Winning the lottery gives people access to things they could only dream of before, such as buying their dream car or enjoying luxurious vacations – all things they never had access to before now possible thanks to big ticket purchases that can increase happiness levels over time. A recent study shows how lottery victories can create lasting increases in happiness levels.
But while it can be tempting to use fast money-making schemes as an escape route, it’s crucial that people understand the pitfalls that accompany sudden wealth.
What Makes Them Tick?
Though stories about lottery winners’ quick rise from poverty to riches make for captivating headlines, their experiences rarely reflect reality. Recent studies provide valuable insight into how individuals respond after winning the lottery.
The first, published in 2019, utilized data from the German Socio-Economic Panel (SOEP), an ongoing project begun in 1984 that has polled households regarding financial and life satisfaction. Researchers compared responses of lottery winning households against non-winning ones; finding that winners reported sustained increases in overall life satisfaction that lasted around ten years after winning big.
Unfortunately, winning lottery jackpots can quickly dissipate if winners misuse their money improperly or live beyond their means. They may become targets of scammers or harassed by family or friends – or in extreme cases those willing to kill them – such as when Georgia jackpot winner Craigory Burch Jr won $434,272 two months later only for seven masked men to break in his home and shoot him dead within weeks after winning it!
Motivations
Dreams of winning the lottery and experiencing sudden riches are a popular goal, yet often end in disaster, as USA TODAY has reported on numerous occasions.
Lifestyle creep, the gradual increase in discretionary spending due to income increases, can occur after receiving a significant windfall, according to research conducted by University of Arizona economics professor James Moore and his colleagues. This could include purchasing luxury real estate or automobiles or purchasing other large ticket items.
Researchers also discovered that those who won large sums of money experienced sustained increases in overall life satisfaction for over a decade after handling their new wealth responsibly – this means consulting financial advisors and legal specialists, taking time to consider how best to use their prize, deciding between taking it in annual payments or as one lump sum payment are all key considerations when handling wealth responsibly.
Risk-Taking Behaviors
Factors can influence whether people engage in risky behaviors. Young adults tend to be more impulsive than their elders and less likely to consider the repercussions of their actions. Some individuals may be inclined more toward taking financial risks but not social or physical ones.
Researchers have linked personality traits like neuroticism-anxiety and aggression-hostility with general risk-taking behaviors; however, some specific risks such as heavy drinking do not appear to align with these personality traits and instead may be caused by other behavioral characteristics like sensation seeking and activity-seeking behaviors.
An individual who takes risks often can find themselves involved in dangerous situations that they cannot prevent, such as getting into a car accident or losing all their lottery winnings. Even worse, they could fall prey to scammers or be killed.
Relationships
An enormous lottery prize can alter relationships and cause tremendous amounts of stress, sometimes to the detriment of both winners and their friends and families. Winners often experience difficulty adapting to media attention they receive and may even become vulnerable to scammers.
There are ways to limit the negative side-effects of winning, however. According to experts, jackpot winners should gradually adjust to their wealth and take their time appreciating it over time. One effective approach would be opting for annual payouts rather than one lump sum payment; this allows winners to slowly appreciate it over time.
Consultations with financial experts is also recommended, to assist winners navigate their new world and avoid either spending all their earnings unwisely or running the risk of their winnings being wasted away.