Hey you! Yes, you . . . the lucky stiff who won Wednesday’s Powerball drawing, earning hundreds of millions of dollars along with the envy of overworked people everywhere.
I’ve got some good news for you — and also a fair bit of bad news.
The good news first. You really are going to enjoy a huge financial windfall, including oodles of money you can use to buy a new home, fancy cars, a lifetime of first-class plane tickets (or my personal financial dream: always ordering sushi by the piece.)
True, your take-home pot won’t be as big as the headline $759 million. There are taxes, for one thing, which will shave hundreds off millions. And it could be that you’re not the only winner, in which case you’ll have to share with members of your ticket buying pool.
And there’s the fact that you’ll only get that full $759 million if you agree to receive your winnings in monthly checks over the course of 30 years. Otherwise, if you want a lump sum, you’ll get roughly $480 million (or $290 million, after taxes.)
It’s the first big decision of your newly rich life, and ultimately the right answer depends as much on your temperament as anything else.
If you’re a spender, the kind of person who’ll eat a marshmallow now instead of holding off for two marshmallows later, you should probably take the monthly checks. But if you have the discipline to save and invest, you’re better off with lump-sum; even middling investment returns will leave you better off.
Whatever you decide, though, you can’t avoid the really bad news: winning the lottery probably isn’t going to make you any happier.
Today, it’s all euphoria and excitement — along with media attention and wide-eyed dreams of luxury. But pretty soon that jolt will wear off, and you’ll become accustomed to your new life of riches.
At which point, your happiness and sadness will adjust to reflect that new reality. Instead of being upset about difficulties at work, you’ll be upset that your friends and relatives keep asking for money — and that you can no longer tell whether some of your friends only hang around for that reason.
Welcome to the hedonic treadmill, where happiness is always measured against the baseline of your everyday life. When you move to a deluxe apartment in the sky, annoyances still follow — and they still feel just as annoying.
Over the years, there have actually been a number of studies focused on the happiness of lottery winners. The most famous, from the late 1970s, found that people who had been in serious accidents actually got more pleasure from everyday life than recent lottery winners.
And while subsequent research has disputed some of the more pervasive myths — lottery winners don’t all quit their jobs or squander their winnings — the notion that sudden riches won’t bring happiness has largely held up.
So maybe the best way to think of your newfound riches is as an opportunity to be your best self, rather than a chance to change your life.
If you like your job but want to spend more time with family, switch to part-time. If you’ve always wanted to write a book, maybe now makes sense. But if you’re planning to leave your current reality and ride into the sunset, don’t expect to find much additional happiness.