Could You Survive Winning the Lottery?

The Powerball jackpot last week was worth almost $450 million. Three different winning tickets were sold, with one apparently being split by 16 workers from a county garage in New Jersey. Though taxes, multiple winners, and the option for a lump-sum payment will reduce this amount, it's safe to say that a lot of people's lives are about to change dramatically. 

But will they change for the better?

It is fun to fantasize about what you'd do if you were ever lucky enough to win such a jackpot, but once that moment comes -- and reality sets in -- winning the lottery isn't nearly the ticket to a happy life that we instinctively make it out to be.

Lottery winners and paraplegics
In a famous 1978 study, a team of three researchers sought to find out how major life events could affect happiness. Taking 22 people who had just won the lottery, a control group of 22 others, and 29 individuals who had become paralyzed from accidents, they discovered some surprising results.

Intuitively, we would expect that the lottery winners had higher levels of happiness. While that may have been the case directly following their wins, over time, "lottery winners were not happier than controls and took significantly less pleasure from a series of mundane events." In fact, lottery winners were given the double-whammy of losing satisfaction from previously ordinary pleasures, as well as a waning of satisfaction from new pleasures their money could now afford.

Obviously, if people don't have the financial savvy to handle such large amounts of money -- think taxes, out-of-control spending, and the inability to say no to all the people who come out of the woodwork -- things can get difficult.

But even when these circumstances can be avoided, the emotional toll is underappreciated.

Take the case of Billie Bob Harrell, who won $31 million in 1997. Harrell donated large sums of money to charities following his victories, but that kindness also attracted the attention of some shady characters. Harrell was forced to continually change his phone number, and after the stress of the lottery ended Harrell's marriage, he committed suicide -- less than two years after his victory.

Where does your meaning come from?
An equally instructive tale can come from the plight of Keith Gough, a British man who -- with his wife -- won $14 million in 2005. After Gough quit his job, he began drinking out of boredom. This eventually led to a divorce in 2007, and by 2010 he had died of a heart attack -- which some believe was brought on by the combined forces of stress and alcoholism. 

The fact that Gough quit his bakery job no doubt played a role in his downfall, and three researchers in 1996 published a paper (link opens a PDF file) in The Journal of Psychology speaking to this phenomenon. In their research, the team discovered that "work centrality" -- or "the degree of general importance that working has in one's life" -- was a key determinant of whether lottery winners continued their jobs post-victory.

Simply put, if a person's job was important to her identity before becoming a lottery winner, she was far more likely to remain at the same job after the victory than if she was simply trying to eke out a living. Psychologically speaking, that's because her motivation for work was intrinsic -- it helped meet social-psychological needs -- rather than extrinsic -- or just satisfying her need for income.

But I don't think we need to limit the scope to just "work." There are lots of ways to find meaning in life outside work -- including family, community, volunteerism, and faith. Being explicit with yourself about where that meaning comes from seems to be the important factor in maintaining a healthy life -- lottery or not.

Our own Nicole Seghetti put together an excellent series on what to do if you win the lottery.

But if you'd like the CliffsNotes version, perhaps the best advice for the newly minted millionaires last week comes from an elderly bus driver surveyed in the Journal of Psychology research paper. The winner of $20 million stated: "Lottery is just a bonus that came my way; it has not [affected] or will not affect my work habits and goals in life." 

It seems that the best way to survive winning the lottery is to live the type of life -- psychologically -- in which you don't need to win the lottery.

While it's good not to count on quick money, it's also wise to plan for your future. In our brand-new special report "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.


Read/Post Comments (13) | Recommend This Article (31)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 12, 2013, at 11:58 PM, Ljub1lotto wrote:

    Just recently woman won one million lottery and she didn't know where she will spend that money. In the first place, let me ask, why did you play? To loose? I play lottery to win an you bet, I will know where I will spend this money. I owe it to ones who play lottery and are serious about winning. Makes me jump on the roof. Another one; I didn't play to win!! Excuse me! If you don't care about winning, than don't play! Oh, another one....I knew I was lucky, I knew I was going to win big? Wow!! Anyways, point I try make here is; when you win think about all of us who didn't, so don't make some stupid statements. G:(

  • Report this Comment On August 13, 2013, at 7:26 PM, cmalek wrote:

    Another pop psych article on happiness. I come to TMF for investing insights, not for some warmed over, amateurish pop psych blather.

  • Report this Comment On August 13, 2013, at 8:25 PM, funkyduane wrote:

    Isn't it interesting how some people hear what we intend to communicate, and others hear something radically different. Thank you Brian. What you pointed to has been known for quite a while. In the 1950's IBM did a study that lead to a theory of human behavior known as the IBM Comfort Zone. Further study has shown it's more like "Familiarity Zone" because people stick with what's familiar even when it's not necessarily comfortable. Recognizing myself in the various theories for human behavior has allowed me to become richer than I ever ever dreamed possible. I'm no longer the slave to my internal dialog or my emotional states I use to be. Thus enabling me to buy when others are selling and sell when others are buying :-) Keep it coming.

  • Report this Comment On August 13, 2013, at 10:22 PM, TradewindRider wrote:

    This reminds me of an article I read in the San Francisco Examiner back in early 2000. Apparently some of the newly minted Internet gazillionaires were feeling guilty about making so much money so fast. Naturally, a disorder was coined for it - Sudden Wealth Syndrome, or SWS.

    A few months later, the market crashed, thereby curing the disorder without need for further treatment. The shrinks must have torn their hair out.

    If any lottery winners are reading this and have residual guilt or depression related to their sudden wealth, they are welcome to contact me regarding a solution. I can assure you I won't feel one bit guilty about it.

  • Report this Comment On August 14, 2013, at 5:41 PM, drax7 wrote:

    If the rich are unhappy it's their fault, said Lenin.

  • Report this Comment On August 14, 2013, at 6:01 PM, NovaB wrote:

    Willing to give it a try - big jackpot or little. Anything to help me "retire" from my current financial endeavor.

  • Report this Comment On August 14, 2013, at 6:43 PM, Ziggy7796 wrote:

    I joined the motley fool team about 2 months ago and I was very very skeptical at first ...but I sat and listened carefully to what you had to offer and I took a chance. After DD... I invested about 1/3 of my ira account into bofi when it was selling for about 45 dollars per share. after a 40 percent return on my investment after 2 months I am a firm believer in your vision to find tangible growth....keep up the good work and let's continue to have fun. you have set the bar very high and it's great.

  • Report this Comment On August 15, 2013, at 7:26 AM, SuntanIronMan wrote:

    As mentioned in this article, I think the biggest problems are people retiring immediately after winning the lottery. If I won the lottery (which I wouldn't, because I don't play the lottery, but if I did...), I'd use the money to start my own business. Spend all of my post-lottery winning time running my own business, creating some jobs, making more money in the process, which I'd use to create more jobs and so on. I can't imagine retiring young and doing nothing of note for the rest of my life.

  • Report this Comment On August 15, 2013, at 9:19 AM, mikecart1 wrote:

    While 99% of wannabe lottery winners fantasize about cars, houses, vacations, and other materialistic trash, I would instead do what I wanted to in life. That is a big difference from what I wanted to BUY in life.

    In Wall Street, the famous line by Gordon Gekko is to "be rich enough to NOT waste time".

    In that case, I would use the money to start my own business, build it up, travel around the world to improve my business, meet tons of people, and live life on my terms.

    Now that is something worth winning the lottery for! As for transportation, I'd have someone drive me around the rest of my life. No garage of cars needed if you ask me!

  • Report this Comment On August 15, 2013, at 9:49 AM, cmrk3 wrote:
  • Report this Comment On September 14, 2013, at 9:42 PM, lovetoalldoggies wrote:

    My plan for my winnings is to put the bulk of it in a trust for animal rescue. It's a lot of money and will go a long way. I plan to revamp animal rescue as we know it here in America. That will be my job and I know I will work more hours than I ever worked in my former Corporate America life. It will take years to set up the facilities I envision and to get the rescues out there more centralized. I can't just hand over millions of dollars and expect the work to happen. I will happily work every day of my life knowing that less dogs and cats will be euthanized, less unwanted animals are being born, and that every animal that makes it to a rescue affiliated with me WILL find their forever home. I can't imagine a more rewarding life.I have set aside for myself a percentage and can live very comfortably. That means when I decide to take a vacation, it will still be just as meaningful as when I had barely a dime to my name. And there are/will be lawyers, advisers, and accountants there every step of the way to help me to make the best decisions.

  • Report this Comment On October 11, 2013, at 12:27 AM, thidmark wrote:

    If you're stupid enough to play the lottery, then miserable outcomes are not at all surprising.

  • Report this Comment On February 18, 2014, at 7:17 PM, AlecWest wrote:

    The "famous 1978 study" you referred to was flawed before it started. It chose 22 lottery winners who "wanted" to be found. I suspect that 22 lottery winners who didn't want to be found would have been much happier than the 22 who did.

    LuckyYou-dot-alecwest-dot-com

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