Good news! How winning the lottery won't ruin your life

The myth of the doomed lottery winner, cursed to a life of misery after coming into a windfall of money, is well known.

But not to worry! Should you hit that one-in-several-billion chance to win the big dollars, the myth isn't true and your life won't be ruined, at least according to several former lottery winners and other experts.

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However if you do win – and remember the chances are infinitesimally small  – you might not be quite as set for life as you think.

The Cost of Living talked to a Lotto Max winner to understand the facts and fiction behind getting a big windfall.

What it feels like to win a multi-million dollar jackpot

Randall Rush, of Lamont, Alta., won a $50-million Lotto Max jackpot back in 2015.

"I woke up and it was a Saturday morning," Rush recalled. "I ran my cat out of food which is not a good thing [since] he's a 28-pound Maine Coon."

"It was the very last ticket in the stack," said Rush, "it just lit up on the screen [saying] it appears you've won fifty million dollars. And I went, Oh my! And I just remember turning the lock on on the door and turning to the open sign to closed."

Rush didn't work at the store. He just wanted to make sure nobody interrupted.

"That's the only thing I really remember and then we phoned it in and the adrenaline rush is pretty intense. You could literally die of a heart attack."

Rush says it took about two years for his emotional high to die down.

Winning comes with major drawbacks

While the $50 million jackpot allowed Rush to immediately retire from his job as a heavy equipment salesman, he felt it also made him a marked man in some respects.

The same year Rush won the lottery he invested millions in a tech startup launched by the son of his then-best-friend. The relationship went south soon after and Randall ended up taking his business partner to court.

Rush has co-authored two books about his negative and positive experiences winning the lottery. The first is called Bloodsuckers, which perhaps tells you how he felt about the experience.

Despite that negative experience, Rush is adamant that winning the lottery remains a positive experience for him — and that it most definitely did not ruin his life.

Debunking the curse of the lotto win

The idea that lottery winners wind-up emotionally broken and financial broke traces back to two sources.

One study published in 1978 talked to a small sample of 22 lottery winners about their everyday happiness.

When compared to a group of traumatic accident survivors and a control group of everyday people, researchers found the lotto winners weren't much happier. 

This study helped plant the seed of the depressed millionaire. 

Years later, in 2001, the US-based National Endowment for Financial Education talked windfalls with a panel of experts.

One of those experts apparently said 70 per cent of lottery winners end up bankrupt and that unverified statistic was widely reported.

It was repeated so often the National Endowment put out a press release in 2018 telling media to stop attributing that number to the NEFE because it's just not true. 

If I had a million dollars … it's not enough

If winning the lottery won't ruin your life, it's time to get out your calculator to determine how much money is enough to settle you for the rest of your life.

According to Tim Cestnick, a Toronto-based financial planner and CEO of Our Family Office, one million dollars isn't enough.

"It used to be that a million dollars … 20, 30, 40 years ago was enough," said Cestnick.

"Today it's still a lot of money of course, a million dollars is not easy to come by. But for most people it's not going to be enough to look after yourself for the rest of your life."

Over the years, Cestnick has worked with a number of Canadians who have come into major windfalls, whether through lotteries, inheritance or just savvy business practices.  

The Cost of Living asked the financial planner to do some quick back-of-the-napkin math, based on a fictional 40-year-old Canadian who earns approximately $71,000 per year and spends most of those earnings annually.

"You know a general guideline is to take your income multiply it by 30," said Cestnick. "It's not perfectly accurate but it's not far off when you do most of the math."

According to Cestnick, if you had about $70,000 per year in income, you'd need more than $2 million to provide you with that level of income for the rest of your life.

However if you plan to improve your lifestyle by spending more money in the years after you win the lottery, then you'll need to set aside even more.

Advice for Canada's newest multi-millionaire

"As tough as it may be, just get out of dodge right away," said Rush, who suggested heading to a resort.

But the lottery winner also had some cautionary words.

"Don't think your life won't change, because whether you like it or not your life has changed. You can't go back to your job. You see a lot of people say, 'well you know it's just business as usual.' No, sorry, it doesn't work that way and you need about a year for the dust to settle."

Written and produced by Tracy Fuller.
Click "listen" above to hear the segment, or download the Cost of Living podcast.