What would you do if you suddenly came into a large amount of money? Would you upgrade your home and invest the rest, putting just a little aside to build a shelter for orphaned orang-utans, just as you once said you would? Actually, you're far more likely to drive a succession of sports cars into swimming pools — a visual representation of the proverbial car crash your life is likely to become as you fritter away your cash bonanza.
A study at Vanderbilt University in the US found that lottery winners who won substantial sums were 50 per cent more likely than winners of small amounts to be bankrupt within five years.
"Winning the lottery seemed to do little to help lottery winners ease their debt," said Paige Marta Skiba, one of the researchers behind the study.
"Our results are consistent with some winners using their prize to take additional risks or buy expensive luxury goods. Others seemed to simply lack the knowledge to handle large amounts of money wisely."
This isn't true of everyone, of course, and just as there are different ways of coming into money, there are myriad ways of handling instant wealth. Here are just three stories.
"Having money makes parenting teenagers more complicated"
Peta*, 42, became a multimillionaire six years ago following the sale of her thriving small business.
"It's how funny how we tend to sugar-coat everything the further we move away from our true memories of them. If you'd asked me how things were going back when the kids [Peta has three teenagers with her husband] were little and I was struggling with maternity leave, I probably would have just cried and showed you my bills. But now I remember it as one of the best times in my life, even though we had nothing. Believe me, the irony isn't lost on me.
A lot of unwanted publicity came with the sale of the company and nothing could have prepared me for the associated fallout. I think we're all guilty of thinking about the positives of coming into money — buying a nice house or being able to travel, for example — but no one really talks about the negatives. Overnight, I had more money than I ever could have dreamed of having and we were able to buy the kind of house we'd always hoped for, but I suddenly had this huge feeling of responsibility too, a constant internal voice asking me questions like: How much should I give to charity and which ones? Should I give money to friends and family, and how much?
You assume all the money noise stops when you finally have it, but it doesn't: it's just a different soundtrack.
The requests for handouts have settled down in recent years but it was tough in the beginning. What surprised me was just how many acquaintances and people I hadn't heard from for years came out of the woodwork.
The hardest one was a call from the father who walked out on me when I was very little. He'd heard about the money and wanted to know what I'd be doing to look after him in his old age. I wish it could say it made me happy when I told him he'll never get a cent out of me, but it just made me sad.
We couldn't make head nor tail out of anything for the first few years after the money came in, but life has fallen into its own rhythm since. Obviously we don't suffer any common stresses, such as meeting mortgage payments or paying school fees, but if we have a problem it's trying to work out how best to raise our kids into adulthood without them becoming spoilt brats who think they're entitled to whatever they want.
I once read that [chef] Gordon Ramsay isn't going to leave a cent of his money to his kids out of fear it will ruin them. Maybe that's the answer. Maybe I'll have to leave it to my cat. I certainly threaten them with it enough!"
"My parents worked hard to ensure my inheritance wouldn't destroy me"
Already with a high-paying career, Harvey*, 28, increased his personal wealth by millions when he inherited family money last year.
"When you're born into a wealthy family, money is not something that's ever really talked about. You know you have a large house, but it doesn't seem all that strange because so many of your friends too do too. And aside from catching sight of the odd piece of paperwork with a staggering number of zeros printed on it, life rolls on like it does for anyone else.
Most of my childhood memories are much like anyone else's: babycinos with Mum at the cafe; playing in the park with Dad; fighting with my brothers and sisters. It's only now that I realise that not having to talk about money might have been the biggest giveaway [that we were wealthy], but kids don't really think about that stuff.
I always knew I was going to come into an inheritance from my grandfather one day, but my parents, determined that we wouldn't be the kind of kids who just coasts through life, worked hard to instil us with the right values. Pocket money and even money for the school canteen had to be earned through jobs around the house and at the age of 14, I got my first job waiting tables in a cafe before taking up bartending work to pay my way through university.
The idea was that we should be motivated by personal success rather than by money. I ended up becoming a lawyer and although I earn six figures now, I can honestly say I do what I do because I love my job.
When the money hit my account, it made little difference to my life. I'd already purchased my own home through the money I'd worked hard for and saved, and aside from paying off a small credit card debt, I haven't touched any of it.
Sure, I could become the person who drops big everywhere I go, but what kind of person would I eventually become? Although most of us don't realise it at the time, there's something about the smaller things we all have to do — having crappy supermarket meals because rego is due, or sharing
a space with a roommate — that builds character. You miss all that and you miss a large part of regular human development — and who wants to be that guy at 50?
Some of my friendships have fallen apart since I received my inheritance and that's been difficult to process. Some quickly fell into a pattern of insisting I pay for everything 'because you're rich', and others began seeing me as a meal ticket and I've had to change my approach to the way I conduct my relationships.
It helped sort the grain from the chaff but for anyone in my life, the rules are the same: everyone pays their own way. Will I tell new friends or people I'm dating about my real financial position? Ha! There's not a chance in hell."
"Money is nice, but it doesn't have to change your life"
It was third time lucky for health worker Lily*, 46, when she won just over a million dollars in Tatts Lotto earlier this year.
"What I remember most vividly about that day is the pacing. When you read the email alerting you of your win, you first assume 'scam'. But then, as you check and recheck your numbers, you go into autopilot and let yourself slide into an alternate universe where everything looks the same, but a weight you hadn't really noticed until now has been lifted.
I paced the floors until my partner came home and I pulled myself together enough to casually asked him if he could check our numbers. When he started screaming, I knew life had changed for us, but probably not in the way that you'd think.
I've always had a strong work ethic and I think that's largely due to my background. Growing up in a housing commission home, I watched my immigrant parents slog it out to give me and my siblings a good life. But it meant I also learnt the value of a dollar and the importance of putting most of it aside for a rainy day.
I'd won smaller amounts before — $12,000 here and $3000 there. By the time I won big we had a small mortgage but were financially comfortable because we'd never been frivolous with our cash.
Often when people think about winning Lotto, they think about what they're going to buy. But we
were lusting after a better work-life balance, so we simply quit our full-time jobs and moved into casual and part-time roles. We're not interested in stuff — we still drive our old cars around and, aside from one super-sturdy Ikea dinnerware set, I haven't cared to purchase anything else — but the idea of having more freedom to spend time together and enjoy life is intoxicating.
I know that doesn't sound particularly exciting, but what can I tell you? I've always been happy with what I've got.
When you come into money, some people around you can change. But in my experience, those people are a minority. We've given money to some friends and family, and each week I give set amounts to charities which have captured my heart. But the best way to describe life with my friends and family today? With 90 per cent of them, I'd say it's business as usual.
We haven't changed the way we live our lives so I think most would feel foolish asking us for handouts if we haven't offered. Besides, I'm playing Tatts Lotto again in the hope that if I win again, I'll be able to give everything to those closest to me. And believe me, you never quite forget how the people around you behaved the first time around."
* Names have been changed.
Thanks to dannyct for the tip.