Whilst lottery winners may become quite impulsive with their money after winning the jackpot, according to a new study by the National Bureau of Economic Research, Swedish lottery winners invest their winnings sensibly. The Swedish winners actually conform to economic theory of how people should behave after receiving a financial windfall and instead of splurging, they wisely invest in low-risk bonds and spend the money slowly.
This life-long income boost and relief of financial stress is believed to explain why the Swedish winners remained happy years after winning the lottery. So it turns out that money can indeed be key to happiness, as long as you invest and spend wisely.
Tips for lottery winners
Private bank and wealth manager Coutts offers some tips for lottery winners, to keep their feet on the ground after a big win, just like the Swedes:
- Slow it down: before making decision about how to spend the winnings, take a break and let it sink in. Coming to terms with the change in circumstances and getting a good grasp on what you really want to do with the money is important early on
- Think carefully about going public: it’s up to you whether you stay anonymous or want to allow the lottery company to release your name. Remaining anonymous might seem the natural choice, but the anxiety of keeping such a significant secret can outweigh the advantages of privacy for many winners
- Understand how much you have: what may seem like a fortune can quickly diminish after spending on property, cars and some long-dreamed of luxuries. Also, the urge to be generous is strong but needs to be moderated by how much you can actually give
- Get help: even people who have spent their lives surrounded by wealth appreciate the guidance of wealth experts including long-term financial needs, benefits for the family, and charitable giving