It’s Christmas Day 2002 and across the state of West Virginia people are spending money like it is going out of style. But, instead of gifts or eggnog, what are they buying? Lottery tickets.
At 3:26 pm the ticket buying frenzy peaks with 15 people buying a $1 ticket EVERY. SINGLE. SECOND. Tick. Tick. Tick. 45 new hopefuls catch the lottery fever.
Jack Whittaker was one of these hopefuls. He doesn’t play the lottery normally, but with over $100 million at stake, how can he say no? Jack buys his ticket and heads home to see Jewell, his wife of 40 years.
At 11pm that night the winning Powerball numbers are announced. Jewell wakes up Jack who had fallen asleep. It’s a miracle. They got 4 out of the 5 numbers correct.
It’s not the jackpot, but they both know a six figure payday awaits them as they head to sleep.
The next morning Jack turns on the TV before heading to work and makes a startling discovery. One of the numbers from last night’s drawing was announced incorrectly. Jack checks his ticket and is speechless.
He has just won the largest lottery jackpot (for a single ticket) in American history — $314 million.
But you already know this story doesn’t end well, don’t you?
Within 2 years of taking the $113 million lump sum after taxes, Jack’s granddaughter is found dead (likely from a drug overdose), his wife is estranged, and Jack divides his time between high roller gambling, propositioning random women to have sex for money, and driving intoxicated.
As time went on, Jack would eventually lose all his winnings.
I already know what you’re thinking, “Oh Nick, another story about a lottery winner gone wrong. How original.”
Well, there’s one small detail I left out about Jack Whittaker — he was already rich.
That’s right.
Jack Whittaker had a net worth greater than $17 million before he ever bought the ticket that would change his life forever. How did he get wealthy? He was a successful businessman as the president of Diversified Enterprise Construction, a contracting firm in West Virginia.
I tell this story because it illustrates how even those with the best intentions, the best background, and the best judgment can succumb to the life-altering effects of money. Jack Whittaker wasn’t a bad man. He supported his wife and granddaughter, he went to church, and he donated tens of millions immediately after winning the lottery to start a non-profit foundation.
Yet, even he couldn’t shake temptations wings when they presented themselves.
So, what can we learn from this? It can happen to anyone.
History is riddled with investor after investor who couldn’t quit while they were ahead and eventually ended in ruin. Jacob Little, Jesse Livermore, Isaac Newton, Mark Twain, shall I continue?
Just read Big Mistakes and let the evidence suffocate any doubt you have left.
But the bigger question remains: Why does it happen to so many people from so many different backgrounds?
It’s because of biology. It’s because we’re human.
Neuroscientists have found that the same area of the brain activates when someone is on cocaine or winning a lot of money.
Capital gains is a hell of a drug. So don’t forget your humanity if you ever get a large windfall. You may think it is easy to resist, but the record of history suggests otherwise.
The Changing Mirror
I wish I could tell you with confidence that if I were ever placed in a situation of extreme power or wealth that I would be able to retain my sense of sanity and self, but, unfortunately, I don’t know. As one of Anthony Bourdain’s tattoos states:
I am certain of nothing.
The problem with thinking we can resist temptation is that we have no information on what it actually feels like to be in that situation.
It’s outside of our realm of experience. It’s beyond all expectations.
As a result, our ability to imagine how we will react is faulty. For example, while I can say with high certainty that I can resist heroin in my current state, I can’t say with certainty that I can resist heroin if I am already on heroin.
The issue presents itself when we only model things within certain limits. Just like those who worked on The Challenger before it exploded, they only tested the O-rings within a certain range of temperatures.
Outside of the normal range and things can start to act abnormally. The same is true for people and how they can react to winning large amounts of money in a short period of time.
This all happens because you and I are not a static beings. You will react to circumstances and your behavior will morph and shift with the chemicals surging through your brain. You will become someone else. The mirror will change.
If it happened to Jack Whittaker, who went from a church-going man to one who once stated, “I have more money than God,” then it can happen to anyone.
Thank you for reading!
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This is post 76. Any code I have related to this post can be found here with the same numbering: https://github.com/nmaggiulli/of-dollars-and-data