The mixed blessings of winning the lottery may not be so mixed, after all
Stories that say winning a lottery is more trouble than its worth may be greatly exaggerated
Jake Gittes: I just want to know what you're worth. Over ten million.
Noah Cross: Oh my, yes.
Jake Gittes: Why are you doing it? How much better can you eat? What can you buy that you can't already afford?
Noah Cross: The future, Mr. Gittes, the future.
— The 1974 movie, Chinatown
Money, you've got lots of friends
They're crowding around the door
When you're gone and spending ends
They don't come no more
-- From the song, God Bless The Child
A few weeks ago, someone in the San Francisco Bay Area held the sole winning ticket in the Powerball drawing worth over $1.5 billion. "That's billion with a B," as John McCain used to say. In an instant, that person, who has wisely chosen to remain anonymous, became fabulously, unimaginably, filthy rich. Unless that person was already fabulously, unimaginably or filthy rich, her or his life was instantly and utterly changed.
As that Powerball jackpot was still growing, I took an informal survey of Facebook followers to ask what they would do with such a sum. I was surprised at how measured the responses were. Only one person said she would immediately quit her job. Very few confessed to wanting to go on a wild spending spree, although one guy did say he would buy "a really obnoxious house." Most people were modest in their ambitions - pay off their mortgage, give money to my church or charity, buy a home for a child.
A woman named Laura wrote, "Set up trusts for my grandchildren and give a bunch to my small Episcopal church to start. My first purchase would be some kind of great travel adventure."
Pamela replied: "1. Share with family. 2. New car. 3. Dream home suitable for aging."
"A car! I don't even have one," Dot wrote. "I would move back to So Cal to be close to my grandsons."
But I'm also not sure they or I or anyone can fully comprehend the magnitude of such a sum, that they could do all the things they said they would do - as well as pay the taxes on that largesse - and still have several hundred million dollars left. Had she won the big prize or even a modest one, she would have been able to buy a lot of cars and hire drivers for each.
photo credit: WaStateGov
What I have often wondered is whether coming into millions, or hundreds of millions would make a person happy or happier? I mean, enduring contentment and satisfaction after the initial shock and jubilation wore off.
Years ago, when I was a reporter at a local TV station in New York, a friend who was doing PR for the New York Lottery asked me to have lunch with a half dozen or so lottery winners. None had won a huge sum, "just" a few million. Even though it had been several years since then, the thrill of it was still fresh for them. They were still delighted, maybe even a little dazed by their good fortune. But I also recall several revealing hints of feeling dislocated and bewildered by how much their lives had changed. They were working-class or middle-class people who had worked hard for many years to pay their bills, put away a little money, and take a vacation once every year or two. They had lived in modest neighborhoods and they liked it there. Some had stayed where they were. Several had upgraded to fancier houses in fancier neighborhoods. Two said they still felt like outsiders among their affluent neighbors. Most had kept working even though they no longer needed the income. As we talked, some of them alluded to family, friends, even neighbors who had wanted them to share their new wealth. They said it was awkward rebuffing them. Sometimes they gave them money just so they would not seem like a jerk. What they had not reckoned on - who could? - was that their old lives - in many ways as comfortable as an old pair of jeans; and, if not comfortable, at least familiar - was over. For better or worse.
For worse?
For years, the media has reported on variations of a lottery curse for which winners’ fortunes ended up seeding misfortune: divorce, clashes with friends and family, reckless spending sprees or bad investments, bankruptcy, despair, even death. Tales of good luck gone horribly awry.
photo credit: Montage Communications
The Atlantic magazine ran an article in 2012, A Treasury Of Sad Stories of Lotto Winners, that said, "Winning the lottery, despite the seeming wonderfulness of having some $600 million more dollars (before taxes) to your name, is not all it's cracked up to be," the article said. "In fact, what seems like an American dream may actually be something of an American nightmare."
Say what?
The article goes on to compile shocking examples of the horrors that befell some lottery winners. It's quite a grim catalogue that included a British guy who won more than $10 million and spent it all on drugs, gambling and prostitutes; a New Jersey man who won over $5 million in two lotteries and ended up living impoverished in a trailer; and a Pennsylvania man who won $16 million and not only squandered it all on bad investments, but his brother hired a hit man to kill him. There were more. Tales of murder (successfully carried out), suicide and despair. Oh my!
"Distant relatives and fair-weather friends can come clamoring for their share; spouse can turn on spouse; kidnapping and murder can suddenly become real threats," according to a 2012 Time magazine article, The Tragic Stories of the Lottery's Unluckiest Winners. "And sometimes, the greatest danger to the newly well-off can be the winners themselves."
Doing a Google search into the financial fates of lottery winners, you will eventually come across references to the assertion that 70 percent of lottery winners wind up bankrupt. It's attributed to a 2011 symposium of "experts" on the effect of financial windfalls that was organized by the National Endowment on Financial Education (NEFE.)
Sobering stuff, or rather, it would be if it were an accurate portrait of what happens to the vast majority of lottery winners. It isn't.
My recent attempt to win $1.5 billion. I did not win.
For whatever the reasons, those of us who haven't ever hit a jackpot (or come into a massive bequest) take a kind of perverse delight in these dark tales. Maybe it just makes us feel better about not striking it rich by winning the lottery. Instead we can tell ourselves, "Look what happened to them! I'd rather be me."
In reality, it seems very few people who win the lottery end up consigned to lives of penury and misery. Even fewer ended up murdered.
In 2020, Swedish researchers set out to study the long-term effects of lottery wealth on the winners' mental state, including their "overall life satisfaction" and whether they were happy (or, technically, whether they said they were happy). They got responses from more than 3,200 lottery winners anywhere from five to 22 years after they won.
"Large-prize winners experience sustained increases in overall life satisfaction that persist for over a decade and show no evidence of dissipating over time," the researchers found. There were also much smaller increases in happiness and mental health, but, the researchers said, "For all outcomes, we estimate positive effects of lottery wealth."
Similarly, researchers from the University of Warwick and University of Zurich looked at 617 German households that had won substantial amounts of money in a lottery.
"(They) concluded that winning the lottery improved the winner's sense of overall life satisfaction," according to a recent article in Forbes magazine. "And the more they won, the more significant the positive effect."
"While money doesn't create happiness on its own, it allows you to do things that generate life satisfaction, like helping others, paying for rewarding experiences, and having higher-quality leisure time," wrote John Jennings, the author of the Forbes article.
As for that claim that 70% of lottery winners eventually go bankrupt. Not true. It seems one of those putative experts attending the NEFE symposium tossed that out and it quickly wormed its way into media reports that repeated it until it became accepted as fact.
Finally, in 2018, NEFE felt compelled to clear it up, stating that the 70% bankruptcy figure "is not backed up by research from NEFE, nor can it be confirmed."
As Jennings put it, "Apparently, the expert just made it up."
All of which lends credence to that famous expression that seems to have originated with Beatrice Kaufman, a writer who was married to the more famous playwright, George S. Kaufman, "I've been rich and I've been poor. Rich is better."
Well, I’d like to win to further the research, of course.😉
Thats a fact!