There was a study done in the US in 1978, at
. They looked at the happiness levels of lottery winners and paraplegics (people paralyzed from the waste down), to see who was happier over the year after that event, and obviously the lottery winners were happier.
Just kidding…
(They were the same.)
Let’s back up. How on earth can someone that gets paralyzed from an accident be just as happy as someone who wins millions of dollars?
This is called Impact Bias and what it means is that people have a common tendency to overestimate how happy or sad an event will affect them.
And… it happens ALL THE TIME. Stress out over work, or an exam, or something that turns into… nothing. You might not even remember it because it turned out to be nothing. Or what about last time you were looking to buy a car or holiday and thought it would be your happily ever after? Is it still?
This is because, we have a tendency to focus on the thing that changes and forget all about the things that don’t change. When thinking about winning the lottery, we imagine that event and all of the money that it will bring in. But we forget about everything else and how it stays the same.
Here are some examples:
We still have unpleasant or rude people to deal with.
We get grumpy if we have bad sleep.
We are annoyed when we have to sit in traffic, especially if you could afford to take a private jet anywhere.
We still have to exercise if we want to stay physically healthy, because our bodies’ fitness doesn’t care about how much wealth you have.
What’s more, there are some serious troubles that lotto winners have, where they struggle. This includes:
They report feeling like they can’t complain to anyone, because people dismiss their troubles saying things like, “yeah yea, it must be hard being a millionaire”. It sounds small, but imagine if you had to live the rest of your life without being able to vent once in a while.
They also struggle with little decisions like, “should they always pay for a bill when going out to eat or entertainment?”
Who should they tell and who should they not?
What should they do with the money, invest it, what is smart to do?
They might have more free time, but that doesn’t mean their social group does. It’s great if you can go anywhere any time, but it’s a bummer if all your friends are still stuck in their jobs from 9-5 every day.
There’s also a breakdown of trust in others. Any time they make new friends, they feel insecure about if those people want to be their friends for real, or just want money.
Then there’s also the fact that people ask for money. Afterall, you have plenty, but what if they keep coming back over and over and again. What if you give money to one friend, but not another, and then they all find out?
And while winning $1 million can make new pleasures available, it may also make old pleasures seem less enjoyable.
Winning the lotto is a reminder of what money can’t buy: youth, time, self-control, self-respect, friendship, love.
There are lots of ways having a lot of money all of a sudden can make things uncomfortable.
There’s another reason that it’s not all sunshine and rainbows, and it’s because of a lack of self-actualization. It’s easy for people to tell themselves “if only” tales, saying things like “I’ll be happy when I’m rich” or “If I had money all my problems would melt away”. But how hard would it be to come to grips with reality when you have the money, but still aren’t happy?
When faced with something that confronting, who do you blame? Before you won the lotto you had excuses for not being happy and fulfilled, but afterwards, the reasons you used to tell yourself are no longer true. That’s a lot of cognitive dissonance to reconcile.
Now let’s look at the other side, becoming a paraplegic and dealing with being paralyzed.
No one wants that. When a Harvard University study asked people who had full use of their limbs without any physical disability, some people responded that they would dead than never be able to walk again.
That’s pretty extreme.
But what do the data show? Well, when people actually suffer a traumatic event like becoming a paraplegic their happiness levels are nearly exactly the same six months later compared to the day before their accident.
People have the same level of happiness from before they were paralyzed compared to afterwards.
Why?!
How is that even possible?
Well, there are some values that a huge number of humans have in common. Things like, connection, fulfilment, experience, freedom, security, love and when you are paralyzed, you tend to see how great those things are in your life.
Imagine if you spent more time with your loved ones, had them tend to you in ways that they previously didn’t, shared with them deeper thoughts and views on the world. What if you developed resilience and effective coping mechanisms, focused on what you can control, set realistic goals, and find purpose in life beyond physical abilities? What about spending less time on menial work or jobs?
If you had a positive outlook on life, emphasizing gratitude for what you still have and found joy in small victories, personal growth, and the ability to appreciate life’s simple pleasures.
How’s that sound?
Ok, now remove the use of your legs, and that’s what you’re left with.
Many paraplegics report those things. In some ways, their values are more clear and they enjoy their lives more than they imagined they would, despite the paralysis or condition (again, that’s the impact bias).
This is not to make light of the tragedy of becoming a paraplegic, or saying there aren’t losses that occur. The purpose of this video is to demonstrate that having tons of money doesn’t necessarily solve your problems and often times, it can make things more difficult and complex.
If we compare the happiness of lotto winners to paraplegics we can see that they go in opposite directions at first, but then they reverse and meet in the middle. That’s how happiness tends to work for humans. So happiness isn't quite what we expect it to be when it comes to paralysis and winning lotto.
Today’s takeaways are simple:
1. If you are waiting to get a big chunk of money to fix your life, stop waiting. You are in charge of your life and money won’t solve those problems, it will just transform your problems into new ones.
2. All the things that bring happiness to paraplegics are available to you right now. You can start living your life in the same way by prioritizing things that increase happiness. If you don’t know what increases happiness, the video we have called Happy Money might be of help.
One of the best ways to summarize this concept is:
“When you realize nothing is lacking, the whole world belongs to you” - Lao Tzu
Our goal at Irvine Wenborn is to help people live better lives by improving their decision-making, and we do that through a financial lens so if you enjoyed this video, feel free to reach out or share it with someone that you think would find it interesting or useful. You can find us at our website, email, or on socials.