I recently watched part of a show on HGTV called My Lottery Dream Home.  I don’t do a lot of random television watching, but sometimes I enjoy the shows on HGTV.

I have written before on Tiny House Hunters and the whole tiny home phenomenon.  It is a reflection of people not wanting to be in debt and wanting to live a simpler (and less cluttered) life.

I also enjoy House Hunters, House Hunters International, and Flip or Flop.  The couple on Flip or Flop seem to be very genuine, and the show is intriguing.  I am afraid it is also symbolic of a new housing bubble, although more localized this time around.

This recent show I watched – My Lottery Dream Home – is almost an experiment in human psychology.  They find real life lottery winners who want to majorly upgrade their living quarters with their new-found money.

I have seen the winning amounts range anywhere from $1 million up to as much as $180 million in one case.  In the situation of someone winning $180 million, I can completely understand buying a house worth a million dollars or more at that point.

The episode I saw involved a couple who won $2 million.  I did not hear if this is the lump sum and if it is before or after taxes.  I am assuming it is before taxes.

This couple lived in a very small house, so it was understandable of them wanting an upgrade.  But they were looking at houses with a budget of $750,000.  This has disaster written all over it.  Why couldn’t they have upgraded to a $200,000 house instead of jumping straight to a mansion?  This wasn’t California real estate where $750,000 won’t get you much.

If that $2 million was before taxes, they may have been lucky to end up with $1.5 million.  That means that at least half of their winnings is going towards buying a house.  My guess is that they do not have high incomes based on the house they are moving out of, although you never know for sure.

When you buy a house for three-quarters of a million dollars, you also get all of the expenses that come with homeownership.  With the higher price tag comes a higher price tag for insurance and property taxes and utilities.  You can see the money flowing out the door rather quickly.

This is really a lower class attitude.  Your class isn’t dependent so much on the amount of wealth or the level of income that you have.  It is more of a mentality.  Upper class people are future oriented.  Lower class people are very present oriented.

Being future oriented does not mean that you can’t be happy today.  You can enjoy the present.  It is just that future orientation considers the future.  In fact, I would venture to say that many future oriented people are far happier in the present than are present oriented people.  Present oriented people are trying to always gain satisfaction in the present at the expense of the future, but the stimulus quickly wears off.  It is like someone addicted to drugs where he needs an ever higher dose to get high again.

When someone wins the lottery, it does not change their class.  It changes their bank account, but it doesn’t change their mentality.  If someone has a lower class mentality, they won’t know how to handle the money and they will see it squandered quickly.  This is why you see so many disaster stories of lives that are wrecked after winning the lottery.

The whole idea of playing the lottery is one of present orientation.  Still, there are middle and upper class people who do sometimes win the lottery.  They know how to handle the new-found wealth and they treat it with care.  They make it last, whether they want to quit their job or not.

If you won $1.5 million after taxes, what would you do?  Would you quit your job?  Would you buy a house worth $750,000 to live in?  How much would you spend within the first year?

In today’s world, $1.5 million won’t last all that long if you are not relatively frugal.  It would be life changing for most people, but not always in a positive way.

If you ever win the lottery or come across any new-found wealth, I hope that you have an upper class mentality, or at least an upper middle class mentality.  If you don’t, you will probably find yourself in the same situation (or worse) in 10 years as where you were right before your new-found winnings.

I fear that the lottery dream home will turn into a nightmare for some.