The Year’s Big Lottery Winners Say Their Lives Have Changed Little
So your $1 California lottery ticket came up a big winner, showering you with as much as $25 million.
Time for a Christmas shopping spree?
No way, say 10 of the 88 individuals and families who this year won $1 million or more--to be paid over 20 years--in the California lottery.
All of the lucky winners who could be located and were willing to talk said that instead of joining America’s December spending frenzy with a vengeance, they spent modestly on Christmas. It is an attitude confirmed by a Florida scholar, H. Roy Kaplan, who said modest Christmas gift-buying is typical of what he has found in 16 years of studying big winners in state-sponsored lotteries.
“We aren’t doing anything flamboyant,” said Yvonne Baker of Hanford, a San Joaquin Valley farming community. Her husband, dairy farmer Otto Baker, 60, bought a lottery ticket last August that will pay $4.37 million, before taxes, over the next 20 years. The Bakers will get annual checks for $179,000, their share after the IRS takes its initial 20% cut. (More taxes may have to be paid later.)
‘Worked Hard All Our Lives’
“We’re older, stable people who have worked hard all our lives,” Yvonne Baker said, “and we plan to just keep on doing it.” She said most of their first-year check has gone into building a 100-by-60-foot farm shop to house and repair tractors and other equipment needed to maintain their 360 cows, and to other long-delayed improvements to the dairy they have run for 36 years.
“We bought pretty much the same this year as before,” said Arlie Ragle of Anaheim, a father of seven and grandfather of 13 who last June won a 20-year annuity worth $2.3 million before taxes.
“We spent our money on a new home and a van and things we wanted, but not on Christmas,” Ragle said. “But next year we will probably spend more on Christmas.”
The $93,000 first-year check meant moving out of a double-wide mobile home into a four-bedroom house “with a pool, a spa--the whole works,” Ragle, 61, said. “And it meant I could retire” as a maintenance supervisor at the Hitco Co. aircraft equipment plant in Gardena.
Robert A. Bell, 68, of Inglewood, a retired Terminal Annex post office foreman, said he has not spent one cent Christmas shopping even though on June 6 he won an annuity worth $4.4 million, before taxes.
“Shopping is the last thing you’ll see me do,” Bell said. “I hate it with such a passion that my wife buys my clothes.”
Evesta Bell confirmed her husband’s distaste for stores and crowds but said she loves shopping.
‘I Still Penny Pinch’
Because of their lottery winnings, Evesta Bell said, “I bought a few more expensive things” for her husband, grown daughter and one cousin. “I still penny pinch. I really do. And my nephews all laugh at me, but I’ll probably never get out of that.”
“We did the same as we do every year,” said John Rodriguez, 70, of Calexico, a retired bottle cap plant foreman who last March 21 won an annuity worth $2.6 million, before taxes.
“I figure we spent maybe 10% more on Christmas this year,” he said.
But Rodriguez said he and his wife, Carmen, did their buying on a trip to China and Hong Kong financed with part of their first-year check for $107,000 and that next year they plan a cruise with their four grandchildren.
Herbert C. Briggs, 57, a Stockton railroad engineer who won $11.6 million last July, said through a California lottery spokesman that his new-found fortune had not affected the family Christmas shopping in any way.
Dolby R. Marple, 58, a retired Air Force employee who lives in the Sacramento suburb of Fair Oaks, said that not only did he not go on a December shopping spree, but “we don’t have a tree as large as we usually do. To us, Christmas is the birth of Christ so we don’t go overboard.” He said that after the couple won an annuity last Jan. 31 worth $9.2 million, the first major check they wrote was to their church.
Marple said his grandson, Chad Armstrong, 13, of North Highland, near Sacramento, “is going to have the biggest” present to open. “We got him a Tandy computer with color monitor, the whole nine yards. I figure he will get a lot of use out of it.”
Marple added that months ago he and his wife, Tamzia, handed out gifts to their four children, eight grandchildren and four great-grandchildren in lieu of big Christmas presents. Marple said his wife got two fur coats and the couple bought each other diamond rings. Marple also bought a Cadillac, “which I always wanted but figured I could never afford.”
He said in the coming months they also will take their relatives on trips of their choosing anywhere in the world. “I told them those were early Christmas presents,” he said.
Frank Zummallen, 45, a Fresno schoolteacher, similarly thought that “the whole year’s been like Christmas” since Jan. 3, when he won an annuity worth $3.43 million. Zummallen said he bought his winning ticket with money he would have spent on cigarettes, a habit he said he has successfully kicked.
Spent More for Christmas
“I hate Christmas shopping because of the crowds,” he added. “In the past we always set up a Christmas budget and stuck to it, but I feel much less reticent about spending money now.” His after-tax checks will be for $134,250.
Even so, Zummallen figures he and his wife, Terry, a special education teacher, spent $2,000 on Christmas, triple last year’s sum.
The average American family, which had a much smaller and usually less certain income than the Zummallens, spent about $380 on Christmas this year, the Conference Board estimated.
Carlos Olvera of Compton, who last weekend won $25.1 million, making him the biggest individual winner in California Lottery history, didn’t get much chance to shop for Christmas with his first check. Lottery officials handed him a check for $1,005,600 on Thursday morning, Christmas Eve.
Earlier, Olvera told a news conference that he would probably buy his son a computer, but had not thought much about what other Christmas presents the winnings could buy.
All but one of the winners interviewed said they bought new automobiles. Zummallen said he bought an Acura Legend for himself, a Mitsubishi pickup for his wife and cars for his parents and his in-laws.
Most also bought a new house or remodeled an old one and regarded this spending as an investment. Most splurged on travel or, like the Bells, said they plan to travel extensively beginning in 1988.
Some winners celebrated by instantly quitting their jobs.
Within 20 minutes of learning he had won more than $25 million before taxes, Olvera said he quit as a crew supervisor in a Carson industrial plant. Louise Watson, a great-grandmother from Downey who won $4.1 million on her 65th birthday March 7, promptly quit her job in the dietary department at Rio Hondo Hospital, hospital officials said. Zummallen said he took a sabbatical from teaching and hopes to use his winnings to finance pursuit of a doctoral degree so he can fulfill a long-delayed wish to become a psychologist.
But James Shivley, 55, a carpet salesman from Shingle Springs in the Gold Rush country, was hard at work for Atlas Carpet Mills of Los Angeles the week before Christmas, despite having won $9.48 million in August.
“Absolutely nothing has changed for Christmas,” Shivley said. “My life style before I won the lottery was very good. I enjoyed my life and could do anything I wanted to do, and I have no intention that the lottery will change that.”
Shivley, who has four children and two grandchildren, said he bought a new pickup for his wife, free-lance writer Carolyn Shivley, only because her old one caught fire. Robert Diaz, 32, a San Fernando Valley mechanic who won $2.1 million last June, said there was “nothing different at all” about Christmas this year. His 13 nephews and nieces each got their usual $20 and he spent a few hundred more on presents for family.
Diaz said he is saving most of his money so when his fourth check arrives in 1990 he can go into business for himself, and then he plans to put away some money for his parents’ retirement.
Modern state lotteries began in New Hampshire in 1964, the first since Louisiana’s ended in 1894. Today, 25 states, the District of Columbia, Puerto Rico and the Virgin Islands operate lotteries.
A California lottery spokesman said that 158 people have won $1 million or more since the games began on Oct. 3, 1985. Total California lottery winnings to date exceed $2.2 billion with $1.2 billion going to public education.
The Florida scholar who has interviewed and surveyed hundreds of lottery winners across the nation in the past 16 years said few lottery winners spend wildly.
“By and large, most people are fairly conservative with the money they win,” said Kaplan, a sociologist in the Florida Institute of Technology’s school of management. Kaplan, author of the 1978 book “Lottery Winners,” said, “A great many winners--the vast majority--purchase new homes or second homes or remodel” because these are tangible investments they can enjoy.
He said many set up trust funds for children or grandchildren.
Those over age 50 often retire early if their annual lottery checks significantly exceed their earned incomes and those under 40 often use their winnings to set themselves up in business or to take a year or two off from work, he said.
“Most give significantly more money to their church and charities, and a lot view it as a gift from God so they see the money with reverence,” Kaplan said.
He estimates that since the first million-dollar lotteries 17 years ago, about 3,000 Americans have won cash or annuities worth $1 million or more. “It is a myth that these people are millionaires, because the winnings are paid over 20 years and in most cases their after-tax winnings are not enough for them to quit work,” he said.
Kaplan said some winners he has studied, anxious to avoid seeing one-third or more of their winnings go to Uncle Sam, get into sophisticated tax-sheltered investments and end up losing all or some of their investments. California lottery winnings are exempt from California state income taxes.
Only a few, he said, use their winnings wisely to develop a business or invest and end up creating substantial fortunes.
Marple said after he won $9.2 million last summer, he was besieged by real estate firms and a man wanting him to buy gold, but on the advice of an accountant has decided to avoid complicated and speculative investments.
Research indicates that “working-class people play the lottery more regularly, but we have a broad cross section of people playing so we have had winners who are criminals, drug addicts,” Kaplan said.
“One of the myths about lottery winners is that couples split up. They don’t. Being relieved of the financial stress strengthens many marriages.”
Zummallen and Marple heartily endorsed that view, saying their marriages are stronger now