Does Money Make You Happy? (... or, Everything You Wanted to Know About Unhappy Lottery Winners)

There are a number of reasons that winning the lottery doesn't buy lasting happiness. First, studies have shown that people get more satisfaction earning their cash than winning it. Second, the boost in happiness from a lottery win has been shown to dissipate over time (this is the so-called "hedonic adaptation"). Studies of past lottery winners shows that happiness levels typically return to where they were prior to the big winning. That said, it's surprising to hear the story of the man who won $315 million in a Powerball lottery resulting in significant unhappiness and feeling of being "cursed." Before digging into his story however let's explore a little further the connection of money and happiness.

Does money buy happiness (lasting or not)?

Yes, of course, with money you can boost you short-term happiness. According to happiness author/blogger Gretchen Rubin who coincidentally was just musing on this very topic:

...it seems to me that because most people scoff (or pretend to scoff) at the idea that money can buy happiness, they don’t spend enough time thinking about how to spend money toward happiness.

Put aside the question of whether to spend money on stuff, or experiences, or health, etc. For now, just think about STUFF.

The fact is, sometimes just the mere possession of some STUFF does give you a big jolt of happiness. (What’s more, sometimes the mere purchase of some stuff gives you something that feels an awful lot like happiness, temporarily – a fact that warrants far greater examination, I think.)

Maybe this shouldn’t be true. But for many people, it is true.

The trick is to know how to spend your money wisely. Some purchases will give you great joy, others are a waste in terms of happiness bang for the buck.

This logic is so intuitively correct that it doesn't require further exploration. With money you can buy some things you want and do some things you had always wanted to do. You will either be happy or have "something that feels an awful lot like happiness". But the question is 'how long will this warm, fuzzy feeling remain?' Not long, according to researchers.

Income/Happiness Paradox

If money were to buy lasting happiness then why has:

Americans' personal income has increased more than two and a half times over the last fifty years, but their happiness level has remained the same? [Myers, D. G. (2000). The funds, friends and faith of happy people. American Psychologist, 55, 56-67]

Americans earning more that $10 million annually are only slightly happier than average Americans? [Deiner, E. Horowitz, J. & Emmons, R. A. (1985). Happiness of the very wealthy. Social Indicators Research, 16, 263-274.] (Source)

Part of the reason for this is that many scientists believe that a good portion of an individual's happiness level is relatively fixed:

Contemporary understanding of happiness believes that a material portion of your outlook is largely set (this is the happiness "set point" theory and you can blame genetics for that) and surprisingly life circumstances generally play a smallish role. This leaves a lot of room to improve your chances to experience the type of life that we all hope for. This is the part that is up to you. Whatever path you take to achieve it understand that your actions will constantly have to evolve since you will be constantly adapting to any improvements in your life.

Hedonic Adaptation?

The pursuit of happiness can be likened to a treadmill and in fact the "hedonic treadmill" is another way of describing the same thing--"the notion that we rapidly adapt to improvements in our lives -- and thus can end up feeling little or no better off." Basically the more we have the more we need to boost our happiness level thereby raising the baseline.

Why the 'source' of wealth matters to happiness

Emory University researchers have determined that lottery winners, trust fund recipients and others who get their money without working for it do not get nearly as much satisfaction from their cash as those who earn it the old fashioned way—by working at a regular job.

Their research measured brain activity in the striatum, the part of the brain associated with reward processing and pleasure, among two experimental groups: one which had to work to earn money while playing a challenging computer game while the other was rewarded by simply opening sealed envelopes which contained varying amounts of money. The brains of those who had to work for their money were significantly more stimulated and for a prolonged period of time. The “pleasure factor” registered by those who did not have to work for their money was minimal and short-lived.

These findings support other studies done over the last few years, according to Dr. Berns. "There’s substantial evidence that people who win the lottery are not happier a year after their success. It’s also clear from the body of psychological literature that people obtain a great deal of satisfaction from the work they do."

Casual observations of the second and third generations that follow successful entrepreneurs and founders of corporations often reveal significant depression, substance abuse and continual marital discord in spite of the great wealth they have inherited. Berns is not surprised by these situations and attributes them in large part to the way in which the brain is wired: "I don’t think it ever evolved to sit back and have things just fall into our laps."

Real world case study of a very unhappy lottery winner

In what sounds like a made-for-TV Christmas story, Jack Whittaker woke up on Christmas morning in 2002 and learned he had won the Powerball lottery jackpot of $315 million. Needless to say, he was a very happy man. But as detailed in this ABC News article, he had "he had no way of knowing that he was embarking on a journey that would lead to tragedy and the loss of everything he held dear." In fact he now says that he wishes he'd never won the lottery.

What happened?

All of the publicity about Whittaker's new found wealth meant that everyone knew he was a very, very rich man. Almost immediately he was besieged by requests for money and help. He gave away at least $50 million worth of houses, cars and cash and suddenly "the man who won a fortune at Christmas had become everybody's Santa Claus." And everything began to change for him.

He started to get sued for all kinds of things.

"I've had over 400 legal claims made on me or one of my companies since I've won the lottery, " said Whittaker. Rob Dunlap, one of Whittaker's many attorneys, said Whittaker has spent at least $3 million dollars fending off lawsuits.

He began drinking heavily.

He became friendless and lonely.

One of the most tragic incidents of his wealth involved his 17-year old granddaughter Brandi, who he was very close to. After winning he showered cars and money on the teen. Her sudden wealth and attention created its own problems and she started using illegal drugs, heavily. Then just shy of two years after winning the lottery, she was found dead, wrapped in a plastic sheet, and dumped behind a junked van. Her death devastated Whittaker and making him feel like the lottery win was in fact a curse.

Other lottery winners, other sad stories

"...nearly one third of multi-million dollar lottery winners become bankrupt in just a few short years after they’re big win."

Sadly but not surprisingly Whittaker's story is not unique nor was he the first to run into problems with his new found wealth.

See related story: "More sad stories of lottery winners ending up broke, depressed and lonely".

The point is that money can't buy the things that make us most happy--our purpose in life, our relationships with family. Ironically, too much money can hurt these. Lottery winners often lose the need to work at the jobs or companies they had been at but don't replace them with something else that drives them with the same passion. Some friends will become jealous others will ask them for money. In fact, they get so besieged with requests for money that they begin to suspect that's what everyone wants from them, which further drives away close friends and thus away from the things that really can make us happy.

Want to improve your happiness?

Try this series of LifeTwo posts aimed to help you get an immediate increase in joy in your life as well as set you up for long-term, sustainable happiness. It is based on the work of the person who teaches Positive Psychology at Harvard--the university's most popular class. Don't you have 10-minutes to see if you can be happier? (Link).

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