Imagine waking up tomorrow knowing you’re worth $905 million (yes, Uncle Sam takes nearly half of lottery winnings back).
What would you do first? Probably hire a legal team to protect your identity. Then do sensible things people expect of a non-sociopath, like pay off your family’s debts and mortgages.
SHOPPING. And not shopping with the plebians at Gucci and Mercedes. You’d be shopping for houses in the Maldives and yachts where the smallest room is bigger than your current apartment.
Now imagine waking up in 10 years. Are you so much happier than you were the morning of your winnings? According to a recent study, probably not.
A study by Swedish economists followed ~3000 lottery winners 5-22 years after their winnings. They found that while the winners’life satisfaction had increased, their happinesshadn’t.
What’s the difference?
Life satisfaction equates to your overall quality of life. No debt? Mentally and physically healthy? Sustainable income? These are indicators of a high life satisfaction. Happiness, however, is different. Happiness is the range of positive emotions you experience on a daily basis.
Here are two examples:
High life satisfaction, low happiness: my friend Carl lives in a penthouse in Buckhead, owns a stable of Porsches, and like a lottery winner, doesn’t have to lift a finger (his finger-lifting assistant is well-compensated). His satisfaction is high, but because he’s already bought everything and lacks drive, the daily happiness he feels is low.
Low life satisfaction, high happiness: my friend Sahti drives a tuk-tuk taxi in Varanasi, India. Some days, he doesn’t get a fare, and as a result his family doesn’t eat. But Sahti is bursting with gratitude, love, purpose, and contagious joy. He has low life satisfaction, but high levels of daily happiness.
Unsurprisingly, lottery winners have high levels of worry-free, life satisfaction. But why aren’t they happy? One reason could be hedonic adaptation. They’ve become adapted to things they wanted so they want more, and are stuck on what psychologists call the hedonic treadmill: always chasing the next dopamine hit without finding lasting fulfillment.
This is why a 1978 study following lottery winners and paralyzed accident victims found that both groups returned to their previous levels of happiness within 6 months.
Worse still, becoming an overnight billionaire can disrupt your flow of needs. Relationships, anonymity, motivation, all can be threatened by extreme wealth. Just ask the dozens of billionaires who’ve paid millions to stay off the Forbes Richest list.
So rather than buying a private island next to Johnny Depp’s, how should you convert $1.6 billion to maximize your happiness? Perhaps you should spend it like Canadian lotto winner Rachel Lapierre, who spent 100% of her winnings on others.
“It’s nice to have a new car, a new home, a new everything. It can really be fun, but you don’t need that to be happy.”
I’m a professional speaker and business author helping companies build happier cultures.