How strategic thinking could have avoided the loss of $1m in a year

So there is this news moving around on social media about the poor widow who lost $1m in a year. While it is a sad event, it is not necessarily unique. This phenomenon has been studied by many psychologists including Daniel Gilbert who spoke about The Surprising Science of Happiness in a TED talk. While I commiserate with the widow for the loss of both her husband and her money, I cannot help but feel that she had been done in by the lack of strategic thinking. Perhaps more could have been done to help her? Apparently the advice given her by the financial consultant was not heeded. But one needs to question if she was capable of handling this sudden wealth in the beginning. Should she perhaps have needed to be educated, not about being financially savvy - which many people seem to think is the issue - but in being able to think? Let's see the missing links in her thinking that could have averted the problem:


What was her intention on the use of the money? While it is easy to say that we need to set aside money for our children's education etc, if the intention was not hers in the first place, that plan would very quickly disintegrate when the first sign of "something better" comes along. And that was exactly what we saw happen! Now, if we had somehow identified that "something better" like looking good in the community, being a benefactor, or simply being helpful, we could allocate funds better from the $1M pool to meet these without having to resort to losing it all!

Success factors

The minute we know her true intent - which is seldom ever articulated, least of all to strangers appointed to give us advice - then we can shape it by understanding the success factors. By thinking in time, from the present to the future, she can articulate just what it means to have a successful decision. She will then be able to identify the different elements of a successful decision and shape the future with it. It would then be more difficult for her to renege on her financial plan, having seen it all laid out in front of her.


Constraints set the boundaries of a decision. They are necessary conditions for a successful decision. In this case, constraints can include a Benefactor fund, the Children's education fund, the Leisure fund and the like. By doing this, she can meet her objectives without having to dip into her children's money. Again, she can meet her goals and objectives much better.


One of the things we seldom ever talk about are our assumptions and in Asia, we may be too polite to challenge them. But that is very dangerous as we see in this case. After all, what was really driving her thinking when she decided to help out to buy the lorries? Greed! She assumes that it would be a great investment and money will flow to her with great ease. And if this were the case, why would we want to stick the children's money in a fund that will only return 3-4%? Without articulating her assumptions and look at the downside of the investment, she is being very reckless with her money - and her future!

In the end...

Of course, as an external party with hindsight, we can conjecture as much as we like about the case. And for all we know, everything we said was utterly wrong. Yet, it has been my experience working with many people dealing with strategic decisions like how to allocate and use my money, that they don't know how to apply strategic thinking. So ultimately, I can say with some certainty, that it was the lack of strategic thinking that caused her to lose all her money. It may not have been her fault altogether because of her limited education; but perhaps the other people in this situation - the financial planner, the family counsellor - could have pre-empted this situation and taught her to be more strategic? Of course no one can be sure.

In the end, it was Madam Pusparani herself who summed it all up on hindsight, "I made a mistake.... I am so stupid." I hope she gets back on her feet for the sake of her children.


Get the answers at

Written by Ian Dyason

Get our articles direct to your inbox! - SUBSCRIBE TODAY!

Recent Posts
Search By Tags
Follow Us
  • Facebook Classic
  • Twitter Classic
  • Google Classic

Get our articles direct to your inbox! - SUBSCRIBE TODAY!