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Winning the lottery: Does it guarantee happiness?
By
Elizabeth Landau, CNN
(CNN) -- She was a mother of three living in a small apartment
and working four jobs. And then, as if in a fairy tale, she won her
state's lottery last year. But the story doesn't have the happy ending
you might expect.
She didn't do anything overly extravagant after
the $1.3 million got slashed in taxes. She bought a house, got a new
wardrobe at the Salvation Army, cut work down to just one job and
invested the rest.
And then came the phone calls: promises,
marriage proposals, accusations, threats. People who used to volunteer
to help her do things wanted money for their trouble. Family members,
she says, tried to run her life, and control her money.
"Sometimes
I wish I could change my name and go somewhere and hide," said the
woman, who asked not to be identified to prevent further attention.
It's
fun to think about what you would do if you played lottery numbers that
brought in millions of dollars. But, disillusioning as it may seem, big
winnings can come with big costs, especially because of the greed of
others, experts say.
Jim McCullar of Washington state, who
claimed half of the Mega Millions $380 million prize
Thursday, said he was initially afraid to come forward because "all we
saw were predators and we were afraid to do anything until we got down
here with police protection."
McCullar is "not going to know who
to trust and whether he can even stay and live in the same hometown,"
said Steven Danish, professor of psychology and social and behavioral
health at Virginia Commonwealth University.
Lottery winners
sometimes experience high-profile misfortune. West Virginia businessman
Andrew "Jack" Whittaker Jr. is a well-known example; he won $112 million
after taxes in 2002. Among his personal tragedies since then, his
granddaughter and daughter have both died, and he has allegedly been
robbed several times.
Another case is Abraham Shakespeare of Florida, who was slain after winning a $31 million lottery prize.
A friend was charged with murder in his death last year and
has pleaded not guilty. Shakespeare, Whittaker and other unlucky winners have been featured in documentaries such as E!'s "Curse of the Lottery."
Winning money in a lottery isn't always a
"Lost"-style curse,
of course. Lee McDaniel, 67, of Stone Mountain, Georgia, won $5 million
in the Georgia Lottery last year. He says he has seen no downsides at
all and doesn't have anyone in his life after his money. He remodeled
his house, bought a large RV and a Jeep, and invested a good chunk of it
at low risk.
Aside from those material upgrades, one of the
greatest parts of winning, in his view, 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
relatives, just because they wanted to.
"I don't feel that I have changed. I am just very secure financially," he said.
If money could bring happiness
Research
in psychology and economics has found that people do get happier as
their income increases, but only up to a certain level where they are
comfortable. One of the more recent studies on the subject, published in
the Proceedings of the National Academy of Sciences last year, found
life satisfaction rises with higher incomes up to a household income of about $75,000, and levels off afterward.
In
general, the research on the happiness of lottery winners is mixed. A
2006 study in the Journal of Health Economics of lottery winners in
Britain who won up to $200,000 found an improvement in their mental
well-being two years later. But an often-referenced study from 1978,
comparing 22 major lottery winners with people who did not win, found no
difference in happiness levels between the two groups.
There's
not an extensive amount of study in this area, but experts have a few
ideas about how to make that initial thrill of winning last longer and
increase overall satisfaction.
Have a plan
You've
probably fancifully imagined what you might do with lottery earnings,
but those who do well have serious plans for where they want to be in
five years. Lottery winnings can help them get there, said Danish, the
psychology professor.
Those who don't have clear life goals are
more likely to feel overwhelmed and fumble with the money, even more
than before winning, he said.
Be a giver, not a lender
It's
a common experience that giving away money makes people feel good, and
science backs that up. A 2008 study in Science found that people were
happier spending $20 on others than they were on themselves. In general,
research supports the idea that people feel good when they feel they
are
making an impact with their money in a personal way and a sense of shame when they are stingy.
Indeed,
most iReporters said they would use $380 million to help the world, if they won that kind of money in the lottery.
But
if someone asks you for help paying a bill, that's a different story.
If a friend owes you money, and you see him or her go have a nice
dinner, you feel offended, said Michael Norton, associate professor of
business administration at Harvard Business School, who co-authored the
Science study.
"When you become the rich person, who other people
look to, it can actually erode the social bond that you have with
people, because it changes your relationship from friendship into almost
like a transaction,"
Norton said.
Invest in making memories
It's a personal decision, of course, but research supports
spending money on experiences rather than material possessions. Not only do going places and seeing things lead to more happiness, but
experience-oriented people are better liked by others than those who are materialistic, a 2010 study found.
And
that's partly because once we buy something, we get used to having it
around, and it no longer gives us the pleasure it did in the first few
days following a purchase. An experience, on the other hand, can be
enjoyed again and again when you remember it and tell others about it.
Likewise, if you suddenly get a lot of money and spend it all at once,
you might not get as much happiness as you would if you spread it out
over time.
If you slowly change your lifestyle so that you keep
appreciating that new money, you'll most likely be happier than if you
quickly make large adjustments at once, Norton said. For example, you
could make a point to take a big trip once a year, rather than putting
it all into a house.
And that might be why Harvard economist
Guido Imbens found that lottery winners who received annual payouts
averaging $20,000 (in 1986 dollars) were happier on average -- the
recipients got to have the excitement of getting more money each year,
rather than adjusting to one lump sum.
Does money change you?
It's
not clear that winning money changes personality, and it's impossible
to know how people's lives would have gone otherwise had they not won,
Norton said.
The woman who used to work four jobs said she
doesn't feel that she's changed -- but a lot of people around her have.
She's grateful for what she has but feels scared to lose it.
"I don't know whether 'happy' is the word," she said. "I'm still trying to grasp it."
