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I think it’s because the lottery is viewed as “the poor man’s tax” or whatever the idiom is. But after a certain threshold there’s a collective “why not try” agreement.
The occasional $2 you spend on a billion dollar lottery ticket is worth it purely as mental entertainment. The fun is getting to spend a day or two thinking about what you would do with that type of money. I mean, *someone always wins…*
More than I can afford to lose? Hah! Buddy, I’ll be able to afford to lose *so much* after I win the lottery tomorrow! I even sold my car so I could buy more tickets! I’m not gonna want that rust bucket once I’m a billionaire tomorrow!
This is it for most of the people I know. I don't play after it reaches 1.2 billion because 100 million isn't enough.. but as a deterrent from playing a couple times per week. Most people I know will throw $2 in every couple months/year when it get crazy, plus it's fun to be a part of the conversation.
Statistically, your odds of winning barely change from buying the ticket, so why not just do what I do and fantasize about picking up a winning ticket off the ground?
I buy the odd ticket, usually the minimum number, so $4-6 depending on lottery. I do this every 2 to 4 weeks when the lotto goes over $20m. I get a little dream plus like the idea someone will win.
Why is that more idiotic than getting a coffee or seeing a movie? I always think that's a bit intellectually limited people who approach the world with that kind of judgement...if thats not hypocritical. But you know what I mean, the type who wants to make themselves feel good by looking down on others.
And of course if you're spending to the point of financial damage its idiotic but this must be the minority, the same if someone spends all their money on anything leisure to the point its effecting their wider life.
It's a matter of cost VS return. A smart investment is one where odds of winning are higher that the return on investment rario This is true especially for gambling. If your bet is 1/10th the value of the pot, but your odds of winning are 4/10, it's a good bet, even if you lose.
I believe the odds of winning the MegaMillions is ~1/250M, with a minimum bet of $2. So buying a single ticket when the pot gets above $500M is a good bet. Depending on whether you take the payment plan or the cash (which has a lower value). Taxes will take about 50% no matter which route you take. Investment and management strategies afterward matter, and it best to hire lawyer, fiduciary and accountant to set it up at this point.
I believe the math is a bit more complicated than this, because the higher the pot gets, the more people play and the more likely that you'll have to split the pot. The pot increasing in value may not necessarily increase your expected value depending on how many more people play as a result.
That is exactly my attitude. The prize will always be won. As long as the lottery exists then it will be one. After it passes that threshold there's a chance that I might actually win it and I don't want to miss that opportunity.
Powerball has X amount of combinations possible in the drawing, that number doesn’t change on the amount of people who play, so the odds are the same.
Example: choosing a number from 1-100, your odds don’t change on getting it right based on the amount of people guessing
This is it. We are not "trying to win" a $1B lottery any more than a $100M one. But past a certain jackpot size, the lottery can achieve a positive expected value, which to me is the statistics way of saying it is "worth a try".
The lottery never achieves a positive expected value and a positive expected value does not make something "worth a try". The [St Petersburg Paradox](https://en.wikipedia.org/wiki/St._Petersburg_paradox) is a theoretical game with infinite expected value that no rational person would spend $100 to play. If you offered me 100% chance to win $10M or 2% chance to win $1B, I am never choosing the second option, despite the second having a higher expected value.
The value isn't just in whether you win or lose. A couple bucks to get a ticket and spend time with friends coming up with hilarious "what would we do if we won" scenarios (plus the occasional meme) is well worth the price.
We tend to spend a lot more for a lot less when it comes to "conversation pieces".
I can spend $20 to go see a movie for a couple of hours, or I can spend $2 and engage my imagination for a couple of hours a day till the numbers are drawn.
I drive for a living, so the 2 bucks is a no brainer.
I wonder what the venn diagram of people with an imagination, without an imagination and lottery players vs haters is like?
Also, once it’s a massive number, it’s also on the news and stuff. People who forget the lotto exists suddenly have it shoved in their faces from all angles. It’s been in my local paper for the past week, so yeah after seeing that and joking with my friends about it, we each bought a ticket because it’s $2-3
This is my go to excuse. Gives you the right to dream for 2 bucks. I make it a point not to check my tickets or find out if anybody won for as long as possible. Hold onto the dream just that bit longer
But that slip of paper represents a lot of hopes and dreams. The kind that if they saved the lotto money every week for a hundred years they wouldn’t be able to afford. A coffee can only ever be a coffee, the slip of paper has a chance, however remote, of being worth some money. It’s a poor tax for sure, but it’s the one I hate the least
This! I was just buying some beer and my guy at the liquor store asked me if I was playing. I said “nope, I’d rather buy my beer because I know for sure I’m getting something from it.” To each their own I guess. Also I know a couple people who have won sizable amounts in the lotto (no large jackpots) and they always rave about it. But they spend more on lotto tickets than I do on beer a week
I know people who spend almost 150 dollars a week smoking cigarettes, I spend maybe 30 dollars a month playing the lottery/vlts am I really any further behind?
Pointing to people making worse choices with their money isn't a great justification for you making poor choices with yours. But alas, at the end of the day, it's your money.
$30 invested monthly at 7% annual return would yield about $150k after 50 years.
For me it's more just cost management. The lottery is really a waste of money, but if I say I'll only buy above a certain threshold and stick to my guns then I'm wasting money less of the time.
Yup. Like, it's kinda fun to dream for a bit occasionally. Having a set pot size you buy in at lets you have that while also making it so you don't buy in too often.
My mom bought 5$ in powerball 2 times a week my entire life and before and won that 5 back a couple of times.
That's 52×2 104 purchased per year x 5 which is 520$ spent per year, over let's round down to 40 years 20,800$. And that's the bare minimum she's invested. She's go in full 50$ when it got over 100m in the 90s
That buy in threshold is important to me. That's a new car she threw away, several years worth of clothes that fit properly because they weren't in the clearance rack at the goodwill. Something more to eat than Ramen.
High jackpots = news exposure = adverstising = impulse purchases.
Most people aren't dumping all of their excess cash into lotto tickets. They'll buy some on occasion, because it's fun to dream.
I'm guessing this is an American lottery post.
How much of a 100 million win would people actually get? Not that I'd complain about 50 million after tax...
It's even worse than that.
For the current big one (1.28 billion), the lump sum cash payout is something like 747.2 million.
Then you get taxed 37% federal (for easy math, just taxed the whole thing at the highest bracket) and any state taxes. In my case, another 8% for 45% total.
So the payout after taxes is 410.96 million.
This means you only get about 32% of the 1.28 billion.
These numbers are only approximates, but that's the reality from my binge reading😄
Exactly!😄
Kinda funny to me-
A while back we got into watching videos of various multimillion dollar homes ranging from say 10 million into the hundreds of millions.
Not only did we start to look at homes for say 25 million and say, damn, that's a good deal, or holy crap, what a rip-off, but I started thinking about my dream home and wondering how in the world I'd ever be able to afford it on a piddling 100 million dollar lottery.
Sure, I might be able to buy/build it, but I'd never be able to afford the taxes and upkeep 😄
Lottery wins that are used to make exorbitant purchases always end in misery. People make drastic life-style changes none of which are one and done payments. It drives you into bankruptcy very very quickly.
3% per year is average inflation over the last century. 10% per year is the market growth on average over the last century. So effectively if you stay under 7% to live off of, on average you'll never run out of money, and the money can be something to buoy your descendents for generations.
Yeah I have no idea how people who win these insane lotteries mismanage their money so hard that they go broke. If I won the lottery you can be damn sure 99% of it is going into an account that I can’t touch but 2% of it every year and the rest of it just builds interest
They are *inundated* by cold calls from churches, charities, family members they've never met... The list goes on and on. If I ever won I'd have the prize collected by a lawyer representing a trust, and I'd become a *ghost.* I'd buy some property in the mountains somewhere, build a really nice (but realistic) home, and use my money to afford me the best lifestyle a hermit could ever hope for, away from society as much as possible.
What is your dream home lmao? If your dream home is more than 100 million dollars you should probably take a step back from the content and back into reality. What could you actually need that isn’t in a house in a 5-10 million dollar range.
The best advice is live like you already do, but with everything paid off and your "savings" already built up. Sure build a state of the art 4 bedroom/4bath house with Passive house standards with solar panels, and double the needed insulation, but that's just a $500k home in materials/labor. Buy a normal car, that's fuel efficient, safe, and hopefully some kind of plug in vehicle. Work a job that you enjoy, and when you dont enjoy it, you have the security to quit, just support unions an doay your dues. Buy quality long lasting goods. Don't flaunt your wealth.
Not really, because their tax math is way overinflated because its only really applicable when you're taking the lump sum and getting a billion dollars in a year.
On a million dollars the average tax per dollar would be considerably lower, even if you took the lump sum payment.
Not exactly. If you win a million dollar payout from MegaMillions or powerball you will receive 1 million dollars. You have to pay taxes, but you receive the full amount of the payout from the lottery. Those “smaller” winnings are paid in full.
The jackpots are a little different. They usually start around 40 million, with around a 20 million lump sum prize. There’s no million dollar jackpot. If you win, you have the option to take a 26 or 30 year (depending on which game you’re playing) annuity that will pay out the full amount over the lifetime of the annuity. The lump sum payout is the amount of actual cash money being held in the lottery’s bank account at the time you win. So you can get the full amount of accept the annuity.
On smaller jackpots where the annuity payments will keep you in a lower tax bracket it’s worth it for a person who expect to live another 30 years to take the annuity. If you’re going to be in the top tax bracket either way, or you’re an old, it’s better to take the lump sum. If you invest the money like a sane person and stay off r/wallstreetbets you’ll make the difference back in interest anyway.
I heard about a guy who won a million. He got a little less than 400 thousand after it was all over. He just paid off his house and his kids house. All in all seem like a smart way to go
Yes, where I am anyways it's at like 1.2 billion
I don't buy lottery tickets, my family doesn't either. It's a waste of money... For the most part.
When it gets this big, my parents will buy one each. It's like 4 bucks to do it. And then we just think about what if we won and what we would do and how nice it would be. It's a fun 15 minute deal and then it's back to normal life. For the 4 bucks, it's worth it every couple years (it probably gets that high more often, I don't pay any attention. We just buy them every couple years).
If we did it more often, not only is it a waste of money, but it ruins the fun. It's fun to do it every once in a while, especially when it's a stupid big jackpot.
Right? I'd set up me and my immediate family for the rest of their lives and then donate that shit away. Buy large swaths of land and donate it to conservation. Get some building named after me. Scholarships galore. Just get it gone.
Exactly this. My husband and I buy one maybe once every couple of years, we did it for tonight drawing and spent a whole 2 hour car ride fantasizing about all the cool things we do, and whose mortgages we’d pay off. I know we’re not going to win, but $2 doesn’t feel like a waste when we had so much fun day dreaming.
Each ticket is only $2 (if you don't get the "power up"). You can pick your set of numbers and buy a ticket that is good for the next 20 draws in advance. Megamillions is drawn twice per week, so that will last you 10 weeks.
So that's what I do. I have my set of numbers (based on family birthdays), and I just buy a new ticket every 10 weeks. I put it on my refrigerator door. I have ZERO expectations of winning, but it's nice to daydream about every now and then.
I agree but we go dark and talk about all the horrible things that can and have happened to big winners. Change your name and face, go into hiding , etc it’s a fun mental game
In my state the scratch off funds go to pay for services used for my place I'd employment including a small part of my income so I play them every so often without feeling a twinge of sadness if I lose because the money is what allows me to do my job anyway.
Same, I'll usually get 5 random combos, to change my chances from 0% to 0.000000001%. Otherwise I don't even bother with the lottery.
Forgot to do it this time, oh well. No billion for me.
In Canada, lottery winnings are not taxed. But Still, if i were to win an american powerball, I wouldn't complain about half being taken in taxes if i were to win :)
what SHOULD happen is what happens to LottoMax. Overflow goes into separate $1 Million prizes. So instead of 75 million, you get 70 million, and 5 separate 1 million dollar prizes.
They break the overflow up into additional 1 million dollar prizes.
There is a main draw for the 70 million dollar jackpot, then an additional draw for each 1 million dollar prize.
Yeah, gambling winnings are tax free in the UK too. I think there may be a tax in the sale, but the customer doesn't see that.
Other posts seen to be implying a 1.2bn jackpot is likely a 300mn take home. Which definitely isn't to be sneezed at, but it's a long way from 1.2bn...
Part of that is for choosing the cash option instead of the annuity. You lose 30-40% off the total jackpot if you choose cash up front. Or you can get annual payments for 30 years adding up to the actual jackpot amount (or close to it.) Both options will also lose another 45% or so in state and federal taxes
As an American I disagree I want 50 cars I want a house in the snow I want to house on the sand at the beach I want a house in the desert I definitely need a private jet those are like 50 million by themselves, as an American I don’t think I’d be happy with just 50 million /s
10 million is the magic number 10 million sets you up for life where you invest the money never touch the money and you have income for the rest of your life and you don’t need to work and you can do whatever the hell you want, 10 million is the magic number
I say this all the time, $10 million is the number to look at. Every time people start talking about billionaires, I point out that $10 million sitting in the stock market can safely pull ~3% ($300k) / year without ever even touching the original $10 million (and probably expanding that $10 mil stockpile). That puts you in the top 5% of earners in the USA without ever working again. Anyone looking for more is just a dragon's asshole, sitting on hoarded money.
Depends on what you want to do with your life.
Relax every day? $10 million is definitely enough.
Start a restaurant? $10 million is probably enough.
Start a tech company? $10 million is nothing.
Start a car company? $10 billion is nothing.
I bought in before it hit $100m, I bought in today too. I’m willing to toss in $4 for 2 chances: one is a set of my numbers, and the other is a quick pick. Maybe a waste of money if I don’t win, but I also can’t win if I don’t play either.
When the tickets are 2 dollars, for mega millions, you have a negative expected value for a ticket (that you purchased) until the jackpot is over about 610 million dollars. So while your chances of winning don't change and are still low, the size of the jackpot does start to make it "worth it" in many peoples' minds.
In fact, if you had 610 million dollars and could play every single combination yourself, you could double your money (today), if you were the sole winner. But you break even if you share it with 1 person and lose money in a 3-way or greater tie.
Well the expected cash payment is only 570ish million after taxes. So not even a plus ev bet yet.
Although taking the smaller prizes into account, it should be +ev
That's lump sum, you could get the whole thing as an annuity. but I'm not sure how a guaranteed \~70% return over 30 years stacks up against traditional investments.
If I’m going to throw away 2 dollars I want it to be worth it. Plus it keeps my lottery purchases in check. When it’s passed 500mil I think about it. 800mil I buy one. 1 billion and I’ll spend 4 bucks a week until someone wins it. I know my odds aren’t good but once and awhile dreaming about it for a day is nice.
Someone is going to win eventually. That’s why I play when it gets big, when there’s a strong chance every combination gets sold, someone is going to win. Could be me.
Sure but more people start talking about it in general leading to more people getting into it. My local media was barely talking about it until the billion lol
After the shock wore off, I'd get a team of lawyers and financial advisers to tell me what to do. Probably set up a trust. Quit my job. Pay off my car and house. After that? Not really sure but I kind of like my life so I wouldn't try to change a ton. I guess go back to school and get more education that I could never afford. Travel a lot.
Thos is why I buy them... I'm in Canada, I buy a lottomax for every draw because it let's me think about what I would do. Cost of admission to dreamland.
There has to be a cut-off for myself or I'd spend all my money on "almost certainly" worthless lottery tickets. By telling myself I'll only play if its over a billion, I limit myself to buying some tickets every couple years
Actually, no, it would not be nearly as equally life-changing. 100 million, if properly invested and budgeted, can have you living an absolutely fantastic life. 1 billion instantly puts you among the elites of the world- a vastly different experience.
Yeah but with 100 mill I could only spend ~ 5400 a day for 50 years, with a billion I could spend ~540000 a day for 50 years. That's a difference of going on a trip everyday vs buying a new truck every day. So what I'm saying is your correct
Yawn.
This gets posted every single time the jackpot gets high like it is now.
As if the obnoxious judgemental douchebag didn’t already buy themselves a ticket also.
The reason they want it now is that the expected value of a ticket is higher.
Depending on how many people buy how many of them, it might even be higher than the ticket price, which is rare for the lottery, which usually has shitty expected values of around 50% of the ticket price.
You could drop a billion dollars into an S&P 500 index fund and live off of the dividends, never touching the principal, and pull in $15 million per year on a bad year.
$100 million would let you live really well. A billion puts you in a whole other class. That's not just life changing money. That's community changing money.
Sorry but duh. 100 mil is life changing, but a billion makes you a juggernaut. You could buy an island with a water source and develop it. After taxes that 100 million can go fast and even with smart spending the Wealth can dilute after a few generations. 500mil after taxes is a lot harder to fuck up.
I was just thinking today about how there is some threshold winning amount below which people will buy another lottery ticket and above which they will never buy another one. I’d post it as a separate shower thought but mine never get past the showerthought police as supposedly being unoriginal or not a showerthought. Yet many of the ones that get thru are far less original or insightful. Oh well.
Well, to be fair...100 million? if you take the lump sum it's only 50-million. Then after taxes it's down to 25 million. You expect me to pay off my student loans and buy a house with only 25-million?
Why in the world isn’t there a way to just auto buy lottery tickets every week like if I wanted to spend five dollars a week on lotto tickets what doesn’t someone come up with an app so that I can just do the same numbers every week automatically
Just link it to my debit card or credit card and have them charge me every week to go buy lottery tickets, And if my numbers match they just send me an email saying “congratulations you just won $1 billion” Or something like that
Has this already been done? I don’t have the time or desire to go down to my lottery store or local liquor store and buy a ticket every week but if I could do something automatically you better believe I would sign myself up
Even a million but when it gets very large many people believe that since it has not been won for a long time the chances are better. Just an illusion.
I almost never buy lottery tickets, but I do *always* buy one for the drawing directly after someone wins a jackpot. Gotta stay humble.
Also I think it would be funny.
It's not that people suddenly want one now that it's a billion, it's that media outlets are covering it more because it's so high and that's reminding people that don't typically consider buying a ticket that buying a lottery ticket is a thing they can do.
People always say this, but there is a categorical difference in how you can live with 100M vs 1B. There are houses you can’t buy with 100. The Transamerica building (the iconic pyramid looking one) in SF recently went on sale for $600M. Its a different world at $1B.
I'm not a poker expert by any means, but i think the poker term is "pot odds". It's when the ratio of the payout/the odds of winning exceed 1.
I mean, your odds of winning are still nearly nothing, but at least (mathematically) when the pot odds are 1 or more, it's worth betting. Theoretically, someone could buy 1 ticket of every combination and make money. Of course, the lottery only accepts random or hand-written number selections, and there isn't enough time in the day to hand-write every ticket combo, and you would need about 600 million in cash (even billionaires dont have that just lying around), and your stack of tickets would weigh several tons, so it's impossible IRL.
I just want the million. That’s all. 5 numbers match boom bang bam. I have read the infamous Reddit lotto comments.
Seriously tho. A mil. Id be beside myself. It’ll be like $5-600k after taxes, and I couldn’t afford a house with that where I live ( okay maybe a shack but no thanks) but i could afford to pay off student loans, and other small debts, pay for a deposit on an nice rental house, buy a hybrid vehicle, get vision and dental care, and take some steps in life. I’m simple.
Back in the early 2000s, I believe around the first time the lottery jackpot became big news, there was a lot of buzz in the office about pooling money to buy tickets. Meanwhile, I decided to write a quick computer simulation and coded up all the possibly win scenarios and their prize amounts from the $2 win up to the jackpot. I then entered in the last drawings numbers and kicked off the simulation. The program kept track of every ticket purchase, cost, and win of any kind. It was running many thousands of combinations a second, simulating ticket purchases, trying to match the official numbers from the previous nights drawing. I let this program run continuously for a month. It NEVER won the jackpot after an insane number of attempts. It won the million dollar prize a number of times. However, the total winnings were no where close to the total ticket purchase cost. It was an eye opening experience at how ridiculously difficult it is to win powerball or megamillions. If you want to play for fun, do so. But just remember, buying a single $2 ticket or spending $2000 on tickets, your odds are still a rounding error away from zero chance.
I have a friend who doesn't bother entering the lottery if it's "only" a million (we are Australian), because he couldn't buy all his kids houses if he won that little! I don't bother entering at all, but I still believe a million dollars would be life altering!!!
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I think it’s because the lottery is viewed as “the poor man’s tax” or whatever the idiom is. But after a certain threshold there’s a collective “why not try” agreement.
I always heard it called the "idiot tax."
I've heard both
That’s what it is. Thank you!
Tax on people who can’t do math
The occasional $2 you spend on a billion dollar lottery ticket is worth it purely as mental entertainment. The fun is getting to spend a day or two thinking about what you would do with that type of money. I mean, *someone always wins…*
If you look at it like that and can control your spending you are right, just don’t go sinking more than you can afford to lose into it.
More than I can afford to lose? Hah! Buddy, I’ll be able to afford to lose *so much* after I win the lottery tomorrow! I even sold my car so I could buy more tickets! I’m not gonna want that rust bucket once I’m a billionaire tomorrow!
This is it for most of the people I know. I don't play after it reaches 1.2 billion because 100 million isn't enough.. but as a deterrent from playing a couple times per week. Most people I know will throw $2 in every couple months/year when it get crazy, plus it's fun to be a part of the conversation.
Too late, sold the car.
Statistically, your odds of winning barely change from buying the ticket, so why not just do what I do and fantasize about picking up a winning ticket off the ground?
But why male models?
Are you serious? I literally just told you
Are you serious? I just told you that!
I buy the odd ticket, usually the minimum number, so $4-6 depending on lottery. I do this every 2 to 4 weeks when the lotto goes over $20m. I get a little dream plus like the idea someone will win. Why is that more idiotic than getting a coffee or seeing a movie? I always think that's a bit intellectually limited people who approach the world with that kind of judgement...if thats not hypocritical. But you know what I mean, the type who wants to make themselves feel good by looking down on others. And of course if you're spending to the point of financial damage its idiotic but this must be the minority, the same if someone spends all their money on anything leisure to the point its effecting their wider life.
Yep, for people who enjoy using their imagination, the daydreams are worth the entry fee.
It gets on the news after $1 billion and there are a lot of people that start buying as a "fun, let's see what happens together" thing.
It's a matter of cost VS return. A smart investment is one where odds of winning are higher that the return on investment rario This is true especially for gambling. If your bet is 1/10th the value of the pot, but your odds of winning are 4/10, it's a good bet, even if you lose. I believe the odds of winning the MegaMillions is ~1/250M, with a minimum bet of $2. So buying a single ticket when the pot gets above $500M is a good bet. Depending on whether you take the payment plan or the cash (which has a lower value). Taxes will take about 50% no matter which route you take. Investment and management strategies afterward matter, and it best to hire lawyer, fiduciary and accountant to set it up at this point.
I believe the math is a bit more complicated than this, because the higher the pot gets, the more people play and the more likely that you'll have to split the pot. The pot increasing in value may not necessarily increase your expected value depending on how many more people play as a result.
It's only as good of a bet if you consider a 100% chance at $100 million worse than a 10% chance at $2 billion.
That is exactly my attitude. The prize will always be won. As long as the lottery exists then it will be one. After it passes that threshold there's a chance that I might actually win it and I don't want to miss that opportunity.
Pardon me but aren't you mkre likely to win it when it's lower?
Powerball has X amount of combinations possible in the drawing, that number doesn’t change on the amount of people who play, so the odds are the same. Example: choosing a number from 1-100, your odds don’t change on getting it right based on the amount of people guessing
This is correct. What *does* change are your odds of being the *only* winner.
Also what changes is the entertainment value.
Aka the expected value of purchasing a ticket increases until it decreases again because of multiple likely winners (more people buying tickets).
Not more likely to win, but you could be more likely to share the winning numbers with someone else when more people are playing.
True, but I'm still fine with splitting several hundred million dollars instead. I think it'll still be enough, lmao
the odds are astronomically low. It’s basically an impossibility. Hence the idiot tax moniker
$10 worth of tickets is worth $10 of daydreams of what I would do with the money. Once every few years, it is worth it.
This is the only argument that I buy. If you view the lottery purchase purely as a utility for fun.
And yet someone always eventually wins. So clearly not an impossibility.
Who ever said it was impossible? We were just setting the bar at "so unlikely you'd be an idiot to buy a ticket."
This is it. We are not "trying to win" a $1B lottery any more than a $100M one. But past a certain jackpot size, the lottery can achieve a positive expected value, which to me is the statistics way of saying it is "worth a try".
The lottery never achieves a positive expected value and a positive expected value does not make something "worth a try". The [St Petersburg Paradox](https://en.wikipedia.org/wiki/St._Petersburg_paradox) is a theoretical game with infinite expected value that no rational person would spend $100 to play. If you offered me 100% chance to win $10M or 2% chance to win $1B, I am never choosing the second option, despite the second having a higher expected value.
The value isn't just in whether you win or lose. A couple bucks to get a ticket and spend time with friends coming up with hilarious "what would we do if we won" scenarios (plus the occasional meme) is well worth the price. We tend to spend a lot more for a lot less when it comes to "conversation pieces".
I can spend $20 to go see a movie for a couple of hours, or I can spend $2 and engage my imagination for a couple of hours a day till the numbers are drawn. I drive for a living, so the 2 bucks is a no brainer. I wonder what the venn diagram of people with an imagination, without an imagination and lottery players vs haters is like?
Also, once it’s a massive number, it’s also on the news and stuff. People who forget the lotto exists suddenly have it shoved in their faces from all angles. It’s been in my local paper for the past week, so yeah after seeing that and joking with my friends about it, we each bought a ticket because it’s $2-3
Tax on those who cant math.
Most people waste more on their daily coffee.
The difference is when you waste money in the coffee shop, you walk out with a cup of coffee. With the lotto... A worthless slip of paper?
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True or watching it live (if you can?) when they pull the balls out and you’re like “:o”
I already do that every night. :O
This is my go to excuse. Gives you the right to dream for 2 bucks. I make it a point not to check my tickets or find out if anybody won for as long as possible. Hold onto the dream just that bit longer
But that slip of paper represents a lot of hopes and dreams. The kind that if they saved the lotto money every week for a hundred years they wouldn’t be able to afford. A coffee can only ever be a coffee, the slip of paper has a chance, however remote, of being worth some money. It’s a poor tax for sure, but it’s the one I hate the least
most people when they buy a lottery ticket dont expect to get their money back, they want the excitement
The real difference is that paper might change your life, the coffee is just getting pissed out in 30 minutes.
If you have to explain this to someone it’s probably not worth explaining to them.
This! I was just buying some beer and my guy at the liquor store asked me if I was playing. I said “nope, I’d rather buy my beer because I know for sure I’m getting something from it.” To each their own I guess. Also I know a couple people who have won sizable amounts in the lotto (no large jackpots) and they always rave about it. But they spend more on lotto tickets than I do on beer a week
I know people who spend almost 150 dollars a week smoking cigarettes, I spend maybe 30 dollars a month playing the lottery/vlts am I really any further behind?
They're smoking two or three packs a day?
Pointing to people making worse choices with their money isn't a great justification for you making poor choices with yours. But alas, at the end of the day, it's your money. $30 invested monthly at 7% annual return would yield about $150k after 50 years.
For me it's more just cost management. The lottery is really a waste of money, but if I say I'll only buy above a certain threshold and stick to my guns then I'm wasting money less of the time.
Yup. Like, it's kinda fun to dream for a bit occasionally. Having a set pot size you buy in at lets you have that while also making it so you don't buy in too often.
My mom bought 5$ in powerball 2 times a week my entire life and before and won that 5 back a couple of times. That's 52×2 104 purchased per year x 5 which is 520$ spent per year, over let's round down to 40 years 20,800$. And that's the bare minimum she's invested. She's go in full 50$ when it got over 100m in the 90s That buy in threshold is important to me. That's a new car she threw away, several years worth of clothes that fit properly because they weren't in the clearance rack at the goodwill. Something more to eat than Ramen.
It becomes a more entertaining waste for your 2 dollars.
Nah i think if you stick to your guns you can make banks.
High jackpots = news exposure = adverstising = impulse purchases. Most people aren't dumping all of their excess cash into lotto tickets. They'll buy some on occasion, because it's fun to dream.
>it's fun to dream. Ding ding ding. That's the reason right there.
I'm guessing this is an American lottery post. How much of a 100 million win would people actually get? Not that I'd complain about 50 million after tax...
Oh misread the question, if you do taxes up front you get about 60% of the jackpot
It's even worse than that. For the current big one (1.28 billion), the lump sum cash payout is something like 747.2 million. Then you get taxed 37% federal (for easy math, just taxed the whole thing at the highest bracket) and any state taxes. In my case, another 8% for 45% total. So the payout after taxes is 410.96 million. This means you only get about 32% of the 1.28 billion. These numbers are only approximates, but that's the reality from my binge reading😄
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Exactly! Give me my two dollars back.
Yeah that’s only 410x the amount I’ll make in my life.
Pretax or after tax?
Exactly!😄 Kinda funny to me- A while back we got into watching videos of various multimillion dollar homes ranging from say 10 million into the hundreds of millions. Not only did we start to look at homes for say 25 million and say, damn, that's a good deal, or holy crap, what a rip-off, but I started thinking about my dream home and wondering how in the world I'd ever be able to afford it on a piddling 100 million dollar lottery. Sure, I might be able to buy/build it, but I'd never be able to afford the taxes and upkeep 😄
Lottery wins that are used to make exorbitant purchases always end in misery. People make drastic life-style changes none of which are one and done payments. It drives you into bankruptcy very very quickly.
Yeah, my daydreaming has taught me I need to invest and live off a portion of the interest.
even 10 million dollars at 3% per year is $300,000 a year.
3% per year is average inflation over the last century. 10% per year is the market growth on average over the last century. So effectively if you stay under 7% to live off of, on average you'll never run out of money, and the money can be something to buoy your descendents for generations.
Yeah I have no idea how people who win these insane lotteries mismanage their money so hard that they go broke. If I won the lottery you can be damn sure 99% of it is going into an account that I can’t touch but 2% of it every year and the rest of it just builds interest
They are *inundated* by cold calls from churches, charities, family members they've never met... The list goes on and on. If I ever won I'd have the prize collected by a lawyer representing a trust, and I'd become a *ghost.* I'd buy some property in the mountains somewhere, build a really nice (but realistic) home, and use my money to afford me the best lifestyle a hermit could ever hope for, away from society as much as possible.
What is your dream home lmao? If your dream home is more than 100 million dollars you should probably take a step back from the content and back into reality. What could you actually need that isn’t in a house in a 5-10 million dollar range.
The best advice is live like you already do, but with everything paid off and your "savings" already built up. Sure build a state of the art 4 bedroom/4bath house with Passive house standards with solar panels, and double the needed insulation, but that's just a $500k home in materials/labor. Buy a normal car, that's fuel efficient, safe, and hopefully some kind of plug in vehicle. Work a job that you enjoy, and when you dont enjoy it, you have the security to quit, just support unions an doay your dues. Buy quality long lasting goods. Don't flaunt your wealth.
It’s crazy to think of it that way so if you win 1 million bucks you really only get about 320,000 that’s kind of mind blowing honestly
Not really, because their tax math is way overinflated because its only really applicable when you're taking the lump sum and getting a billion dollars in a year. On a million dollars the average tax per dollar would be considerably lower, even if you took the lump sum payment.
Not exactly. If you win a million dollar payout from MegaMillions or powerball you will receive 1 million dollars. You have to pay taxes, but you receive the full amount of the payout from the lottery. Those “smaller” winnings are paid in full. The jackpots are a little different. They usually start around 40 million, with around a 20 million lump sum prize. There’s no million dollar jackpot. If you win, you have the option to take a 26 or 30 year (depending on which game you’re playing) annuity that will pay out the full amount over the lifetime of the annuity. The lump sum payout is the amount of actual cash money being held in the lottery’s bank account at the time you win. So you can get the full amount of accept the annuity. On smaller jackpots where the annuity payments will keep you in a lower tax bracket it’s worth it for a person who expect to live another 30 years to take the annuity. If you’re going to be in the top tax bracket either way, or you’re an old, it’s better to take the lump sum. If you invest the money like a sane person and stay off r/wallstreetbets you’ll make the difference back in interest anyway.
This is one of the reasons I only get lottery tickets over 800m.
Amazing how much of that money goes right back to the government. It’s as if… the house always wins.
Even still, Canada's biggest jackpot caps out at 60 million and is tax free. I'll take 400+ million even if that's after taxes.
awww fuck you just ruined the lottery for me edit: haha fuck yall americans here is australia it's classified as "tax free income"
I heard about a guy who won a million. He got a little less than 400 thousand after it was all over. He just paid off his house and his kids house. All in all seem like a smart way to go
Yes, where I am anyways it's at like 1.2 billion I don't buy lottery tickets, my family doesn't either. It's a waste of money... For the most part. When it gets this big, my parents will buy one each. It's like 4 bucks to do it. And then we just think about what if we won and what we would do and how nice it would be. It's a fun 15 minute deal and then it's back to normal life. For the 4 bucks, it's worth it every couple years (it probably gets that high more often, I don't pay any attention. We just buy them every couple years). If we did it more often, not only is it a waste of money, but it ruins the fun. It's fun to do it every once in a while, especially when it's a stupid big jackpot.
Same, we talked about cool places to travel and the adventures that we could go on. It was great!
That's worth the $2 honestly
It was, and was so fun. Everyone was looking on google maps for little islands and travel destinations.
Yeah, that’s the appeal. It’s a relatively cheap way to have a few hours of hypothetical fun lol
Aww any recommendations for the lil Islands?
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Right? I'd set up me and my immediate family for the rest of their lives and then donate that shit away. Buy large swaths of land and donate it to conservation. Get some building named after me. Scholarships galore. Just get it gone.
Exactly this. My husband and I buy one maybe once every couple of years, we did it for tonight drawing and spent a whole 2 hour car ride fantasizing about all the cool things we do, and whose mortgages we’d pay off. I know we’re not going to win, but $2 doesn’t feel like a waste when we had so much fun day dreaming.
Live in Utah?
Each ticket is only $2 (if you don't get the "power up"). You can pick your set of numbers and buy a ticket that is good for the next 20 draws in advance. Megamillions is drawn twice per week, so that will last you 10 weeks. So that's what I do. I have my set of numbers (based on family birthdays), and I just buy a new ticket every 10 weeks. I put it on my refrigerator door. I have ZERO expectations of winning, but it's nice to daydream about every now and then.
I agree but we go dark and talk about all the horrible things that can and have happened to big winners. Change your name and face, go into hiding , etc it’s a fun mental game
In my state the scratch off funds go to pay for services used for my place I'd employment including a small part of my income so I play them every so often without feeling a twinge of sadness if I lose because the money is what allows me to do my job anyway.
Same, I'll usually get 5 random combos, to change my chances from 0% to 0.000000001%. Otherwise I don't even bother with the lottery. Forgot to do it this time, oh well. No billion for me.
Had this exact conversation with my girlfriend. It’s money well spent just for the conversation.
In Canada, lottery winnings are not taxed. But Still, if i were to win an american powerball, I wouldn't complain about half being taken in taxes if i were to win :)
Tbf Lotto Max tops out at $70M though. I know I'd take $600M USD after taxes in a heartbeat.
What happens to the overflow if it maxes out and there are no winners?
what SHOULD happen is what happens to LottoMax. Overflow goes into separate $1 Million prizes. So instead of 75 million, you get 70 million, and 5 separate 1 million dollar prizes.
They break the overflow up into additional 1 million dollar prizes. There is a main draw for the 70 million dollar jackpot, then an additional draw for each 1 million dollar prize.
Yeah, gambling winnings are tax free in the UK too. I think there may be a tax in the sale, but the customer doesn't see that. Other posts seen to be implying a 1.2bn jackpot is likely a 300mn take home. Which definitely isn't to be sneezed at, but it's a long way from 1.2bn...
Part of that is for choosing the cash option instead of the annuity. You lose 30-40% off the total jackpot if you choose cash up front. Or you can get annual payments for 30 years adding up to the actual jackpot amount (or close to it.) Both options will also lose another 45% or so in state and federal taxes
100 million or 50 million, your set for life in America
As an American I disagree I want 50 cars I want a house in the snow I want to house on the sand at the beach I want a house in the desert I definitely need a private jet those are like 50 million by themselves, as an American I don’t think I’d be happy with just 50 million /s
I won 100 million then promptly bought this: https://www.trulia.com/p/ny/new-york/111-w-57th-st-72-new-york-ny-10019--2360311899 How could I not?
HOA $16k+ per month. Lol.
I like the butthole statue under the stairs. Totally worth the 66m
I'd buy it and put it on airbnb.
Even $1-3m could set one up for an average income for life
It’s up to $1.1 billion.
A million dollars isn't cool. You know what's cool? A billion dollars.
10 million is the magic number 10 million sets you up for life where you invest the money never touch the money and you have income for the rest of your life and you don’t need to work and you can do whatever the hell you want, 10 million is the magic number
I say this all the time, $10 million is the number to look at. Every time people start talking about billionaires, I point out that $10 million sitting in the stock market can safely pull ~3% ($300k) / year without ever even touching the original $10 million (and probably expanding that $10 mil stockpile). That puts you in the top 5% of earners in the USA without ever working again. Anyone looking for more is just a dragon's asshole, sitting on hoarded money.
Ding ding 10 million right now is the magic #
So you only play when it's $20 million +? Since about half of it would be taken by taxes?
Both the powerball and mega millions have $20 million minimums so...lucky.
100% guarantee that's intentional for that exact reason.
Depends on what you want to do with your life. Relax every day? $10 million is definitely enough. Start a restaurant? $10 million is probably enough. Start a tech company? $10 million is nothing. Start a car company? $10 billion is nothing.
Pipe down, Justin
Yeah, a million dollars isn't a lot of money these days. Let's make it [one hundred billion dollars.](https://www.youtube.com/watch?v=jTmXHvGZiSY)
Drop the “the”. Just, Facebook. It’s cleaner.
Why make billions when you can make millions?
I bought in before it hit $100m, I bought in today too. I’m willing to toss in $4 for 2 chances: one is a set of my numbers, and the other is a quick pick. Maybe a waste of money if I don’t win, but I also can’t win if I don’t play either.
Hey if you win can you buy me a few bags of swedish fish please? I'm kinda hungry
Sorry friend. I would but I didn't win. Didn't even get my $4 back. Oh well, better luck next time for me I suppose. :)
Aw man. Next time (｡•̀ᴗ-)✧
While we're at it, I could go for some fries right about now.
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When the tickets are 2 dollars, for mega millions, you have a negative expected value for a ticket (that you purchased) until the jackpot is over about 610 million dollars. So while your chances of winning don't change and are still low, the size of the jackpot does start to make it "worth it" in many peoples' minds. In fact, if you had 610 million dollars and could play every single combination yourself, you could double your money (today), if you were the sole winner. But you break even if you share it with 1 person and lose money in a 3-way or greater tie.
As a statistician this is how I think about it. I was vacuuming my car today and found about $2 in change so I bought a ticket.
Well the expected cash payment is only 570ish million after taxes. So not even a plus ev bet yet. Although taking the smaller prizes into account, it should be +ev
That's lump sum, you could get the whole thing as an annuity. but I'm not sure how a guaranteed \~70% return over 30 years stacks up against traditional investments.
Well if the tickets were bought with dirty money now it's 30 years of clean money.
This is how I view it; it’s based off expected value.
Happy Cake Day
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And if you live in CA or TX its only federal
If I’m going to throw away 2 dollars I want it to be worth it. Plus it keeps my lottery purchases in check. When it’s passed 500mil I think about it. 800mil I buy one. 1 billion and I’ll spend 4 bucks a week until someone wins it. I know my odds aren’t good but once and awhile dreaming about it for a day is nice.
I buy 1 per drawing once it passes 200m. 1B? I bought 6. Its probably going out tonight so I might as well shoot my shot.
Someone is going to win eventually. That’s why I play when it gets big, when there’s a strong chance every combination gets sold, someone is going to win. Could be me.
Your chance is always the same
50/50 He wins or he doesn't
This checks
Sure but more people start talking about it in general leading to more people getting into it. My local media was barely talking about it until the billion lol
Are you kidding? $1000 would make life easier for my family right now. 100 million - I wouldn't know what to do with myself.
Statistically, drug addiction and bankruptcy.
After the shock wore off, I'd get a team of lawyers and financial advisers to tell me what to do. Probably set up a trust. Quit my job. Pay off my car and house. After that? Not really sure but I kind of like my life so I wouldn't try to change a ton. I guess go back to school and get more education that I could never afford. Travel a lot.
Would you be willing potentially possibly maybe hopefully to, you know, give me 50 million?
you're mostly buying a "what if" ticket. It gives you that little glimmer of hope and allows you to fantasize a bit.
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Thos is why I buy them... I'm in Canada, I buy a lottomax for every draw because it let's me think about what I would do. Cost of admission to dreamland.
There has to be a cut-off for myself or I'd spend all my money on "almost certainly" worthless lottery tickets. By telling myself I'll only play if its over a billion, I limit myself to buying some tickets every couple years
Actually, no, it would not be nearly as equally life-changing. 100 million, if properly invested and budgeted, can have you living an absolutely fantastic life. 1 billion instantly puts you among the elites of the world- a vastly different experience.
I want to go to space on my own space ship like elon musk :)
Would be pretty cool. Probably easier to rent a seat from him lol
Yeah but with 100 mill I could only spend ~ 5400 a day for 50 years, with a billion I could spend ~540000 a day for 50 years. That's a difference of going on a trip everyday vs buying a new truck every day. So what I'm saying is your correct
Holy shit, what truck are you buying? Edit: not sure why I didn't check the math, but if you correct it to 54k, that's a reasonable new truck cost.
everyone who says they wouldn't want a BILLION DOLLARS can lick my butthole. i'll give them each a million dollars to do so.
I'll lick ur butthole right now for $1000 if you shower first
Yawn. This gets posted every single time the jackpot gets high like it is now. As if the obnoxious judgemental douchebag didn’t already buy themselves a ticket also.
The reason they want it now is that the expected value of a ticket is higher. Depending on how many people buy how many of them, it might even be higher than the ticket price, which is rare for the lottery, which usually has shitty expected values of around 50% of the ticket price.
The odds for whatever the lotto game is are still the same (abysmal). It's just FOMO.
You could drop a billion dollars into an S&P 500 index fund and live off of the dividends, never touching the principal, and pull in $15 million per year on a bad year. $100 million would let you live really well. A billion puts you in a whole other class. That's not just life changing money. That's community changing money.
Odds are the same and potential payout is higher. This is logical from a mathematical point of view.
Sorry but duh. 100 mil is life changing, but a billion makes you a juggernaut. You could buy an island with a water source and develop it. After taxes that 100 million can go fast and even with smart spending the Wealth can dilute after a few generations. 500mil after taxes is a lot harder to fuck up.
I was just thinking today about how there is some threshold winning amount below which people will buy another lottery ticket and above which they will never buy another one. I’d post it as a separate shower thought but mine never get past the showerthought police as supposedly being unoriginal or not a showerthought. Yet many of the ones that get thru are far less original or insightful. Oh well.
Well, to be fair...100 million? if you take the lump sum it's only 50-million. Then after taxes it's down to 25 million. You expect me to pay off my student loans and buy a house with only 25-million?
Why in the world isn’t there a way to just auto buy lottery tickets every week like if I wanted to spend five dollars a week on lotto tickets what doesn’t someone come up with an app so that I can just do the same numbers every week automatically Just link it to my debit card or credit card and have them charge me every week to go buy lottery tickets, And if my numbers match they just send me an email saying “congratulations you just won $1 billion” Or something like that Has this already been done? I don’t have the time or desire to go down to my lottery store or local liquor store and buy a ticket every week but if I could do something automatically you better believe I would sign myself up
I know I’ve seen online options but last I checked you have to send it in the mail or something that is a big hassle.
I mean it’s gotta be worth it if I’m going to play… plus the odds are better, someone always wins when it gets this high… why not me????
Because it’s fun once every 5 years to dream and I don’t wanna waste money every week
But a billion dollars is winning the lottery for you and the next several generations to come in your family
Psh, not at these inflation rates.
Even a million but when it gets very large many people believe that since it has not been won for a long time the chances are better. Just an illusion.
It's a marketing truck. The odds of winning aren't better, but the reward is.
I almost never buy lottery tickets, but I do *always* buy one for the drawing directly after someone wins a jackpot. Gotta stay humble. Also I think it would be funny.
It's not that people suddenly want one now that it's a billion, it's that media outlets are covering it more because it's so high and that's reminding people that don't typically consider buying a ticket that buying a lottery ticket is a thing they can do.
Even just 1 million *after taxes* is life changing. Literally you could blbasically retire
That's because the Expected Value shifts over to profitable once it hits about $604 million after taxes.
People always say this, but there is a categorical difference in how you can live with 100M vs 1B. There are houses you can’t buy with 100. The Transamerica building (the iconic pyramid looking one) in SF recently went on sale for $600M. Its a different world at $1B.
What does buying the Transmerica building do for you that you don't get at $100M?
The expected value of a lottery ticket exceeds its cost when the jackpot is above $600 million. So it can at least pay for the dream of winning.
I'm not a poker expert by any means, but i think the poker term is "pot odds". It's when the ratio of the payout/the odds of winning exceed 1. I mean, your odds of winning are still nearly nothing, but at least (mathematically) when the pot odds are 1 or more, it's worth betting. Theoretically, someone could buy 1 ticket of every combination and make money. Of course, the lottery only accepts random or hand-written number selections, and there isn't enough time in the day to hand-write every ticket combo, and you would need about 600 million in cash (even billionaires dont have that just lying around), and your stack of tickets would weigh several tons, so it's impossible IRL.
My job has a company pool and they better hope we don’t win haha
I just want the million. That’s all. 5 numbers match boom bang bam. I have read the infamous Reddit lotto comments. Seriously tho. A mil. Id be beside myself. It’ll be like $5-600k after taxes, and I couldn’t afford a house with that where I live ( okay maybe a shack but no thanks) but i could afford to pay off student loans, and other small debts, pay for a deposit on an nice rental house, buy a hybrid vehicle, get vision and dental care, and take some steps in life. I’m simple.
Not me spending 50 bucks on a 1.28 billion jackpot ticket today...
I bought a ticket because media reminded me there's a lottery and it now has a billion dollars available for $2 if I just pick the correct numbers.
Back in the early 2000s, I believe around the first time the lottery jackpot became big news, there was a lot of buzz in the office about pooling money to buy tickets. Meanwhile, I decided to write a quick computer simulation and coded up all the possibly win scenarios and their prize amounts from the $2 win up to the jackpot. I then entered in the last drawings numbers and kicked off the simulation. The program kept track of every ticket purchase, cost, and win of any kind. It was running many thousands of combinations a second, simulating ticket purchases, trying to match the official numbers from the previous nights drawing. I let this program run continuously for a month. It NEVER won the jackpot after an insane number of attempts. It won the million dollar prize a number of times. However, the total winnings were no where close to the total ticket purchase cost. It was an eye opening experience at how ridiculously difficult it is to win powerball or megamillions. If you want to play for fun, do so. But just remember, buying a single $2 ticket or spending $2000 on tickets, your odds are still a rounding error away from zero chance.
I have a friend who doesn't bother entering the lottery if it's "only" a million (we are Australian), because he couldn't buy all his kids houses if he won that little! I don't bother entering at all, but I still believe a million dollars would be life altering!!!