I recently read an article on The New York Post website about a guy name Jack Whittaker who in 2002 won the $314 million dollar PowerBall lottery and opted for the one time lump payment of $93 million. Ruined him. Everyone wanted money from him. Lost friends. Could not trust anyone. His wife left him. Hung out at strip clubs. Drank like a fish. Ugly. The interesting thing was that he was already a very successful entrepreneur before he hit the big jackpot. Kinda goes back to the benefits that come from hard work.
So this made me think, “Would I remain frugal if I won the lottery?” I like to think I would. Sure I would upgrade some things. Pay off the car and house. Maybe take the family to Europe in a couple years. But real frugality is a choice to conserve, not done because of situation. I know many people that started frugal because of circumstance and stayed that way when they came out of debt because it provided intrinsic satisfaction. Priceless. I also believe if you have a disposition towards frugal living, charity, and helping others then you would remain that way if you won a huge sum of money. Winning a ton of money would seem to make you more of what you already are. If you are decent, humble, frugal, and generous it makes you more so. Likewise if you are irresponsible, immature, and wasteful. With that said, I would welcome the opportunity to test my theory. I have a PayPal account. Any takers?
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Tags: Frugal Living10 Comments
10 responses so far ↓
I too have a PayPal account, Kyle. And I’m willing to help you test your theory. Feel free to send over a few million and I’ll put the frugality to a test…
And I agree with your theory. It’s all dependent on your predisposition. Would I still clip coupons to save 50 cents on a box of cheerios at the local grocery store if I had millions in the bank? Probably not. But I wouldn’t be rushing out and buying the most expensive gourmet cereal either. I’d still look for bargains where I could, but the “intensity” of my frugalness would probably be a bit lessened.
Andrew, sure I will throw you a bone if I get any takers.
Good point on the “intensity” factor, I think it also has to do with the time it takes to save money when clipping coupons, price comparing,etc. If I were financially set for life I think I would use my time a little different.
It’s an interesting situation, and it’s not just limited to the lottery. You could also receive a sizeable inheritance or it could just be your annual tax refund. How you treat money now won’t change much if you receive a lump sum at some point.
Also, nice blog.
Thanks limeade and yeah good point, it could be any windfall of money, not just the lottery.
I occasionally spend a bit of time planning for my upcoming lottery win so I think that if I won a ton of money I would be able to plan how much income we could derive from the winnings and live appropriately.
I’m not sure if frugal is the right word but I think that living financially sensibly means that you live well within your means. Ie if you have $10 mill in the bank - you can probably spend 5-6% of that each year without much danger of running out, but going out and spending half of that on a mansion is not being prudent.
Mike
Thanks for the comment Mike, That would take some dedication and a good prediposition to budgeting and smart spending to do the 5-6% a year thing. I like to think I could do that though…
I’ve thought about this a lot too. I think I would be like you and upgrade a bit (pay off mortgage, travel a bit more, and help my mother retire early) but I wonder. Money never made anyone a better person. You are who you are regardless of what your financial situation may be. It does make things easier too. However, I think there may be some benefit from having to ‘work’ harder for your joy. If I had millions of dollars I may never want to make homemade Christmas cookies with my girl again so that we could deliver them to the neighbors. Of course, these are the same neighbors I would enjoy moving away from if I had lots of money.
Jenny, LOL, I give you credit for delivering Christmas cookies to neighbors you could do without! And I agree with you that the benefits of working for what you receive is very powerful. Thanks for stopping by and commenting.
We won the “lottery” about 7 years ago, when my husband’s stock options went through the roof. We made enough money to retire in our 40s and never work again.
We remain frugal and financially conservative. So, yes, it does happen.
BTW, I am a regular reader and commenter on many financial blogs and don’t really want to share the info that I have tons of money, so I am posting this under a pseudonym. It is a sad but true reality that people do treat you differently if they think you are rich…
Lynn, thanks for the post! Very nice to hear a real story of someone who came into wealth and did not let it change their core values.