What is more, the value of your investment would fluctuate as interest rates moved up and down, which they surely will over the years.The reality is you need some sort of balanced investment strategy which encompasses all these different types of investment. But would you really be able to survive on that sort of income, feeling as rich as you do?Or you could go for high fixed income, like that achievable from gilts. But that would only yield you around pounds 30,000 before tax, less than a measly pounds 2,000 a month once the taxman has had his slice.Of course, the income should rise as dividends increased and you would stand a reasonable chance of protecting your capital against inflation. And, more important, the value of your investment would not keep pace with inflation and the income would fluctuate according to interest rates.You could put it all into ordinary shares. You would probably receive pounds 50,000 of gross interest a year. But that would only be around pounds 3,000 a month net into the bank, even if you were nifty enough to split the winnings between yourself and your spouse to save tax.The pounds 3,000 a month should be enough to keep you in gin and tonics, but you would not be taking too many Caribbean cruises each year.It would not cover the school fees either, if they were a consideration.

So what do you do with the other pounds 750,000?Imagine placing it all on deposit in a building society. Credit cards, bank loans and hire purchase may all feature, but it is most likely to be the mortgage that makes the biggest dent in your newly acquired cash pile.And if you are someone who is renting, rather than a home owner, perhaps you will want to purchase your own house.Either way there is a fairly strong likelihood that you will want a home that reflects more your newly acquired status in life.That will mean moving, which may not come too cheap.It would not be surprising, therefore, if a quarter of your winnings went on clearing debts, moving house and taking a holiday - pounds 250,000 gone already. Circumstances will vary, but for many they will not be insignificant. And why not? You will probably never feel richer than when you first receive the winner's cheque.Then there is paying down your debts, which is both natural and prudent. What are the first things that this lucky lottery winner is likely to do.

An initial reaction is probably to book the holiday of a lifetime. For some - the prudent, the undemanding and probably the retired - it is enough to buy lifelong security. But for others?Imagine a 30- or 40-something, married with two children. This means that spending capital may not be too wise a decision. Of course, it all depends on how much capital you have.Let us take pounds 1m as an example It sounds a lot of money. Sadly, the reverse seldom applies.But there are other considerations to be taken into account when endeavouring to calculate whether your lottery win is sufficient to deliver a lifetime of idle luxury.Remember, you cannot contribute to a pension from investment income, so if you decide to give up work, your nest egg may have to be your pension fund as well. Tora's first law of financial management says that the more you earn, the more you spend.