A study conducted by the University of South Africa showed that 70% of people who play the lottery dream of hitting the jackpot. Naturally, they also dream about what they would spend all of that money on. Some of the first things that come to mind include buying a sports car, a big house, starting a business, or going on a long vacation.
Nevertheless, when people find themselves in a situation where they actually won a lot of money, they usually end up spending it on something else. For example, 41,80% of lottery winners spend their money on more lotto tickets. On the other hand, less than 1% of them spend their winnings on a vacation.
To help you understand the difference in thinking between winners and potential winners, here is a table that shows the actual and potential spending of these two groups
Statement
Winners
Non-Winners
Purchasing household necessities (e.g. groceries)
67,70%
19,10%
Lotteries
41,80%
4,70%
Giving it to my spouse/partner/family
26,10%
11,10%
Paying debt/loan/bond/account
8,10%
14,70%
Entertainment/leisure
7,80%
3,70%
Purchasing luxury items (jewellery, cell phones, cars)
6,60%
10,10%
Payment of study fees
5,20%
14,40%
Purchasing fixed property (land/house)
4,30%
42,20%
Gambling (i.e. casino, bingo, etc., excluding lotteries)
2,90%
1,20%
Investing/saving (shares, bonds, money market)
2,90%
21,80%
Don’t know
2,70%
0,20%
Donating to charity
1,20%
13,20%
Starting a business
1,20%
21,10%
Traveling/holiday
0,80%
8,50%
As you can see, there are some notable differences in how lottery winners spend their prizes compared to how non-winners would want to spend their potential winnings. No matter how they chose to spend their prizes, 34,9% of SA lottery players noted that lottery winning improved their financial situation.
Most lottery winners spend their money on household necessities. Meanwhile, the majority of non-winners would do their potential spending on purchasing land or a house. In fact, that’s one of the main reasons why some people play the lottery. They dream of being able to finally afford their own home.
In reality, only 4,30% of lottery winners spend their prizes on purchasing fixed property. More people spend their money on buying jewellery and expensive cars than on a house.
Furthermore, 21,10% of people would want to invest their money in starting a business if they won the lottery. However, just 1,20% of lottery winners actually do this. Starting a business is much harder than most think. It’s worth noting that only a small percentage of entrepreneurs spend their money on lottery tickets.
If an entrepreneur were to win the lottery, they would surely invest their winnings. But someone who doesn’t know a thing about starting or running a company would have a hard time getting it off the ground.
Furthermore, when you win the lottery, you get a huge sum of money overnight. It’s hard to come up with a good plan on what to do with the prize when you have so much cash at your disposal. Having a lot of money in your bank account may make it seem like it’ll be there forever, but you need to be careful how you spend it. Of course, that all depends on how much you manage to win.
Sometimes, players get incredibly lucky and win a crazy amount of money. Last week (on February 4), a woman from Soweto played the South African Powerball and won a whopping R114 million.
She spent only R5 on a ticket and became a multimillionaire overnight. What’s crazy is that she would often struggle to pay the rent.
Seeing as how she’s the mother of four children that she rarely saw because she was constantly working long hours to support them, it’s safe to say that she will spend this money wisely. Her plan is to buy a house and start spending more time with her kids.
This woman had a lot of luck, seeing as how the odds of winning the SA Powerball jackpot are 1 in roughly 42 million. If you follow international online lotto draws, you probably know that every once in a while jackpots become huge.
Although R114 million is a crazy sum, it doesn’t come near to some of the biggest Powerball jackpots in the world.
In 2019, a man from Wisconsin purchased a single ticket and won $768,4 million (R11,48 billion). This was the biggest Powerball jackpot for a single winner. The jackpot was won by a 24-year-old man, who could use it to completely change his life.
Winners in other countries spend their prizes similarly to South African residents. For instance, in the United Kingdom, lottery winners spend most of their winning buying property, making investments for income, sharing it with their friends and family, holidays, cars, and paying debts.