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.
The article Could You Survive Winning the Lottery? originally appeared on Fool.com.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.