😔 The Most Depressing Lottery Win Ever
FIRE BTC #49 – The state of financial education is rekt
This week’s issue is inspired by an X post that shows a Canadian lottery winner who chose to receive $1,000 per week for life instead of taking a $1 million lump sum.
When I saw it, I couldn’t help but post:
“This is the most depressing thing I think I’ve seen on X. The state of personal finance education in this country is absolutely rekt 🤦♂️”
It was a mix of frustration and disbelief. Something that seems so obvious to me — the time value of money and the opportunity cost of investing — is apparently non-obvious to the vast majority of people.
And that’s not their fault alone.
We’ve built entire school systems that don’t bother to teach these basics. The result are decisions like this that lock people into a lifetime of mediocrity and low expectations when they’ve just been handed a shot at life-changing wealth.
📉 The raw math
Let’s put aside the decision to play the lottery to begin with and run the numbers on her decision.
I was surprised to learn that, in Canada, lottery winnings are not taxed. That means Brenda’s choice to take $1,000/week is exactly what it looks like on paper: $52,000 per year, tax free.
At that pace, it will take her almost 20 years just to reach $1 million in nominal terms.
But here’s where the math gets ugly:
By the time she’s 50 (she looks around 30 now), she’ll have finally collected the full $1M. But thanks to inflation, the real value will be much lower.
Using a 7% inflation rate (roughly the growth of the money supply), $1M in 20 years will only buy what $258K buys today.
Even using the Fed’s “2% target” as a conservative benchmark, that million shrinks to $672K in today’s dollars.
And it gets worse. If we frame it as “How long until she actually accumulates $1M in real terms?”:
At 7% inflation, she’ll never get there. The present value of her payments maxes out around $743K, no matter how long she lives.
At 2% inflation, it takes 24.5 years of payments before she finally reaches a real $1M.
Twenty-five years to get back to where she could have started day one. That’s the opportunity cost of her financial illiteracy.
🚀 Lump sum FTW
Now let’s flip it. What if Brenda had taken the $1 million upfront?
She could immediately put that money to work. Even if she didn’t touch bitcoin, the numbers speak for themselves:
U.S. Treasuries (~4%) → $2.2M after 20 years
S&P 500 (~9%) → $5.6M after 20 years
Bitcoin (conservatively 25%) → $86.7M after 20 years
That’s the power of compounding when you don’t let inflation bleed your future dry.
And the beauty of the lump sum is she could enjoy the money now. Life-changing wealth today instead of a slow drip that loses value every week.
Some people argue she made the “safer” choice because lottery winners are notorious for blowing through windfalls. But I’d rather have the chance to manage wealth correctly — even if I mess it up — than never have the chance at all.
Sure, there are potential pitfalls for coming into that much money out of the blue, especially if you're not proficient at managing even small amounts of wealth.
But we shouldn't let emotions and fear get in the way of rationally optimal choices.
I've written about that in previous issues of this newsletter (see below for an example).
📚 Learning from Brenda
At the end of the day, this isn’t really about Brenda. It’s about the state of financial literacy in our world.
Most people don’t understand the basics of the time value of money, opportunity cost, or compounding. That’s not just an individual failure — it’s systemic. Our school systems don’t teach it. Parents and communities often don’t prioritize it. And so people end up making decisions that look safe in the moment but guarantee mediocrity, failure, and poverty over the long run.
This lottery decision is an extreme example, but the same lack of education shows up everywhere:
People sitting on cash while inflation silently robs them.
Young professionals putting off investing until “later.”
Families trapped in debt without owning assets because nobody showed them another way.
The truth is, if we want the next generation to have a shot at financial freedom, we can’t outsource this. Parents, mentors, and communities need to take financial education seriously. Because the system sure won’t.
And this is exactly why I write FIRE BTC — to show people how they can master their own financial domain and how bitcoin can enable them to reach a state of independence and sovereignty beyond anything else they have available.
That’s it for this week — thanks for reading!
Until next time,
Trey ✌️
This is CRAZY! Especially when you compare how much that $1 million would be if invested now - even conservatively. I'm amazed that not a single person around her pointed this basic math equation out.
That is sad. It is true we aren’t taught basic money management in school nor do most see it modeled well growing up. Thanks for your work in this area. Again, I will forward to my 24 and 22 YO son and daughter.