly-realized, one-off large sums of money; boats, fancy clothes and other fashion items, parties and/or partying, holidays, a huge tv, a pool/hot tub, personal electronics, gambling, or addictive and/or controlled substances. That list is obviously non-exhaustive, so use your head. If you’re buying something purely to feel good, then that’s the wrong move.

Remember; spend the dividends, not the capital. This money can help you start something that you otherwise wouldn’t have been able to. Don’t blow that opportunity on a night out, a holiday, or a wild weekend of hookers and blow. Don’t get hooked by all the excuses people male to justify to themselves going broke or into debt for a holiday:

• Yes, you could die tomorrow, but you probably won’t.

• Money doesn’t buy happiness, but it’s a lot easier to be happy when you’re living life on your own terms rather than at the boss’ beck and call

• Experiences are important, but when they end, you still need to be able to pay the bills

• We aren’t born to just work, but spending all your money on frivolous things means that that’s pretty much all you’ll do for the rest of your life

• You do deserve to be happy and to have nice things, but what’s really nice is putting in the work to set yourself up to be able to buy nice things without giving your life away to pay for them

What to buy

There are two roads to take here:

You could invest it into income-generating assets like shares, property, ETFs, and so on, which a financial adviser can help with. Make sure that they’re of the fiduciary variety. A financial adviser who is a fiduciary must act in your best interests, regardless of what they stand to gain or lose. A non-fiduciary adviser has no such requirements, and can steer you into financially shaky territory in order to benefit themselves.

Another way is the personal development route. If you’re passionate about something, or you’ve always had a great business idea, then this is the time to pursue those goals. You might have had the “too expensive” excuse before (you didn’t) but now that excuse is gone (it never existed). Whatever you want to do, you now have the chance to learn about it and put it into action. Alot of doors have been opened, which could each lead to a life you never thought possible.Don’t squander your shot.

It isn’t “extra” money

The fact that you didn’t specifically “earn” this money makes no difference to the reality that it’s now yours. A dollar is a dollar, whether you worked for it, found it, won it, or stole it, so why treat this any differently?

You can use your new money wisely and have a good shot at setting yourself up for success for years to come, or you can have a few days of fun before going back to your normal life, broke and miserable. You know what you should do, but do what you will.