Would Winning the Lottery Really Change Your Life?
Think you would quit your job and retire on a tropical island if you won the lottery? Don't be so sure. Research reveals the surprising habits of lottery winners.
Posted October 19, 2018
USA Today reports that Mega Millions has hit a $1 billion jackpot — which is the largest Mega Millions prize ever.[i] The article recognizes that hitting those six lucky numbers will forever change your life. But how?
We have all heard stories about how some lucky lottery winners are not so lucky after all. Unprepared for sudden wealth, some solo winners squander their winnings, have friends and relatives come out of the woodwork demanding a slice of the pie, or buckle under the pressure of a financial windfall they are ill-equipped to handle.
When tickets are purchased as a team, such as through workplace office pools, winnings can be tied up in litigation for years without any of the winners ever seeing a dime. Far from the lighthearted jokes cracked beforehand about “not showing up on Monday,” lawsuits over lottery winnings drag on through endless motions, court appearances, and arguments over who put in what amount and when, who only ponied up the cash before a jackpot “rolled over” to create even bigger odds, and, consequently, who deserves how much of the award.
Solo winners are not immune from litigation either, particularly if they bought a ticket for someone else, or graciously let a fellow patron cut in line in front of them — only to buy the winning ticket that would have been sold to them absent their chivalry.
Stereotypes and horror stories aside, how do lottery winners really behave? Research results may surprise you.
From a psychological perspective, we can all agree that money can never make anyone happy. But it can definitely make life easier for many people — assuming they seek out or already possess the means to manage it. Many lottery winners, having grown wise through watching how sudden wealth has adversely impacted others, try as hard as they can to keep a cool head in deciding how to spend (or save) newly acquired financial abundance.
In a piece entitled, “Finding Prosperity as a Lottery Winner: Presentations of Self after Acquisition of Sudden Wealth” (2011), Anna Hedenus examined how lottery winners strategize their approach to winning in a fashion that counters the reckless spending narrative.[ii] Interviewing 14 Swedish lottery winners, she explores the counter-position that lottery winners adopt to combat the squandering winner stereotype. She notes that by using lottery winnings to project “moderate, non-luxury consumption,” the winners achieve feelings of security, fortune, and yes — even happiness.
Lottery Winners Are Still Themselves — Only Richer
In “Becoming a Winner But Staying the Same: Identities and Consumption of Lottery Winners” (2011), Bengt Larsson found that, contrary to the myth of lottery winners escaping current circumstances and becoming “someone else somewhere else,” in reality lottery winners generally remain the same — except for indulging in higher levels of consumption.[iii] Larsson concluded that receiving large winnings is generally accompanied with an effort to maintain identity and social relationships.
Mega Million Money Management
How do lottery winners manage their money, and does it matter how much they receive up front? According to Larsson's research, the answer appears to be yes.
Larsson compared money management behaviors between those who received lump sum lottery winnings versus installments. He found that winners who received lump sums tended to save and invest, as compared with winners who received monthly installments — who were more likely to spend the money. In the author's words, "wild" lump sums make winners “tame” their winnings more firmly, whereas “domesticated” monthly installments can be spent more thoughtlessly without changing identity or becoming an unfortunate winner.”
Millionaires in the Workplace: Lottery Winners Keep Working
Think if you hit the jackpot you would end up leaving town and buying a yacht in the South of France? Think again. Believe it or not, research reveals that many lottery winners would choose to keep working.
Research by Bengt Furaker and Anna Hedenus (2009) found that a significant amount of lottery winners stayed in their same jobs.[iv] In their study, they found that less than 12 percent of winners quit working, and about 24 percent of participants took full-time unpaid leave. Of those who continued to work, 16 percent reduced their working hours, and 62 percent did not make any changes.
Furaker and Hedenus note that their results suggest that winning the lottery does not generally eliminate the desire to earn a living through employment. The size of the winnings, however, did have a significant impact on decisions to reduce work hours and take unpaid leave.
Winners and Losers
Research indicates that everyone reacts differently to the acquisition of sudden financial prosperity. Nonetheless, it is heartening to know that so many people choose to adopt sensible financial strategies to manage their winnings which manage wealth while maintaining relationships.
And of course, if you are holding a ticket for the big drawing — good luck!