1
00:00:00,000 --> 00:00:03,700
Hello and welcome, you are 
listening to Patrick boil on 

2
00:00:03,700 --> 00:00:07,800
finance a podcast, exploring 
ideas, from quantitative Finance

3
00:00:07,800 --> 00:00:11,700
examining events occurring in 
markets right now and financial 

4
00:00:11,700 --> 00:00:15,100
history to see what lessons can 
be taken away including 

5
00:00:15,100 --> 00:00:18,000
interviews with some of the most
interesting people in the world 

6
00:00:18,000 --> 00:00:22,400
of Finance to learn more about 
the podcast visit on finance 

7
00:00:22,400 --> 00:00:30,200
dot-org. 
Michael Carroll was in Lish 

8
00:00:30,200 --> 00:00:33,700
garbage collector, who won 10 
million pounds in the UK 

9
00:00:33,700 --> 00:00:38,500
national lottery in 2002 that 
would have been worth around 20 

10
00:00:38,500 --> 00:00:42,000
million dollars. 
At the time, he became a tabloid

11
00:00:42,000 --> 00:00:45,900
newspaper celebrity for a while 
and was known as the king of the

12
00:00:45,900 --> 00:00:51,300
chavs, there was even a TV movie
made about him in 2006. 

13
00:00:51,500 --> 00:00:54,900
In an interview shortly after 
his Lottery Win. 

14
00:00:55,200 --> 00:00:58,900
Carol said that he would not be 
tempted into spending his money 

15
00:00:58,900 --> 00:01:03,500
lavishly And the only wanted to 
buy a three-bedroom House near a

16
00:01:03,508 --> 00:01:08,100
lake where he could go fishing. 
That sounds like a good plan but

17
00:01:08,100 --> 00:01:10,900
it's not exactly the way things 
worked out. 

18
00:01:11,100 --> 00:01:14,300
You don't usually get nicknamed,
the king of the chives, while 

19
00:01:14,300 --> 00:01:19,000
fishing quietly, at a lake. 
Carol quickly developed a taste 

20
00:01:19,000 --> 00:01:23,300
for drugs alcohol and partying 
in 2005. 

21
00:01:23,300 --> 00:01:27,700
He was given 240 hours of 
community service after it was 

22
00:01:27,700 --> 00:01:31,700
found that while drunk he had 
been Catapulting steel balls 

23
00:01:31,700 --> 00:01:36,300
from his Mercedes van at parked 
cars and Shop Windows, you're 

24
00:01:36,300 --> 00:01:39,700
not meant to do that. 
Almost any fisherman will tell 

25
00:01:39,700 --> 00:01:43,600
you that catapulting steel balls
from a van will scare the fish 

26
00:01:43,600 --> 00:01:46,100
away. 
It was noted in court that he 

27
00:01:46,100 --> 00:01:52,900
had accumulated 42 offenses on 
his record by 2006 in May 2010 

28
00:01:52,900 --> 00:01:56,200
less than ten years after 
winning the lottery, Carol 

29
00:01:56,200 --> 00:01:59,800
applied for his old job as a 
garbage collector again. 

30
00:02:00,100 --> 00:02:03,400
Telling the press that he had, 
no regrets about the way in 

31
00:02:03,400 --> 00:02:07,100
which he had spent his winnings 
in 2013. 

32
00:02:07,200 --> 00:02:10,900
He spent three months in a hotel
for the homeless after being 

33
00:02:10,900 --> 00:02:15,000
unable to find work. 
He's not the only lottery winner

34
00:02:15,000 --> 00:02:21,600
that ran into trouble in 2005. 
Roger and Laura Griffith, 11.8 

35
00:02:21,600 --> 00:02:24,600
million pounds on the UK 
National Lottery. 

36
00:02:24,800 --> 00:02:28,600
They bought a big house and 
Roger got to record an album 

37
00:02:28,600 --> 00:02:31,300
with the band he played with. 
It in University. 

38
00:02:31,600 --> 00:02:35,100
The interest alone on the 
couple's lottery winnings would 

39
00:02:35,100 --> 00:02:36,900
have earned the more than the 
median. 

40
00:02:36,900 --> 00:02:41,800
UK household income at the time.
Some bad investments in failed 

41
00:02:41,800 --> 00:02:46,500
business ventures, of course, 
followed in 2010, their house 

42
00:02:46,500 --> 00:02:51,900
even burned down, they ended up 
divorced and by 2013 just eight 

43
00:02:51,900 --> 00:02:56,700
years after the big lottery win,
Roger had just seven pounds left

44
00:02:56,700 --> 00:02:59,800
in his bank account Evelyn 
Adams. 

45
00:03:00,000 --> 00:03:03,700
Clerk in a convenience store, 
really beat the odds. 

46
00:03:03,900 --> 00:03:08,000
She managed to win the New 
Jersey Lottery Twice, first in 

47
00:03:08,000 --> 00:03:12,300
1985. 
And again, in 1986 collecting a 

48
00:03:12,308 --> 00:03:15,200
total of five point four million
dollars. 

49
00:03:15,600 --> 00:03:18,500
She was the first person in the 
history of the New Jersey 

50
00:03:18,500 --> 00:03:24,300
Lottery to win multiple million.
Dollar jackpot prizes by 2012. 

51
00:03:24,300 --> 00:03:27,900
Adams had spent all of her 
winnings, mostly gambling, her 

52
00:03:27,900 --> 00:03:32,000
wealth away, at the tables in a 
Atlantic City casinos and 

53
00:03:32,000 --> 00:03:36,300
squandering money on a string of
unsuccessful business deals. 

54
00:03:36,600 --> 00:03:40,100
Which included buying the 
convenience store that she used 

55
00:03:40,100 --> 00:03:44,200
to work for today, she 
reportedly lives in the trailer.

56
00:03:44,900 --> 00:03:48,500
We've all heard this type of 
story about how something like a

57
00:03:48,500 --> 00:03:52,200
lottery win which at first 
appeared to be a great blessing,

58
00:03:52,500 --> 00:03:55,100
slowly revealed itself to be a 
curse. 

59
00:03:55,400 --> 00:03:59,000
The downward spiral in these 
stories is usually brought about

60
00:03:59,000 --> 00:04:02,200
by a number of Actors like 
winners partying and 

61
00:04:02,200 --> 00:04:06,400
overspending investing their 
winnings, poorly, family and 

62
00:04:06,400 --> 00:04:10,500
friends asking for handouts or 
even that the winner becomes a 

63
00:04:10,500 --> 00:04:14,900
mark for criminals and con man. 
We learn in these stories that 

64
00:04:14,900 --> 00:04:19,000
for lottery winners life, 
without a job or responsibility,

65
00:04:19,000 --> 00:04:22,800
quickly becomes meaningless. 
They become distant from their 

66
00:04:22,800 --> 00:04:25,500
true friends and soon lose 
everything. 

67
00:04:25,700 --> 00:04:29,300
These types of scenarios. 
As we've just seen have all 

68
00:04:29,300 --> 00:04:33,800
played out Out for many lottery 
winners but despite the curse 

69
00:04:33,800 --> 00:04:36,800
that says winning the lottery 
will ruin your life. 

70
00:04:36,900 --> 00:04:40,900
A number of studies from around 
the world show that winning big 

71
00:04:40,900 --> 00:04:45,800
cash prizes often leads to Big 
increases in life satisfaction 

72
00:04:45,800 --> 00:04:51,100
over the long term, the lottery 
winners curse simply isn't true.

73
00:04:51,400 --> 00:04:55,200
So what does academic literature
say about the curse of winning 

74
00:04:55,200 --> 00:04:59,500
the lottery? 
Well the 2018 and be e or paper 

75
00:04:59,500 --> 00:05:01,700
entitled. 
Total long-run effects of 

76
00:05:01,700 --> 00:05:06,600
Lottery wealth on psychological 
well, being led by researchers 

77
00:05:06,600 --> 00:05:08,900
with the Stockholm School of 
Economics. 

78
00:05:08,900 --> 00:05:14,700
Stockholm University and NYU 
studied 3000, Swedish lottery 

79
00:05:14,700 --> 00:05:20,900
winners, who had worn a combined
277 million dollars between five

80
00:05:20,900 --> 00:05:23,600
and twenty. 
Two years earlier, the 

81
00:05:23,600 --> 00:05:25,600
researchers asked them 
questions. 

82
00:05:25,600 --> 00:05:29,700
Like all things considered, how 
happy would you say you are? 

83
00:05:30,000 --> 00:05:33,100
And taking all things together 
in your life. 

84
00:05:33,100 --> 00:05:36,200
How satisfied would you say you 
are with your life? 

85
00:05:36,200 --> 00:05:40,400
These days, the participants 
reported being generally, more 

86
00:05:40,400 --> 00:05:44,800
satisfied with life. 
After winning the lottery large 

87
00:05:44,800 --> 00:05:49,100
Prize winners reported 
experiencing sustained increases

88
00:05:49,100 --> 00:05:53,900
in overall life satisfaction 
that persist for over a decade 

89
00:05:54,000 --> 00:05:57,100
and show no evidence of 
dissipating with time. 

90
00:05:57,100 --> 00:06:01,000
According to the researchers. 
What about Mental health and 

91
00:06:01,000 --> 00:06:05,600
happiness that according to the 
paper, no strong evidence was 

92
00:06:05,600 --> 00:06:09,000
found that a lottery winners 
ended up being happier in the 

93
00:06:09,000 --> 00:06:11,500
long run. 
But they did find strong 

94
00:06:11,500 --> 00:06:13,600
evidence. 
That the lottery winners were 

95
00:06:13,600 --> 00:06:17,200
more satisfied with their lives 
years after winning. 

96
00:06:17,600 --> 00:06:21,200
So what about the stories that a
lottery wins is strange the 

97
00:06:21,200 --> 00:06:24,100
winners from their friends? 
I think we can all. 

98
00:06:24,100 --> 00:06:28,100
Imagine how that might happen, 
where your newfound wealth, 

99
00:06:28,100 --> 00:06:31,100
makes your friends jealous. 
Or maybe you just find yourself 

100
00:06:31,100 --> 00:06:35,400
wanting to do new things that 
your old friends can't afford to

101
00:06:35,400 --> 00:06:39,800
do so you find new wealthier 
friends, friends who possibly 

102
00:06:39,800 --> 00:06:43,000
don't understand you the way 
your old friends did. 

103
00:06:43,000 --> 00:06:47,000
Well, a recent study from 
researchers at the London, 

104
00:06:47,000 --> 00:06:50,800
School of economics and Warwick 
Business School finds that 

105
00:06:50,800 --> 00:06:55,000
people who win more than 10,000 
pounds on the lottery end up 

106
00:06:55,000 --> 00:06:59,400
spending more time socializing 
with their friends and less time

107
00:06:59,400 --> 00:07:01,800
talking. 
Into Neighbors after winning the

108
00:07:01,800 --> 00:07:06,200
lottery, the research finds that
the more someone wins in the 

109
00:07:06,200 --> 00:07:08,400
lottery. 
The more new friends, they're 

110
00:07:08,400 --> 00:07:12,100
likely to make which they say, 
is consistent with the 

111
00:07:12,100 --> 00:07:16,700
complementary effect of income, 
on the strength of social ties. 

112
00:07:17,000 --> 00:07:20,700
The opposite is true with 
regards to social ties health 

113
00:07:20,700 --> 00:07:25,000
for More instrumental reasons 
such as talking to neighbors 

114
00:07:25,400 --> 00:07:28,400
winning more. 
And a lottery reduces the size 

115
00:07:28,400 --> 00:07:31,800
of an individual. 
Port Network and this is not 

116
00:07:31,800 --> 00:07:35,500
overly surprising. 
As wealthier people don't tend 

117
00:07:35,500 --> 00:07:39,500
to rely on their friends and 
family as much for support as 

118
00:07:39,500 --> 00:07:45,100
poor people, do the social ties 
that get broken are different to

119
00:07:45,100 --> 00:07:49,600
friendships their social ties 
that are primarily useful for 

120
00:07:49,600 --> 00:07:54,000
practical reasons and require 
little emotional investment. 

121
00:07:54,300 --> 00:07:58,000
These are apparently often 
substituted away with an 

122
00:07:58,000 --> 00:08:02,400
increase in income. 
According to a 2016 paper by 

123
00:08:02,400 --> 00:08:06,400
Bianchi and Voz higher, 
socioeconomic status 

124
00:08:06,400 --> 00:08:11,500
individuals, prioritize social 
ties that are not necessarily 

125
00:08:11,500 --> 00:08:15,100
valuable for resources. 
But instead for emotional 

126
00:08:15,100 --> 00:08:18,200
well-being, tests for 
robustness. 

127
00:08:18,200 --> 00:08:20,900
In the study found that average 
lottery. 

128
00:08:20,900 --> 00:08:24,800
Winner effects tend to be skewed
by the really big Winners 

129
00:08:25,100 --> 00:08:29,500
suggesting that small to 
medium-sized wins below 10,000. 

130
00:08:29,800 --> 00:08:34,200
Pounds or dollars are often not 
enough to change people social 

131
00:08:34,200 --> 00:08:39,000
ties in a meaningful manner. 
According to the paper increases

132
00:08:39,000 --> 00:08:43,600
in income can have a number of 
significant consequences on 

133
00:08:43,600 --> 00:08:47,200
social behavior. 
First day of an impact on the 

134
00:08:47,200 --> 00:08:51,800
resources available for creating
and maintaining social networks.

135
00:08:52,100 --> 00:08:56,100
Basically wealthier people have 
more time and money to socialize

136
00:08:56,400 --> 00:09:01,000
and so they socialize more. 
Secondly Increases in income 

137
00:09:01,000 --> 00:09:04,800
have the potential to influence 
social consumption, Which 

138
00:09:04,800 --> 00:09:09,400
lubricates social relationships 
essentially, as people's wealth 

139
00:09:09,400 --> 00:09:13,600
grows, they can better afford to
choose where to go and who to 

140
00:09:13,600 --> 00:09:18,100
spend time with and it's only so
surprising based on all of this,

141
00:09:18,300 --> 00:09:22,500
that lottery winners, spend more
time with close friends and less

142
00:09:22,500 --> 00:09:25,900
times with neighbors and 
acquaintances after their big 

143
00:09:25,900 --> 00:09:28,700
win. 
A vast, literature exists, 

144
00:09:28,700 --> 00:09:32,900
showing the strong A positive 
relationship between income and 

145
00:09:32,900 --> 00:09:36,200
good health, and a strong 
negative association with 

146
00:09:36,200 --> 00:09:39,400
mortality. 
The direction of causality, is 

147
00:09:39,400 --> 00:09:44,100
however more dubious, do people 
become wealthier because they 

148
00:09:44,100 --> 00:09:48,800
have good health to start with, 
or are wealthy people healthier 

149
00:09:49,000 --> 00:09:52,500
because their wealth by has 
greater access to resources like

150
00:09:52,500 --> 00:09:56,400
good food, gyms and Healthcare a
2002. 

151
00:09:56,400 --> 00:09:59,700
Paper called estimating the 
effect of income. 

152
00:09:59,900 --> 00:10:04,700
Health, and mortality using 
Lottery prizes as exogenous 

153
00:10:04,700 --> 00:10:09,700
source of variation in income 
found the lottery winners tend 

154
00:10:09,700 --> 00:10:15,600
to be healthier and live longer 
than on lottery winners, 2022 

155
00:10:15,600 --> 00:10:20,000
paper called income, Wind Falls,
and overweight evidence from 

156
00:10:20,000 --> 00:10:25,000
Lottery wins found that in the 
UK, a 1,000-pound lottery. 

157
00:10:25,000 --> 00:10:29,500
When reduces the risk of an 
individual being overweight. 

158
00:10:29,800 --> 00:10:33,900
Long, low educated individuals 
by four and a half to five 

159
00:10:33,900 --> 00:10:37,900
percentage points. 12 months 
after the lottery win, 

160
00:10:38,100 --> 00:10:42,600
maintaining a healthy weight. 
May of course, be a luxury good.

161
00:10:42,800 --> 00:10:45,900
The wealthy may have better 
access to Fresh Foods gym, 

162
00:10:45,900 --> 00:10:49,800
memberships and housing and 
healthy environment or hiring 

163
00:10:49,800 --> 00:10:52,900
come individually. 
Might moderate their weight and 

164
00:10:52,900 --> 00:10:56,400
strive to be healthier as they 
compare themselves to other 

165
00:10:56,400 --> 00:11:00,300
people who were in better shape.
But one way or Another. 

166
00:11:00,300 --> 00:11:03,800
According to this research 
Lottery winds, tend to be 

167
00:11:03,800 --> 00:11:07,800
correlated with better overall 
health, and a healthier body 

168
00:11:07,800 --> 00:11:11,200
mass index. 
So, why do we believe that 

169
00:11:11,200 --> 00:11:14,400
everything ends horribly for 
lottery winners then? 

170
00:11:14,800 --> 00:11:17,900
Well to start with, it might 
just feel good for people to 

171
00:11:17,900 --> 00:11:22,100
believe that great wealth which 
seems Out Of Reach will only 

172
00:11:22,100 --> 00:11:25,700
bring bad things. 
But in most articles about the 

173
00:11:25,700 --> 00:11:30,000
lottery winners curse, there's a
frequently cited statistics From

174
00:11:30,000 --> 00:11:33,500
the National Endowment for 
financial education, which 

175
00:11:33,500 --> 00:11:36,600
states? 
That 70% of lottery winners go 

176
00:11:36,600 --> 00:11:39,700
bankrupt just a few years after 
winning. 

177
00:11:40,000 --> 00:11:44,300
It's worth clarifying. 
That in 2018, the any, Fe came 

178
00:11:44,300 --> 00:11:47,900
out with a press release saying 
that those numbers were not 

179
00:11:47,900 --> 00:11:53,400
backed up by any research, a 
study looking at 35,000 Florida 

180
00:11:53,400 --> 00:11:57,600
Lottery winners, the craziest 
kind of lottery winners found 

181
00:11:57,600 --> 00:12:02,200
that only 6% of the code. 
Hard later filed for bankruptcy.

182
00:12:02,400 --> 00:12:07,400
That is a lot less than the 70% 
that is frequently reported the 

183
00:12:07,400 --> 00:12:09,800
Swedish study that I mentioned 
earlier. 

184
00:12:10,100 --> 00:12:13,100
Showed that most lottery winners
don't blow through their 

185
00:12:13,100 --> 00:12:15,700
winnings. 
And in fact, they usually don't 

186
00:12:15,700 --> 00:12:19,000
even quit their jobs. 
The researchers found that 

187
00:12:19,000 --> 00:12:21,200
people who want large sums of 
money. 

188
00:12:21,400 --> 00:12:25,200
Were typically, still wealthier,
10 years, after their win, 

189
00:12:25,500 --> 00:12:29,600
compared to people who wouldn't 
small sums of Money Lottery. 

190
00:12:29,700 --> 00:12:33,200
Jackpot winners do typically cut
down on the hours. 

191
00:12:33,200 --> 00:12:36,400
They work after the win but they
do this. 

192
00:12:36,400 --> 00:12:41,000
Mostly by taking a longer 
vacations, the Swedish study 

193
00:12:41,000 --> 00:12:45,400
only studied lottery winners who
wouldn't between 100,000 dollars

194
00:12:45,400 --> 00:12:48,900
and two million. 
There are prices that are much 

195
00:12:48,900 --> 00:12:52,100
larger than that around the 
world and really huge. 

196
00:12:52,100 --> 00:12:55,100
Prices might have really 
different effects. 

197
00:12:55,300 --> 00:12:58,400
The Florida Lottery. 
Winners study did find that 

198
00:12:58,400 --> 00:13:02,200
lottery winners in General was 
slightly more likely than the 

199
00:13:02,200 --> 00:13:06,400
average person to eventually 
file for bankruptcy but that 

200
00:13:06,400 --> 00:13:10,500
bankruptcy was still an unusual 
outcome for this group. 

201
00:13:10,800 --> 00:13:14,400
Interestingly the size of the 
Wind made no difference in the 

202
00:13:14,400 --> 00:13:18,700
probability of a lottery winner.
Filing for bankruptcy, it's 

203
00:13:18,700 --> 00:13:22,700
maybe not too surprising that 
people who played a lottery or 

204
00:13:22,700 --> 00:13:26,700
who gamble in general are more 
likely to go bankrupt and 

205
00:13:26,700 --> 00:13:30,900
average research shows that the 
bottom Three quintiles in 

206
00:13:30,900 --> 00:13:35,800
socioeconomic status, spent the 
most on lottery tickets and the 

207
00:13:35,800 --> 00:13:40,200
highest socio-economic group 
spent, the least, on the lottery

208
00:13:40,400 --> 00:13:44,400
Evelyn Adams, the woman who won 
the New Jersey Lottery twice, 

209
00:13:44,400 --> 00:13:49,600
before losing all of her money, 
allegedly spent $25 per week on 

210
00:13:49,600 --> 00:13:54,100
lottery tickets for several 
years before her first win. 

211
00:13:54,400 --> 00:13:58,500
After the first win, she upped 
her weekly spending to a hundred

212
00:13:58,500 --> 00:14:01,500
dollars per week on Do you take 
it before? 

213
00:14:01,500 --> 00:14:05,700
Winning again, the odds of 
winning the first jackpot were 

214
00:14:05,700 --> 00:14:11,900
worn in 3.2 million. 
The second one in 5.2 million. 

215
00:14:12,300 --> 00:14:16,000
I guess the true story is a 
little bit less exciting than 

216
00:14:16,000 --> 00:14:19,400
the one that most people 
believe, lottery winners. 

217
00:14:19,400 --> 00:14:23,000
Usually don't go nuts. 
Quit their jobs and blow all the

218
00:14:23,000 --> 00:14:25,600
money. 
They typically get healthier 

219
00:14:25,600 --> 00:14:29,000
Slimmer and use their Good 
Fortune to increase their 

220
00:14:29,000 --> 00:14:33,600
financial Security to take more 
holidays and to spend more time 

221
00:14:33,600 --> 00:14:37,100
with their closest friends. 
Thanks for tuning in to this 

222
00:14:37,100 --> 00:14:39,600
week's podcast. 
If you have a friend who you 

223
00:14:39,608 --> 00:14:43,700
think might enjoyed, please send
them a link, an extra special, 

224
00:14:43,700 --> 00:14:47,600
thanks to my patreon supporters,
who support makes this podcast 

225
00:14:47,600 --> 00:14:50,000
happen. 
Have a great day and talk to you

226
00:14:50,000 --> 00:14:51,400
again soon. 
Bye. 

227
00:14:52,200 --> 00:14:55,200
If you enjoyed this episode, be 
sure to subscribe. 

228
00:14:55,200 --> 00:14:57,600
So you're notified when a new 
episode is posted. 

229
00:14:58,000 --> 00:15:00,800
Thank you to everyone who has 
supported Ting this content on 

230
00:15:00,800 --> 00:15:03,200
patreon. 
If you enjoyed this content you 

231
00:15:03,200 --> 00:15:07,300
can find more like it on YouTube
on the Patrick Boyle on finance 

232
00:15:07,300 --> 00:15:11,100
Channel or follow us on Twitter 
at Patrick e boil. 

233
00:15:11,400 --> 00:15:12,700
Thanks for listening. 
Bye.