This article originally published in The Northern Daily Leader on 10 November 2012.

29 43 8 7 15 2 13 were in fact the winning numbers in Tuesday’s record breaking $100 million Oz Lotto draw. You might have recognised them straight away if you were a winner, but sadly it’s almost certain that if you are reading this, you didn’t wake up $27 million richer on Wednesday morning. It seems like the luck of the lottery by-passed Tamworth this week, which is not surprising when you consider that the odds of winning the jackpot are around 1 in 45 million. Nevertheless, Tuesday’s draw attracted considerable interest as millions of Australians dreamed about what they would do with over a hundred million dollars. A friend confided to me that he would retire and live off his earnings of $10 million a year. I had to gently point out that earning $10 million on $100 million of assets was simply not possible; at least, not without taking on a potentially ruinous level of risk. Even $100 million can be lost through poor investment choices.

In reality, a more reasonable earnings assumption, whether you have $100,000 or $100 million to invest, would be around 6% per annum. If you had been the sole winner of Tuesday’s draw, that equates to $6 million per year before tax. About half of that amount goes to the ATO and the costs of managing the money, leaving you with around $3 million, some way short of $10 million. Still, at around $57,000 per week after-tax, that should be sufficient to meet the needs of most people, unless you have a weakness for private jets and small Pacific islands. Though there may be fewer zeros involved, most Australians will need to eventually make a decision regarding their own lump sum, in the form of their superannuation savings. The various options you face are not too different from those facing Tuesday’s lottery winners: do you put it all in the bank at 4%, where it’s safe and secure, but your real return after inflation is only around 1%? Is commercial or residential property the answer? If it is, how do you make sure your tenants aren’t university students with a fondness for Facebook parties, which usually involve the riot squad and an appearance on the 7:00 pm news? What about debentures, corporate and government bonds, shares or precious metals?

The reality is that the government, and your employer, have transferred the responsibility for your retirement on to you. Pensions for life are a thing of the past; it’s up to each of us as individuals to make critical decisions about the hard-earned assets we will have to rely on during our retirement. And remember, lottery tickets and picking the winner at Flemington is not investing, no matter how attractive the returns might seem.