When your numbers come up
THE TH odds of winning Powerball Po are 76,676,600 to one. on Today we’re going to meet m that one.
A married couple hit the ja jackpot, collected $3 million ta tax-free … and contacted me.
For privacy’s sake, let’s ca call them Donald and Melania. While they were gi giddy with excitement, I de decided to be a total wet bl blanket.
I told them the odds were high that they’d be less happy in three years’ time than they are right now.
Blink. Blink. How could that be?
Well, Philip Brickman and Dan Coates of Northwestern University, in Illinois, did a famous study where they tracked the happiness of two very different groups: people who’d just won the lottery, and people who’d become paralysed after an accident.
Three years after, they checked back to see how the study participants were faring.
The results were startling: participants in both groups had more or less reverted back to their pre-existing mental state.
Psychiatrists call this phenomenon “hedonic adaptation”, which is a fancy way of saying that our brains are hardwired to adapt to circumstances (good or bad) and that, ultimately we’ll be no happier than we were before.
The reason lotto winners can be even worse off is because of all the stress the money brings — worrying what to do with it, worrying that you’ll waste it, and fending off people who want a handout.
So, here’s what I advised Donald and Melania to do. First, don’t tell anyone. Second, seriously, don’t tell anyone. Nothing good will come of it.
You didn’t earn it, and some people will think you don’t deserve it. It will cause resentment, envy, and conflict with the people you love.
Third, if my wife, Liz, and I were in that situation, we’d put in place a simple financial plan: clear all debts, consider putting $100,000 in a high-interest savings account and make some after-tax contributions to your low-cost superannuation fund.
Then, set up a family trust and invest the proceeds into low-cost share funds
— and live off the dividends.
Finally, if you want to feel great and not have all the hang-ups, donate some money anonymously.
You’ve beaten the odds once on the lotto, but to be a happy winner you’re going to need to beat them again.