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Millionaires find a happy medium Experts advise making small lifestyle changes after big lottery win

When you come into a large sum of money like the three winners from last week's record-shattering Mega Millions drawing, experts say, you should avoid big changes. And don't expect the windfall to buy sustained happiness.

Kenneth Kerr, who won $1 million in a New York State Lottery game two years ago, is a testament to following that advice.

Although he now receives pretax annual payments of $50,000 for 20 years, he was stuffing peppers at his restaurant -- Bertha's Diner -- on Hertel Avenue on Tuesday morning.

"I'm good," Kerr said. "I grew up a poor kid, and $50,000 a year was all I've ever dreamed of making."

Having grown up in Riverside, the 45-year-old Kerr said he has made very few changes in the way he lives since winning the lottery scratch-off game two years ago. He and wife, Liz, still go to work every morning at Bertha's, on Hertel Avenue.

The three winners of last week's Mega Millions lottery will net a lot more money than Kerr: They'll share $656 million and might be tempted to start an entirely new life.

But according to the experts, new millionaires like Kerr who keep their jobs continue to have a sense of purpose, since it is an established fact that money cannot buy happiness.

"Intuitively we think that money can buy happiness. All of the research data suggests that is not the case. In fact, there is some compelling research across different countries that shows that per capita income is unrelated to the percentage of people who say they are happy in those countries," said Niagara University psychology professor Timothy M. Osberg.

In the United States, where per capita income since the 1950s has steadily increased, Osberg said, the percentage of people who say they are very happy remains about 35 to 40 percent.

> Sharing the wealth

Betty Lou Safarian, of Niagara Falls, is another million-dollar lottery winner who has continued to live a middle-class life.

After wining a state lottery scratch-off game two years ago, the 73-year-old grandmother set up trust funds for her grandchildren, paid bills and made home improvements.

"I bought some things for the house, like a new furnace, and I give quite a bit of money to my two kids to help them pay bills and stuff like that," Safarian said.

She also gave in to a longtime dream: "I bought myself a canopy bed. That was something I wanted," said Safarian, who is retired from Carborundum and cutting hair.

After taxes, Safarian and Kerr receive annual payments of about $33,000.

"I don't mind having a million dollars. Two weeks after I won the million, I was at Seneca Niagara Casino, and I won $16,000 playing a 50-cent slot machine," Safarian said. "People ask to go to the casino with me. They ask me to press the buttons on their slot machines, but I don't do any of that."

Then there is Arlene from the Northtowns, who asked that she only be identified by her first name.

That's because she's afraid of getting burned.

Soon after she won $6 million in a state Lotto drawing about 10 years ago, Arlene said, she received 10 to 20 letters a day from people seeking money.

"Letters came from random people, and friends and relatives crawled out of the woodwork with desperate stories," Arlene said.

Though she declined to say how much she lost to those who gave her sob stories, Arlene said the experience taught her that greed knows no bounds.

"People have different sides to them, if they think you can do something for them. Just because you were lucky, they think that you should share that," Arlene said. "Everybody is looking to make something out of your winnings."

After taxes, her windfall was trimmed back to $3 million. Despite the onslaught of requests for money, she was able to protect her winnings.

"Let's just say I'm financially comfortable," she said, adding that she continued to work at her job. "If I'd stayed home, my husband and I would have been bumping into each other."

Sudden wealth can have a corrosive effect on happiness, according to Michael Norton, an associate professor at the Harvard University Business School.

"One of the biggest sources of happiness for people is their social relationships, and money often interferes with that, rather than helping it. The money can actually erode social bonds," Norton said.

Of the financial problems that can come with a big win, he said, people will sometimes seek more material possessions, thinking that translates into happiness.

"People think they will use the money to get out of debt and then they will be happy. Instead, what people often do is use the extra money to buy more things, and [they] end up with the same amount of debt.

"One great piece of advice for people who get a large sum of money is to change your lifestyle as slowly as possible," Norton said.

That has been the case for Kerr, who still cooks at Bertha's Diner and even "cleans the deep fryer."

"Other than doing some traveling with friends and family, nothing has really changed about my life. We share more with others. We like to share the wealth a little bit with our friends and family," he said. "We still live in the same house in the city."

But rather than taking three weeks of vacation a year, he says he now takes six.

"What I like to do is a get a place with five rooms, and I say to friends and family, if you show up, you have a place to stay," Kerr said, adding that he did that last year in Venice.

There are other reminders as well that he won the lottery.

"Every single day I still get calls and letters from businesses offering me loans and offering to buy my lottery annuities. I tell them all no. In the beginning, they paid me to talk to them over the phone.

> Besieged with calls

"They'd send me $100 gift cards, $200 gift cards, $50 gift cards. I could pick up the phone today and get a $50 gift card just for saying I'm still at the same address."

He explained that these companies profit off the lack of financial acumen of some lottery winners.

"Winners will be offered a loan with no interest, and in exchange for the loan, the winners will have to sign an agreement giving the company first rights of refusal if the winners ever decide to sell any of their annuity payments," Kerr said.

"The winners may need more money in the future than the annual annuity payments and then want to sell future annuities, but because they have given first rights of refusal to the company they took the loan from, they are not in a position of strength. The terms will not be as favorable as the initial loan," he said.

The key to attaining prolonged benefits from newfound wealth is to seek out a trusted professional, Arlene said.

"My advice to people is to get good financial advice, and if you can, keep it private that you have won," she said.

In New York State that is not possible; names of state lottery winners are public information.

There are other states that allow winners to remain anonymous, including Kansas and Maryland, where two of the three winning tickets in last week's $656 million Mega Millions drawing were sold.

Safarian said she also heard hard-luck stories from folks seeking a piece of her winnings as well as offers from companies wanting to buy her lottery annuities.

She says she did not give away money "because you don't know who is telling the truth." As for the companies, she said, "They wanted too much."

Her advice to those who hope to hit it big on the lottery?

"Keep playing. If you don't play, you don't win. Every week I buy 10 lottery tickets, a mix of lottery games," Safarian said.

She plays the lottery for entertainment. For others, it may be a desperate move.

St. Bonaventure University assistant professor Kathy A. Zawicki, chairwoman of the sociology department, said lotteries often attract people on the bottom rung of the economic ladder who can least afford to spend money on games of chance where the odds of winning are slim.

"Those who buy the lottery tickets are often poor and looking for a way to break out of that class," Zawicki said, "and it is the worst investment you can make."