How Dana Lost Three Winning Lottery Tickets

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Millions of people play the lottery.  Some people sink hundreds of dollars a year or more into hoping to catch lightening in a bottle.  I am quite sure that the lottery racks up its biggest ticket sales when the jackpot is some astronomical number.  The thought of winning hundreds of millions of dollars, no matter how unlikely, induces millions to take a chance on putting their hat in the ring. People reason that if they win even one of the smallest amounts the ticket(s) would more than pay for itself.

Everybody knows that people who win those astronomical sums are more likely to end up worse off than they were before, as unimaginable as that may be. Hindsight has made us all familiar with the term ‘financial literacy,’ that what matters is not how much money you have but how much of the money you have that you keep.  Financial literacy has come into focus in recent years more than it ever has before, thanks especially to the work of Robert Kiyosaki, Suze Orman and Dave Ramsey.  We are smarter now when it comes to money.  Aren’t we?

What I have learned in recent years is that while most people dream about a miracle windfall they fail to recognize the “lottery ticket” they already have in their grasp.  It’s called assets –  the more important aspect of ‘how much of the money that you have that you keep.’  Assets have to be recognized for what they are. So many of us are so focused on the liability side of our finances and the work it takes to service it that we neglect to recognize things of true value and even how a liability can actually become an asset.  An asset is a commodity that has appreciable value.  Real estate is the classic example.  Scarcity is the foundation of its value.  Nobody can create more land but everybody needs it; it is fundamental to life.  The value of an asset is often (not always) reflected in its price, but the hidden value of an asset – hidden to those without understanding of these things – is how it can be leveraged.  For example, an asset such as real estate can be utilized as collateral to access greater sums of money than the value of the collateralized asset.  Real estate can serve as collateral for a loan or a business investment.  But back to the analogy of the lottery ticket.

We piss away enormous opportunities all the time.


Meet Dana.

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Dana is a fictional character. This is a model.

Dana is a senior citizen who has worked hard all her life.  She is a very conservative spender.  For the last twenty years of her working life Dana averaged $100,000 a year. She lived in a modest house in the “inner city” and did not splurge on much of anything.  Dana was an avid saver.  Her checking account averaged a couple thousand dollars a month and she built up her savings account to about $40,000, earning no more than 1% interest most of her saving years. Her credit score was enviable.  So far Dana is technically doing everything right.  Her history and financial standing together are an asset on which a foundation could be built to reach greater financial heights – her self-made lottery ticket.

Dana never understood the stock market.  Like most employees she invested money automatically into the company 401K.   Also like most employees she had no idea on what basis to select a mutual fund or what she was invested into.  She did not take advice to invest some of her income into more aggressive funds to take advantage of potential above-average gains.  She did not take advice to hire an advisor to help her develop a rational plan. People don’t usually see the value in paying for such things. They believe that is the purview of the wealthy but don’t consider that is a step a person of average income can take to grow wealth over time.  Dana preferred to take her guidance from other employees – men – who had no training or real knowledge in investing.  Later, when time was no longer on her side, she expressed regret at not doing more when she had the chance.

The First Bad Decision

Dana bought the house she owned for twenty years in 1992 in a working class area of the city.  The price was $35,000.  She lived in the 3-bedroom house with a sunken living room and nice sized backyard for fifteen years until 2007 when she bought another house in the suburbs.  She had no problem covering the first mortgage, which was only a couple hundred dollars.  Dana paid off the first house in 2010.  She owned the property free and clear then, after years of struggle and financial discipline.  Dana decided to find a renter for the property, primarily to ensure it did not become a target for squatters and vandals.  She did not list with a realtor, but relied on a shaky referral from a friend at her church.  The renter was her friend’s friend, who was barely scraping by and Dana decided to do this stranger a “favor” while accomplishing her goal of keeping the property occupied.  Needless to say, her cash poor tenants – the woman, her boyfriend, her daughter and her unborn child – almost never paid their rent and when they did pay it was either not on time or not in entirety.  Whenever Dana would go to inspect the house or deal with an issue they brought up she would find new damage to the property.  One time, she saw that for some inconceivable reason the medicine cabinet was ripped from the bathroom wall.  And the house often had a foul odor as though nobody bathed and they smoked indoors.  This went on for nearly three years.

The time came when Dana decided to evict.  They hadn’t paid rent in full for at least three months.  When she entered the property after they vacated there were additional damages, some even more significant, and at least one seeming simply vindictive. The house remained vacant for a time until Dana decided to put it up for sale.  This time she did seek the services of a realtor.

Dana And Her Three Discarded Winning Lottery Tickets

In economics there is a concept called ‘opportunity cost.’  According to Investopedia, it is “the benefits an individual, investor or business misses out on when choosing one alternative over another.”  It can be used to “make educated decisions when they have multiple options before them.  Because by definition they are unseen, opportunity costs can be easily overlooked…Understanding the potential missed opportunities foregone by choosing one investment over another allows for better decision-making.”  Unseen is the operative word regarding opportunity cost.  It is the lack of awareness.  And the point of this article is the reason behind this lack, and that is mindset.

One of the biggest challenges in life is weighing the pros and cons of the options before us.  Many variables are involved in an individual’s choices but I have come to believe it is all driven by self-image, which is a function of childhood experiences, emotion, and pride.

The Mentality of Lack

Unfortunately many of us learn in childhood to identify with working hard, struggling and denial of self.  We are taught that there isn’t enough, or that we are not enough, and to be anxious about having what we need.  We are quick to identify needs and desires but slow to recognize the abundance of opportunity around us.  We see success as something unattainable without luck and some special talent that we don’t have and cannot understand.  More tragically, when we learn to deny ourselves we even block our blessings. We think anything worth having must come the hard way and when a plum opportunity falls into our lap we approach it with cynicism and doubt.

Dana is the classic example.


Ticket #1

The first way Dana pissed away a perfect opportunity was in her choice to sell her first property, which she owned free and clear.  She did this right as the market in her area was heating up. New Yorkers were moving to her city in droves to escape skyrocketing rents and property values.  Real estate investors were heavily gentrifying her general area in particular, but despite advice to hold on, she proceeded with the sale. She thought property values wouldn’t rise “this far” into that part of the city.  Dana would only have to pay taxes on the property and minimal maintenance. She saw this as a burden.  She did not perceive her paid-off property as an achievement in life and something of great value.  She related to the obligation of having to pay a bank for a place to live.  It is the mentality of a person who sees themselves as unworthy.

When you never teach yourself to embrace abundance and courage you do not learn the concept of value.  The value in a home is known as ‘equity.’  Equity in real estate, again according to Investopedia, “represents how much of the home he or she owns outright. Equity on a property or home stems from payments made against a mortgage, including a down payment, and from increases in property value.  Home equity is often an individual’s greatest source of collateral, and the owner can use it to get a home-equity loan, which some call a second mortgage or a home-equity line of credit. Taking money out of a property or borrowing money against it is an equity takeout.”  Dana poor decisions cost her several important opportunities that would have been on par with winning the lottery.  The first is the opportunity costs associated with selling the property.  They include:

  • The use of the equity in her house as a “bank.”

Real estate investors know.  A homeowner can get a line of credit (Home Equity Line of Credit) against their equity to fund other investments.  You can use the equity in your home to become a private investor, and there is no shortage of ambitious entrepreneurs looking for creative financing such as this.  The borrower can make periodic payments to cover the interest on the HELOC that the homeowner must pay, plus any interest agreed to in the contract.

  • The opportunity to rent the home to visitors to her city through a platform like AirBNB.

Finding renters this way comes with the built-in security of a large company that vets the renters utilizing their platform and recourse if something goes wrong. The added benefit is that it is temporary so not requiring a long-term commitment.  AirBNB hosts can make a steady, significant income.

  • The real estate boom happening in her area.

Given that the home was paid off the rise in property values would have been pure profit and would have given her the opportunity to easily acquire additional properties.

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Ticket #2

The second loss came from blocking an enormous blessing.  A few blocks away from Dana’s second home in the suburbs, a property owner who had lived in the neighborhood for decades was trying to sell his house on his own.  It is a large, 5-bedroom corner lot with plenty of yard space next to public transportation.  Somehow the gentleman struck up a conversation as Dana was stopped at the light on the street beside his house.  He asked her if she would be interested in buying his property.  She respectfully declined.  She told him she already had a house around the corner.  By some miracle the two had a second encounter in which he literally asked her to buy his house.  He was ready to move on.  In real estate this is called a “motivated seller.”

Remember, Dana was flush with cash – not only the tens of thousands in a savings account making less than 1% interest but also her 401K which allows a loan to buy property as a first-time buyer.  A buyer is a “first-time” buyer three years after buying a property.  You can be a “first-time” buyer many times over. And with her perfect credit score, and job and residence stability, any bank would have been happy to lend her the money.  Moreover, since she would have been purchasing directly from the owner she would have avoided agency fees and could even have worked out just paying the owner directly without a bank.  Dana could have gotten this information from her very daughter if she had simply asked, given that she knew her daughter was a passionate student of real estate investing. Needless to say, Dana declined for the second time.  Dana could not recognize this enormous, rare blessing.  Her mentality of lack, scarcity and not being good enough blinded her to the platinum opportunity that TWICE fell into her lap – an opportunity that every real estate investor salivates over.

Lottery ticket

Ticket #3

The third opportunity cost is also related to real estate.  We are back to the first property, the row house in the inner city in an area that was on the cusp of a spike in property values when she decided to sell to a buyer for $90,000, whom I’m sure felt that he had just won the lottery.

Most people’s dream is to finally pay off their home and pass it on to their children or other family members. 

I mentioned that Dana had a daughter.  Dana’s daughter had been searching for her first property.  After Dana’s house had been on the market for about a year it occurred to her daughter that shecould buy the property.  She made the proposal to Dana, who agreed that if she could get a loan her daughter could buy the property that had been sitting vacant for a year for $50,000.  Her daughter called Quicken Loans and got an approval, contingent upon her having a down payment of $1,500, which is a number she gave them.  To be approved for the loan some of the equity in the home would be used to pay off all of her debt, which is considered a literal gift by the mortgage company, allowed because the property was being transferred between a mother and daughter.  This was Dana’s daughter’s lottery ticket.  All she needed to do was come up with the down payment, which was a bit of a struggle for her because of the circumstance her life was in.  In the meantime, Dana continued to lament not having a buyer for her property even though she did.  Her daughter wondered why the property was still listed with the agent when they had agreed that she would buy it.  The daughter asked her about it but Dana did not give a real answer.

Even though Dana agreed to sell it to her she was yet opposed to the idea of her daughter moving into that neighborhood.  Her daughter explained all of the massive benefits of her owning the home, including the fact that she would be debt-free and only had to make it her primary residence, she didn’t have to literally live in it.  One day her daughter told her that she would have the money for the down payment in two weeks and would be able to move forward with the purchase.  That week she, Dana and Dana’s grandson visited the house.  He asked, “How come nobody wants to buy grandma’s house?” The daughter replied, “Because it was meant for me!”  She went from room to room imagining all of the changes she was going to make to make it her own.

About a week later that Dana’s daughter, who lived with her, heard her mother let out a sound of excitement.  She went downstairs and asked what happened.  Dana told her she got an offer on the house.  Her daughter went into immediate panic.  It was profoundly unimaginable to have her winning ticket snatched out of her hands, to have her goals and dreams crushed by her own mother.  Long story short, Dana’s decision led to her daughter’s complete emotional and psychological devastation.  She did not speak for three days, after going into a profanity-ridden tirade, shaking from agony at the inconceivable loss, an opportunity she would never have again, and desperation at the thought of how much harder things were going to be for her given the plans she had made based on the expectation that her mother would honor her word.  But Dana didn’t value the investment she had already made nor the investment she could have made into her own child’s future.  Sometimes when our own self-image is damaged we need the people closest to us to reflect it back to us, even if by force.

It Gets Worse

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The second house Dana had bought was not even an upgrade financially.  It was much smaller than the first one and was overvalued.  Very soon after purchasing it she was underwater: the house is worth far less than the price she paid, which was more than three times the first one.  And it will never recover.

An additional way that Dana lost out on a great opportunity was her attempt to buy a $30,000 house for her daughter which was earmarked for a first-time buyer.  She did not consider buying it in the daughter’s name, or realize that she herself was in fact a first-time home buyer.


The ability to evaluate the potential costs of missing an opportunity requires both knowledge and vision to discern its unseen future manifestation.  One must have the ability to perceive the likely outcome of a decision given the facts at hand then make a determination as to whether the resources necessary to go through with a choice will have an even greater return.




Investopedia: Equity,


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