() — It is entertaining to imagine what you could do if you won the millionaire lottery prize, like the historic Powerball on November 8 with a jackpot of US$ 2,040 million. But as disappointing as it is, big prizes come with big costs, especially due to the greed of others, according to experts.
Research in psychology and economics found that people do get happier as their income increases, but up to a certain point where they feel comfortable. One of the studies on the subject, published in the academic journal Proceedings of the National Academy of Sciences in 2010, found that satisfaction increases with household income of about $75,000, and levels off at higher levels of wealth.
In general, studies on the happiness of lottery winners are contradictory. A study published in 2006 in the Journal of Health Economics on lottery winners in Britain who won up to $200,000 found an improvement in their mental well-being two years later. But an oft-referenced 1978 study comparing 22 big lottery winners to non-winners found no difference in happiness levels between the two groups.
There isn’t a huge body of research in this field, but experts do have some ideas on how to make that initial thrill of winning last longer and increase overall satisfaction.
1. Have a plan
You’ve probably already fantasized about what you could do with lottery winnings, but those who are doing well have serious plans about where they want to be in five years. Lottery winnings can help them do just that, said Steven Danish, a professor of psychology and behavioral and social health at Virginia Commonwealth University.
Those who don’t have clear goals in life are more likely to feel overwhelmed and clumsy with money, even more so than before winning, he said.
2. Donate, don’t lend
It’s well known that giving money makes people feel good, and there’s science to back it up. A study published in 2008 in Science found that people were happier spending $20 on others than on themselves. In general, research supports the idea that people feel good when they feel like they’re having a personal impact with your money and a sense of shame when she is stingy.
But if someone asks you for help paying a bill, that’s another story. If a friend owes you money, and you see them splurging by going out to dinner, you feel offended, said Michael Norton, associate professor of business administration at Harvard Business School, co-author of the study. Science.
“When you become the rich person, the one that other people look up to, it can actually erode the social bond that you have with people, because it changes your relationship from friendship to almost a transaction,” Norton said.
3. Invest in creating memories
It’s a personal decision, of course, but research supports investing your money in experiences rather than material possessions. Visiting places and seeing new things can not only lead to greater happiness, but experience-oriented people have been found to be more agreeable to others than those who are thought of as materialistic, according to a study from 2010.
And this is due, in part, to the fact that once we buy something, we get used to having it around, and it no longer gives us the pleasure that it gave us in the first days after the purchase. An experience, on the other hand, can be enjoyed over and over again when it is remembered and told to others. Similarly, if you suddenly receive a lot of money and spend it all at once, you may not get as much happiness as if you spread it out over time.
If you slowly change your lifestyle to keep appreciating that new money, you’ll likely be happier than if you quickly make big adjustments all at once, says Norton. For example, you can aim to take a big trip once a year, instead of spending it all on a house.
And that may be why Harvard economist Guido Imbens found that lottery winners who received annual payments of an average of $20,000 (in 1986 dollars) were happier: The recipients had the thrill of receiving more money each year, instead of sticking to a single sum.
4. Stay anonymous (or at least very low profile)
Seemingly unlimited income may not only stoke temptations to flout restraint, but lottery winners may also find that their friends and family treat them more like a brand than a loved one, said Michael Boone, a wealth manager. from Bellevue, Wash., to .
“Any time you are a public figure, you will attract the attention of people who want to take things from you,” he said. “Most of us wouldn’t be very happy if the amount of our paychecks appeared in the newspaper.”
Charities begin asking for contributions. The self-proclaimed businessmen and entrepreneurs approach with proposals. Second cousins come looking for loans. Friends know someone who can help manage money.
“That’s not to say you don’t want to do something nice for those people, but it could become a full-time job,” Boone said.
His advice would be to remain anonymous, but only Delaware, Kansas, Maryland, North Dakota, South Carolina and Ohio allow winners to avoid state lottery publicity. (Michigan does in certain circumstances, but not for Powerball or Mega Millions winners.) Therefore, Boone advises his clients to keep a low profile.
Bad experiences of lottery winners
Lottery winners sometimes experience great misfortune in full view. A good example of this is the businessman Andrew “Jack” Whittaker Jr. of West Virginia who earned $112 million tax-free in 2002. Among his personal tragedies since then, his granddaughter and daughter have died, and he has allegedly been robbed multiple times.
Another case is that of Abraham Shakespeare, from Florida, who was murdered after winning a $31 million lottery prize. A friend was charged with his murder in 2010. Shakespeare, Whittaker and other unlucky winners have been featured in documentaries like E! Channel’s “Curse of the Lottery.”
A mother of three who lived in a small apartment and worked four jobs, like in a fairy tale, won her state lottery.
He didn’t do anything overly extravagant after the $1.3 million was cut in taxes. He bought a house, bought a new wardrobe at a charity shop, kept only one job, and invested the rest of the money.
And then the phone calls came: promises, marriage proposals, accusations, threats. The people who offered to help her do things wanted money for their trouble. Members of her family, she says, tried to run her life and control her money.
“Sometimes I would like to change my name and go somewhere to hide,” says the woman, who asked not to be identified to avoid more attention.
A man named William “Bud” Post’s own brother tried to kill him after he won $16.2 million in a Pennsylvania state lottery game in 1988. Although his brother was jailed, Post’s reckless behavior and spending made him left broke and divorced before dying in 2006 from respiratory failure.
These are extremes, of course, but there are plenty of cases of minor tragedies befalling lottery winners.
There’s that of a British man who squandered a £9.7m jackpot in 2002, much of it on cocaine and prostitutes, only to find himself working as a garbage man again in 2010.
And the story of the St. Louis wig maker who made $18 million in 1993, only to spend so lavishly on political and philanthropic causes that he filed for bankruptcy four years later.
Or the New Jersey woman who won the lottery twice, a total of $5.4 million, but was so unable to avoid gambling that she ended up in a trailer after giving most of her money to casinos. of Atlantic City.
The other side of the coin
Winning the lottery isn’t always a “Lost”-style curse. Lee McDaniel, 67, of Stone Mountain, Georgia, won $5 million in the Georgia lottery in 2010 and so far he doesn’t see any problem with him, nor has he come across any people after his fortune. The man from Georgia decided to remodel his house, bought two vehicles and invested a large amount at low risk.
Aside from those material improvements, one of the best parts of winning, in his opinion, was being able to help his sister in California, who needed a leg amputation. She would have had to live in a nursing home, but McDaniel gave her enough money to build a ramp in her own home. He and his wife also gave money to other family members, simply because they wanted to.
“I don’t feel like I’ve changed. I just have financial security,” he said.
It’s a stark contrast to Whittaker, and while most lottery winners’ experiences fall between Whittaker’s, it’s safe to say no one wants to go down the latter’s path after receiving millions.
No one should have to tell ABC News, as Whittaker did five years after his windfall, that they’d be better off without the money.
“Since I won the lottery, I think there is no control for greed,” he told the station. “I think that if you have something, there is always someone else who wants it. I wish I had tore up that ticket.”
Does having money change people?
It’s not clear that earning money changes personality, and it’s impossible to know what people’s lives would have been like if they hadn’t earned, says Professor Michael Norton.
The woman who used to work four jobs said she doesn’t feel like she’s changed, but many people around her have.
She is grateful for what she has, but is afraid of losing it.
“I don’t know if ‘happy’ is the word,” he said. “I’m still trying to figure it out.”
With reporting from ‘s Elizabeth Landau, Eliott C. McLaughlin, Elizabeth Landau, Greg Botelho and Chandler Friedman
