Will You Be Truly Happy If You Win the Lottery?

By: Don McNay
By: Don McNay

A Psychology Today article titled, "What Will You Do if You Win the $550 Million Powerball Lottery?" caught my attention. Helping lottery winners with their money is my long-time gig.

 "But 'happily ever after' fails

And we've been poisoned by these fairy tales" 
-Bruce Hornsby and Don Henley

 

"Someday I hope you have a chance, to live like you are dying"
-Tim McGraw

 

A Psychology Today article titled, "What Will You Do if You Win the $550 Million Powerball Lottery?" caught my attention. Helping lottery winners with their money is my long-time gig.

The author, Galen Guengerich Ph.D., is a minister who admits that he has "never been much of a lottery person." He makes a point that I hammer on in two bestsellers, Life Lessons from the Lottery and Son of a Son of a Gambler: Winners Losers and What to Do When You Win the Lottery.

Money alone does not buy happiness. Although income is the highest predictor of increased life expectancy (higher income people can eat healthier, have time for exercise and have better access to health care), I have not seen any evidence that lottery winners live longer.

I've seen several cases -- like Abraham Shakespeare, who was murdered in Florida, and Amanda Clayton, a 25-year-old lottery winner from Michigan who died of a drug overdose -- of lottery winners dying far too young.

Guengerich makes one conclusion similar to my own observations: Happiness comes from giving back to society and making a difference for other people.

I disagree with another of his points. He says that lottery winners should spend like there is no tomorrow.

Too many lottery winners already do that.

For a decade, I have used a statistic I found that said 90 percent of lottery winners run through their money in five years or less. Jeremy Babener, a top notch tax attorney in Portland Oregon, has done extensive research on the subject of income dissipation and has convinced me that the percentage is more like 70 percent.

Either way, it's still a lot of people. A lot of lottery winners may not live like they are dying tomorrow, but they like spend like they are.

Guengerich quotes the famous psychiatrist Elizabeth Kubler-Ross who said "it's only when we truly know and understand that we have a limited time on earth-and that we have no way of knowing when our time is up-that we will begin to live each day to the fullest, as if it was the only one we had."

Although I'm a big fan of Kubler-Ross and understand, at some level, what Guengerich is trying to say, lottery winners are not a subset who should be encouraged to spend money quickly.

Every financial concept that I encourage, such as taking the lottery winnings in annual payments instead of a lump sum, using lifetime annuities and investing in a way to "get rich slowly," asks people to spend like they are going to live to a ripe old age.

I want lottery winners to have the idealism of Kubler-Ross in all their actions, but not to the point where they aren't able to meet their own financial needs.

The last time we heard from lottery millionaire David Edwards, he was living in a storage shed, just a few years after hitting the jackpot. I am not sure if Edwards spent any of his money to help others, but wish he had spent more on helping himself.

Lottery winners may find the balance in an extremely hot new book called, Happy Money: The Science of Smarter Spending. I plan to devote more ink on the authors, Elizabeth Dunn and Michael Norton, at a later date, but the two rising stars in the field of behavioral finance do a terrific job of answering the question, "Am I getting the biggest happiness bang for the buck?"

Lottery winners are not the only people who live by the Will Rogers adage of "spending money they don't have to impress people they don't know."

Winning the lottery has not always been the ticket to paradise. But if people use the money wisely, for a purpose, and with financial security being their number one priority, it might allow them to get closer to that elusive dream of happiness.

On the other hand, you don't need to win the lottery to be happy. As Dunn and Norton show us, you just need to spend your money wisely, no matter how much you have or how you got it.


 

"You know you cannot trust them

They know they can't trust you."

-Steve Goodman (Jimmy Buffett)

 

"Now Watergate does not bother me 
Does your conscience bother you?"

-Lynyrd Skynyrd

 

The scandal at the Internal Revenue Service and the Justice Department spying on the Associated Press came at the same time that I have been reading Moises Naim's excellent book The End of Power.

 

Naim does a terrific job in tying together the complicated forces that are causing the end of power to occur.

 

Naim points out that there has been a long standing decline in people who trust government. He cites an observation from Jessica Matthews, who said that every two years since 1958, the American National Election studies group asked Americans, "Do you trust the government in Washington to do what is right, all or most of the time?"

 

Until the mid 1960's, over 75 percent of Americans answered yes. By 1980, it had gone down to 25 percent and stayed close to that percentage ever since.

 

When John F. Kennedy said in 1961, "ask not what your country can do for you, ask what you can do for your country," he reflected the national mood.  

 

When Ronald Reagan was elected in 1980 saying that, "government is not the solution to our problems, government is our problem," he reflected the national mood, too.

 

So what happened in between the short period in between?

 

People at the highest levels of government thought they could put one over on the American people.

 

The American people were smart enough to catch them in a lie.

 

The 2008 economic crisis showed that common sense resided on Main Street and not on Wall Street. Washington chose to bail out their powerful allies and big contributors on Wall Street instead.

 

The IRS and Justice Department scandals, and the clumsy way the Obama administration has handled them, goes back to the same Washington problem. People in Washington expect us to "take their word for it." Then we find out that a detail or two was left out of the original explanation. Then a few more after that. Then maybe one or two more.

Thus, we trust Washington less when we affirm that we've been lied to. Again.

 

I voted for President Obama twice. I voted for him the first time because I thought he would clean up Wall Street. Instead, he sold out to the same big money insiders, like Dr. Lawrence Summers and Timothy Geithner, who got us in the mess to begin with.

 

I wanted to pay Obama back for fooling me last election, but I didn't like Mitt Romney. Thus, I voted for Obama again. Too many Americans are viewing elections as a process of choosing the lesser of evils. Or deciding who will lie to them least.

 

There is a simple remedy to the problem for Washington. Shoot straight, even when you screw up. No one ever tries that. They think they are smarter than people on Main Street and won't get caught.

 

If Nixon had told the truth about Watergate, the scandal would have ended quickly. If Bill Clinton, or John Edwards, Mark Sanford, or the scores of other politicians caught in sex scandals had immediately confessed their sins, I suspect we may have forgiven and moved on.

 

The cover-up, not the sin, is what the American public will not forgive. Why can't someone in Washington learn from 40 years of history and polling data?

 

I consider Ronnie Van Zant, who founded Lynyrd Skynyrd andwrote "Sweet Home Alabama," to be a sociological genius and political philosopher who made profound statements buried in the lyrics of classic Southern rock songs.    

 

Ronnie died in a plane crash in 1977. Thus, he never lived to see Watergate is still bothering us, in a subliminal but profound way. It was part of the continuing reason that Americans have lost faith in Washington.

 

In a way, Washington has gotten away with it. Saying things like "too big to fail," "weapons of mass destruction" and "I did not have sex with that woman" have allowed insiders to hold onto power.

 

But each time we were lied to, it has caused us to trust Washington less and less.

 

Moises Naim did a great job of explaining"the end of power."

 

But when it is said and done, a lot of the power loss in Washington has come from self-inflicted wounds.

 

And self-inflicted lies.

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