One lucky person in South Carolina has finally emerged as the winner of the astounding 1.537 billion-dollar Mega Millions jackpot. Research, however, shows that this person might not be so lucky after all.

The jackpot of the Mega Million grew to be so large after no winner had emerged after 25 consecutive drawings, making it the second-largest jackpot in the world. The first one being the jackpot of Powerball, which hit $1.6 billion in 2016. At first, it was estimated that the Mega Million jackpot would also hit $1.6 billion, but once the tickets were tallied the total went down.

The odds of winning such a jackpot are 1 in 303 million; in other words, it is nearly impossible. For example, you’re about 300 times more likely to get struck by lightning or 40 times more likely to get eaten by a shark (even if you’ve never been to the ocean). Despite that, people keep on playing, because what they are purchasing is the hope of becoming rich.

But what happens when a winner finally emerges? What happens to all that money, and, more importantly, what happens to the lucky winner? The answer may surprise you.

The prize is smaller than it seems

Regretfully, the winner will not be able to receive all of his or her jackpot money. First of all, the government will take 24% of your money even if the state that you are from doesn’t have a lottery tax. South Carolina, however, does have a lottery tax, which means that the lucky winner of that incredible Mega Million jackpot received only 69% of the total sum.

Furthermore, when you win a jackpot, you can’t immediately receive all the promised money. If you want the money immediately, you will get only 57% of it. If, however, you are content to receive it in annual payments over the next 30 years, you will get all of it – minus the tax, of course.

This means that the winner from South Carolina received only $606 million if they asked for the money to be transferred to them immediately. Which, to be honest, is still an insane amount of money.

You won the lottery! But how will your life change?

Many people dream of winning a lottery, yet usually, they don’t think about how it will affect their lives. Research shows that while the life of a lottery winner certainly does change, it is not always for the better.

Statistician Donald Rubin and economists Bruce Sacerdote and Guido Imbens showed in a paper published in 2001 that on average big lottery winners retain only 16% of their winnings after 10 years. Usually, when a person in their 20s or 30s is given a large financial gift or inheritance, they quickly lose about half of their money by making poor investments and going on spending sprees.

Another study by Scott Hankins and Mark Hoekstra published in 2011 showed that winning a lottery does little for financially distressed people. Whether they win a small amount or a large prize of $150,000, it only postpones their bankruptcy rather than prevents it. The hard truth is that in general, one-third of all lottery winners go bankrupt.

Spending all of your jackpot money is hard work!

It is not as easy as it seems to spend hundreds of millions of dollars, even if you have a lifetime to do it. According to demographic research, the average age of lottery winners is between 30 and 39 years old. This means that with an average life expectancy in the US being 79 years, a person will have roughly 45 years to spend their jackpot money. If, for example, the jackpot was $900 million, then a person will have to spend roughly $20 million per year or $55,000 every single day!

Furthermore, to truly blow through your money, you have to spend it on experiences alone. When you buy assets, such as luxury homes, your wealth remains largely intact if the value of those assets remains constant. Thus, when a person goes bankrupt after winning a lottery, they have to spend it all with nothing to show for it in the end.

From riches to rags

Spending hundreds of millions of dollars within a lifetime may be hard, but not impossible, as demonstrated by Huntington Hartford.

Hartford was born in 1911 and was the heir to the world-famous Great Atlantic & Pacific Tea Company. More commonly known as the A&P supermarket chain, this company was founded even before the Civil War. And from WWI until the 1960s it was as popular as Walmart is today.

When Hartford was just 12 years old, he inherited $90 million (after taxes), which is an astounding $1.3 billion, once adjusted for inflation. Yet despite receiving one of the biggest fortunes, Hartford declared bankruptcy at the age of 70.

You could say that Hartford was the unluckiest man in the world. He spent millions on real estate, art museums, theaters, and shows, yet his exceptionally poor business skills made him lose it all. So after leading a lavish lifestyle for most of his life, he went bankrupt and lived out his days in the Bahamas in almost complete solitude.

Learn from other people’s mistakes

All the academic research, as well as anecdotal evidence, shows that winning a jackpot will not guarantee a happy ending. Wasting huge amounts of money is all too easy. Thus, if you get lucky, it is important to keep a level head and learn from the mistakes of others. It takes a lot of luck to win a jackpot, but you need even more luck not to blow it all away.

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