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Subscribe to RSSAs the Powerball frenzy continues, people across the nation are rushing out to buy their ticket to a dream, but winning the jackpot can sometime translate to major losses. NBC's Erica Hill reports on the lottery "curse" and two September Powerball winners how their lives have changed, for better and for worse.
You surely know by now that the Powerball jackpot is set to hit at least $550 million tonight. You should also know that your odds of winning the grand prize are somewhere around 1 in 176 million (at least, we really hope you know that). So here's a bit of comfort for you tonight as you stare dejectedly at your losing ticket: Most lottery winners don't end up any happier than the rest of us.
Yeah, yeah, you can probably name 550 million reasons why winning the jackpot tonight will make you happy. But here's the truth: A handful of psychology studies over the years have evaluated the happiness of lottery winners over time, and found that after the initial glee of getting one of those big giant checks has faded away, most winners actually end up no happier than they were before hitting the jackpot.
Arguably the most famous paper on this subject was published the late 1970s, and it's a doozy: Psychologists interviewed winners of the Illinois State Lottery and compared them with non-winners -- and, just for good measure, people who had suffered some terrible accident that left them paraplegic or quadriplegic. (You can find the abstract here, but you'll have to pay to read the full report.) Each group answered a series of questions designed to measure their level of happiness.
Joe Raedle / Getty Images
Stefanie Graef holds what she hopes is the winning Powerball ticket she just bought at Circle News Stand on Tuesday in Hollywood, Fla. If she's lucky, she won't win.
What they found was counterintuitive, to say the least: In terms of overall happiness, the lottery winners were not significantly happier than the non-lottery winners. (The accident victims were less happy, but not by much.) But when it came to rating everyday happiness, the lottery winners took "significantly less pleasure" in the simple things like chatting with a friend, reading a magazine or receiving a compliment.
"Humans tend to have a relatively set point of mood," explains Gail Saltz, a New York City psychiatrist and frequent TODAY contributor. Most people tend to bounce back to that set point after a major life event, whether it's something negative or positive. But for some lottery winners, psychologists believe hitting an especially huge jackpot may alter that happiness baseline, making it harder to see the joy in everyday things.
More recently than the '70s research, a 2008 University of California, Santa Barbara, paper measured people's happiness six months after winning a relatively modest lottery prize -- a lump sum equivalent to about eight months' worth of income. "We found that this had zero detectable effect on happiness at that time," says Peter Kuhn, one of the study authors and a professor of economics at the university.
Andrew Jackson "Jack'' Whittaker Jr., his wife Jewell, right, and their granddaughter Brandi Bragg, left, pose for a photograph after being interviewed by TODAY in this December 2002. In his darkest moments, Whittaker has said he sometimes wondered if winning the nearly $315 million Powerball game was really worth it.
You've heard the stories of lottery winners whose post-jackpot lives turned sour. There's Jack Whittaker, the West Virginia man who in 2002 won the nearly $315 million Powerball jackpot. Initially, he generously gave millions to charities, including $14 million to start his own Jack Whittaker Foundation. But later, the dream turned to nightmare: A briefcase with $545,000 in cash and cashier's checks was stolen from his car while it was parked outside of a Cross Lanes, W. Va., strip club. His office and home were broken into, he was arrested twice for drunken-driving -- and the list goes on.
Or there's Alex Toth, a Florida man who in 1990 won $13 million to be doled out in 20-year-payments of $666,666. (Seriously.) At his death in 2008, the Tampa Bay Times reported on the sad direction his life had taken: Years of living it up led to a split from his wife and charges of fradulent tax returns, among other serious woes.
What gives? Behavior experts have a couple theories. One is simply that we humans just tend to get used to stuff -- the good and the bad. The psychological concept is called "happiness adaptation," and Michael Norton, associate professor at Harvard Business School, co-authored a 2007 paper that sought to uncover why hitting major life goals -- including the dreamlike goal of winning the lottery and the more down-to-earth goal of getting married -- don't end up making us as happy as we expect them to.
"The idea of adaptation seems like a negative thing -- it's a shame that we have to get used to the good things in our life, from lottery winnings to ice cream. But adaptation also helps us when bad things happen to us, making the impact of losing our job or getting divorced less painful over time," explains Norton, who is also the coauthor of the forthcoming book, "Happy Money: The Science of Smarter Spending."
He continues, "Big positive and negative events can have a lasting impact on our happiness, but this impact tends to decrease over time. In some sense, because people have so many facets of their life - from their job to their friends to their family to their hobbies - the impact of a change in any one of those facets is less extreme than we think, because many of the other things in our lives stay the same. (We win the lottery but we are still stuck with our same siblings, for example.) As a result of this, people tend to adapt to life events and end up closer to where they were than they think they'd be."
Tonight's historic Powerball jackpot has reached a whopping half-billion dollars and continues to grow. Andrea Canning reports on the frenzy for tickets in New York City.
This is partially because we are terrible at predicting how happy more money is going to make us. The truth is, money can make you happy -- but only up to a point. "Research shows that the impact of additional income on happiness begins to level off around $75,000 of income - but people keep trying to make more and more money in the mistaken belief that their happiness will continue to increase," Norton says. "As a result of this mistaken belief, people think that big windfalls will change their happiness dramatically - and may end up with less happiness than they expected."
On the other end of the spectrum, landing a windfall that lifts you out of a financial pit really can provide significant, lasting happiness. In 2006, Sandra Hayes, then a 46-year-old social worker making $25,000 a year, and 12 of her coworkers won the $224 million Powerball jackpot. After taxes and splitting the money with her coworkers, Hayes had won $10 million. She bought her dream car (a brand-new Lexus) and her dream home (a half-million dollar house in St. Louis). But first, she paid off her current home and then gave that house to her daughter and grandchildren, who'd been living in a rough neighborhood. She quit her job and now spends her days writing -- she's already published one book and is working on a second one.
"Yes, my life is different, and it feels good," says Hayes. "This summer I had a $900 water bill. Six years ago, well, if I had a substantially huge bill, I would’ve had to make payment arrangements. That’s one of the things I like, that I’m able to pay my bills in full and not scuffle."
The first secret, as Hayes tells it, to winning the lottery without losing your mind is to immediately meet with a financial planner you trust and make a plan that works for you. The second is a little simpler. She says, "Just because you win the lottery, it does not change you as a person."
Related:
Hey, Powerball winner: Here's your holiday shopping list
Advice for the Powerball winner: Pay taxes
11 crazy things more likely to happen than winning the Powerball jackpot
Follow NBCNews.com health writer Melissa Dahl on Twitter: @melissadahl.
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I think I would just be happy with having enough to make sure my bills were paid on time, own my own property, plenty of food in the fridge and have enough in case of emergencies. I don't care about winning the lotto, just let me find a way to get ahead enough to actually make ends meet. There's no need to be greedy.
"There's no need to be greedy."
That is exactly what the GOP and the 1% in this country fail to see. It will be far better for everyone and for our country as a whole if they make a few less millions and millions of others can stop struggling.
I am amazed every time I see someone with that "1%" lunacy. Since when did success become equivalent to "greed"? It is no more realistic than saying 47% of the population that pays zero taxes are "lazy" or "parasites". That 1% tax bracket currently pays over 37% of the countries bills, Greed is a better description for the 75% of the tax brackets that account for less 12% of tax revenue! I know, lets just tax the 1% to poverty! Now I wonder just who will pay the bills next year.
Most of the so-called 1% are not corporate fat-cats making millions but two regular professionals married to each other and residing in a high cost-of-living area. The architect married to the physician, the engineer married to the accountant, the college professor married to the lawyer, etc. Both spouses probably have heavy student loan debt from the education necessary to work in their jobs, and if they've got kids, they're paying a ton for childcare in order for the 2nd parent to stay employed FT.
In 2011, our income was 1/3 of what it was in 2010 because of unemployment and then a lower-paying new job. But our tax bill was 1/10. That's WAY too skewed. Yes, we were better off in the good year and should've paid a higher percentage of our income in taxes. But triple the income shouldn't result in 10x the tax burden.
Beer Mug, your class envy is showing again. Not all 1%'ers, as you call them are GOP. Think Hollywood. The stars of successful television shows don't need to make $1 million an episode, do they? The should make $200,000 per episode and the rest given to the poor, correct? And if you think that their salaries don't affect you, think again. The salaries are reflective of the rates paid by the advertisers, so the the advertisers are basically paying the actor's salaries. The cost of advertising is added to the cost of their products thus raising the prices for everybody, including the poor. So, Hollywood is actually hurting the very people that they claim they want to help by paying the actors so much money. So fo the sake of the poor, cut the actors' salaries.
Crimson Wife, you are so right. It's too bad that liberals fail to make a distinction between two married professionals bringing in about $350k combined and an executive pulling in eight figures. To the liberals, they are all 1%ers and deserving of scorn. They make no consideration regarding the local cost of living.
Matt,
First of all, quit putting all liberals into one category. Not all liberals are the same, as all conservatives are not. Secondly, we're talking about national averages. When the national median income is in the $50-55,000 range, I'm sorry but $250,000+ IS high income. It's your choice to live in a higher cost of living area. Your higher income compensates for it. If you move to a lower cost of living area, chances are your income will go down also. Both even out if people live within their means. The trouble begins when people on the higher end of the income scale end up paying a smaller percentage of their income (after write-offs, loopholes, tax havens, etc) then people making less income.
You know, there are people out there who genuinely have worked d*mn hard for what they've gotten and live quite comfortably. They're not just greeding b*stards who do nothing more than work their employees to the death while cackling like maniacs and rubbing their hands while foreign children rub their feet in gold flecked lotions.
This article is only half right. Obviously money is not going to make you feel ecstatic 24 hrs a day. The HAPPINESS comes from the financial freedom to LIVE where you want and DO what you want to do in life. It frees you from having to spend all your time just scraping up enough to pay the rent. If you are the kind of person who never had any higher ambitions than getting wasted or spending time in strip clubs then yes you will probably be disappointed. Why don't you ask Bill Gates or Warren Buffet if they are happier as a result of money? They are DOING something other than just using it to party 24/7.
Sure I would give money to charity but I would find more enjoyment from creating a business to create jobs for people.
It's a Two Dollar Ticket of Hope, Odds are pretty slim You'll win but it unleashes a chance to dream. I'd be more than willing to take a chance on the Misery of Extreme Wealth, Duh !!!!
It would definitely be a true opportunity to clean out all the garbage in your life, as with all your so called friend hitting you up for money, and get pissed at you if you tell them no.
Should I win I'd rather be miserable than searching every stash place I have for a penny! Not to forget all the unknown relatives I'll soon have that crawl out of the wood work. Party time!! You can bet I'll enjoy every minute of it!!
As a nurse I work with all kinds of people.There are many women who have been wiping peoples' asses for 30-40 + years.Every one of them would benefit from my winnings.I would also make huge parks in urban areas for community gardens and-room to breathe
$500 million could probably buy a whole country like, say, Somalia - and would include your own navy!!!
Somalia? No thanks, I'll just buy a small island near Hawaii and rely on the U.S. Navy. (And a few of you guys).
Winning the lottery doesn't automatically equal happiness. What it is is an opportunity to pay off all your bills, to quit your soul-sucking dead end job, to help your friends & family improve their lives, to get into the home of your dreams or at least pay off the home you already have, to give to charity if you're so inclined, to ensure financial security for yourself & your immediate loved ones, and to have some fun doing things that you otherwise would not have the time or money to do.
A smart person will take steps to ensure that they never again have to work simply to survive or to maintain their lifestyle, regardless of how they spend the rest of their winnings. No, money doesn't buy happiness, but it can resolve a lot of problems that some people struggle with their whole lives. Of course money comes with its own pitfalls but I think most of us would rather have those kinds of problems rather than the worries of the typical middle class person.
The jackpot has grown many times towards year end and bigger than before. The super size jackpots brings in a lot of ticket buyers. I'm sure the operation is closely watched and secure, even though I've never seen any information published about how it's all done. I'm sure it's all on the up-and-up and I'm certainly not accusing anyone of anything. They're not shy about posting the overwhelming odds.
This is purely a hypothetical scenario if someone wanted to rig a lottery. You know through terminals reporting sales what numbers have been picked, but more importantly, you know what numbers have NOT been picked. All you have to do now is slightly weight the balls for the non-winning numbers to be drawn. You could build some huge jackpots that way. You'd have to shut off ticket sales about a few hours before each drawing so you'd have time to set this up. Then, when you wanted, you have the 6 numbers come up that you want with how ever many winners you decide. Maybe you want just one winner in one State. It could very easily be done.
Once again, I'm not accusing anyone of anything. I believe this lottery to be all secure and legitimate. They may not be in all of the World, though.
Somebody will win though--If the odds are 175,000,000 to 1 and there are a 175,000,000 tickets sold, one
will be the winner.
175mil different tickets. Quik picks duplicates sets of numbers sometimes.
1. Contact a trusted financial advisor and establish a plan of wise investments, including sharing with immediate family, contributing at least modest amounts to other close family relatives and making human integrity elevating contributions to causes such as Wounded Warriors and suffering Hurricane Sandy families.
2. Emulate the example of Maddie's Fund, The Pet Rescue Foundation, in helping to create a no-kill nation where all reasonably healthy and treatable shelter dogs and cats have improved chances of adoptions into loving homes.
Money is not everything, but it is ahead of whatever is in second place.
Money can't buy happiness, but could be miserable with a smile.
I'd buy a huge vocational rehabilition and job training and residential facility for homeless veterans.
I understand not living too differently, but not being happier? Please... if life free of crippling debt, and enriched with the ability to do at least 10% of whatever you might have set as a goal, aspiration or plan for the future .. as well as complete freedom to access new things that might offer something to life isn't enough to make a person heave a sigh of relief if not a smile, then there is nothing left worth staying on Earth for beyond the point of that realization. Positively nothing.
No, it may not bring happiness but it would alleviate a lot of worry about how to heat your home and things of that nature!
You would never get me off the lake.
I'd give most of it to the Churches, Homeless Ministries, and World Outreach. I'd have just enough to live on, and give something to family and friends. Just give me a self sustainable house w/ self-generating electricity, food, etc, with lessons on how to be completely self reliant.
I'd live off the grid and anonymously. I have no desires to be rich or famous.
The truth is you would probably at first ... then realise you are a fool to waste money and there is so much more to life than day to day survival. There is nothing as greedy as those who think the world owes them anything and they have a "right" or "entitlement" to your money. Chances are in the end you would realise that the greatest asset money provides is time ..... time to travel, time to do all the things you ever dreamed about, time to build and create. Help family, of course and up to a point. The best help for others is investing in new companies that create jobs, buying stock in what remaining companies feel jobs in America come first. Trying to do things that restore hope and are constructive. Of course then you will be make more money and be sneered at as part of that mythical "1%" ... but your time on earth will make a difference to millions of people.
Just shows that people who never had money don't understand what to do with it when they get it.
For every one person who has made a mess of his life thanks to the lottery, there are hundreds who went on and did well. As usual the media prefers to focus on the alcoholic and psychologically inept idiots who win. Now go focus on the inept idiots who get the government hand outs and voted for the bamsterboipos.
Like that old saying "money wont buy you happiness" .... ok got it. The truth is its a lot easier to be miserable with money than without it.
Pre-Clinton "new economy": Property and a nice home 5 years from being paid off, comfortable retirement savings, an air-plane, the corvette I always wanted, the motor-cycle I always wanted, able to help others survive and advance. All obtained through hard effort (sometimes 2 and 3 jobs at the same time), continuous schooling and effort.
Post clinton new economy: No jobs anywhere at all, savings gone on survival today, everything gained through 30 years of hard work gone, surviving day to day and straddling the fence between a shelter and the streets. Did I mention there are no longer any jobs?
It is going to get worse too. Suppose you are part of the 47% of the population in poverty today for example. You win the lottery for $1million dollars, good deal right? Now you can relax and have a life right? Maybe. First the government theft has to be dealt with, that $1 million becomes $500,000. You b8y a home and a decent car etc.. You have possibly $300,000. You pay yourself a comfortable $50,000 to live on, pay property taxes etc. In 5 to 7 years you are again in poverty with added expenses. Lets not forget that meanwhile the current political party in power will be printing worthless paper currency by the billions a moth that will skyrocket inflation, increasing taxes that destroy what few jobs are left and there will be millions more poor from the influx of excess 3rd world populations.
Unask the question. That's why I hate poll questions: they are never interested at getting at a truthiness.
First of all, "happiness", is overwhelmingly misunderstood. The word derives from serendipitous events, which of course cannot be going on all the time, only rarely. Otherwise we would adjust to the events if they 'happened' with regularity and frequently and simply 'feel' entitled to them.
It is not happiness that $500 million will buy, it is financial security. Financial security cannot make Hillary rodman look any less like a frumpy than she is, waddling fro dais to dais. So $500 Million won't make her happy (only winning a national election will be able to do that). It won't make the person with very bad health any happier, but it will alleviate the pressure of huge medical bills.
The right question to ask is: Will $500 million pre-tax, make you financially independent?
And that is all that it can accomplish. After that it is up to each human bean to make of the fortune what they will, examples of which abound among the posts of the others.
Personally, I KNOW that $500 Million, that provides the FinSec will make me ecstatic and after that temporary state fades away, a feeling of utter contentment will be the result, not to be confused with Happiness, which I would likely get from experiences dependent upon that money, like having Kate Upton over for a swim, cocktails, a sushi/sashimi dinner,black cherry Gelato for dessert, and a tantric yoga workout afterwards.
So if happiness is accurately redefined to a highly temporary and fleeting state of well- being which you do not have the resources to acquire, but which would be acquired with some of the $$500 Million, then yes, $500 million can provide you with the POTENTIAL for happiness.
Kate will likely not stay the night.
I would hire a psychologist before i hire a financial planner. I can handle my own money, i'll just need to keep my sanity : )
These people were careless to begin with. My military buddy won $10 million (after taxes) on the Utah lottery and he is doing just fine. He was level headed though. Stayed in the same home, bought a Ford pickup, paid off all his debt and started a small business with his money.
If you go live like a rock star...you might as well give it away.
Oh, yes, tell me about the pain of winning a fortune.
If having lots of money is such a "bad" thing then why do the 1%ers complain so much about higher taxes on their income? I know, I know because unlike us lazy-a$$ lottery winners, or wannabees as the case may be, they "earned" it, right? That's another debate for another day....
Suffice it to say my response is: Bring on the pain! Let me win the huge jackpot and I'll pay off all my debts and my family's debts. I'll get a new car, hell maybe two just in case one breaks down. And, I'll finally get to vacation in some of these places I keep hearing about while my nice, reasonably modest new home is being built. (I'll have to fly back home periodically to check on progress....:-) )
Sure, I'll still have problems. I'll probably still have days I'll be sad and blue. Maybe days I'll want to jump off a bridge. But if and when those come along I'll just write a fat check to a good-old-fashioned psychiatrist and let him listen to all my "problems."