When To Start Caring About the Powerball Jackpot
September 28, 2013 3:12 PM Subscribe
Walter Hickey at Business Insider looks at when you should buy a Powerball ticket and whether to take the lump sum or annuity if you win.
Psshaw. Where do they get off calling themselves Business Insider. I don't need the odds on winning the lottery...just the numbers.
posted by ecourbanist at 3:25 PM on September 28, 2013 [4 favorites]
posted by ecourbanist at 3:25 PM on September 28, 2013 [4 favorites]
The rational winner will put it in at least a bank account, or most rationally the market.
Rationally? The market?
posted by Thorzdad at 3:38 PM on September 28, 2013 [8 favorites]
Rationally? The market?
posted by Thorzdad at 3:38 PM on September 28, 2013 [8 favorites]
I plan to invest heavily in commodities, specifically canned goods and ammunition.
posted by nathancaswell at 3:44 PM on September 28, 2013 [6 favorites]
posted by nathancaswell at 3:44 PM on September 28, 2013 [6 favorites]
I asked basically the same question over in Ask about a year ago.
Here is the best answer.
posted by lattiboy at 3:49 PM on September 28, 2013
Here is the best answer.
posted by lattiboy at 3:49 PM on September 28, 2013
I buy one every week. I don't expect to ever win but the ability to fantasize about what I would do with the jackpot is well worth $2 a week.
My brother rails about it as an "extra tax for people who are bad at math". I point out that his Starbuck's is an extra tax on people who are too lazy to make coffee.
posted by double block and bleed at 3:54 PM on September 28, 2013 [63 favorites]
My brother rails about it as an "extra tax for people who are bad at math". I point out that his Starbuck's is an extra tax on people who are too lazy to make coffee.
posted by double block and bleed at 3:54 PM on September 28, 2013 [63 favorites]
Winters: You were gambling, Buck.
Compton: So what? Soldiers do that. I don't deserve a reprimand for it.
Winters: What if you'd won?
Compton: What?
Winters: What if you'd won? Don't ever put yourself in the position where you can take from these men.
That's why you don't gamble. Lose, and you're a victim. Win, and everyone else who played is your victim.
posted by officer_fred at 3:59 PM on September 28, 2013 [6 favorites]
Compton: So what? Soldiers do that. I don't deserve a reprimand for it.
Winters: What if you'd won?
Compton: What?
Winters: What if you'd won? Don't ever put yourself in the position where you can take from these men.
That's why you don't gamble. Lose, and you're a victim. Win, and everyone else who played is your victim.
posted by officer_fred at 3:59 PM on September 28, 2013 [6 favorites]
I'm taking the lump sum cuz I'm dumping it offshore and then moving to the Mediterranean. Fuck the spare change; divide it amongst yourselves.
posted by Ardiril at 4:24 PM on September 28, 2013
posted by Ardiril at 4:24 PM on September 28, 2013
I'm taking the annuity. Otherwise I'd spend it all at once. On candy.
posted by anonymisc at 4:28 PM on September 28, 2013 [5 favorites]
posted by anonymisc at 4:28 PM on September 28, 2013 [5 favorites]
First, be smart from the very beginning. Pulverize all teeth, burn off fingerprints, and disfigure the face...
Oh, sorry, you wanted to know what to do if you won the lottery? No idea.
posted by blue_beetle at 4:33 PM on September 28, 2013 [8 favorites]
Oh, sorry, you wanted to know what to do if you won the lottery? No idea.
posted by blue_beetle at 4:33 PM on September 28, 2013 [8 favorites]
I buy one every week. I don't expect to ever win but the ability to fantasize about what I would do with the jackpot is well worth $2 a week.
My brother rails about it as an "extra tax for people who are bad at math". I point out that his Starbuck's is an extra tax on people who are too lazy to make coffee.
I regret that I can favorite this only once. It's very much my opinion.
Whenever I travel, I buy a lottery ticket. Just because it's fun to spend the train ride back home thinking about how lovely it would be to never have to worry about money again.
posted by MissySedai at 4:46 PM on September 28, 2013 [6 favorites]
My brother rails about it as an "extra tax for people who are bad at math". I point out that his Starbuck's is an extra tax on people who are too lazy to make coffee.
I regret that I can favorite this only once. It's very much my opinion.
Whenever I travel, I buy a lottery ticket. Just because it's fun to spend the train ride back home thinking about how lovely it would be to never have to worry about money again.
posted by MissySedai at 4:46 PM on September 28, 2013 [6 favorites]
Statistically I have a better chance of winning the lottery than understanding the regression models of lottery participation in that article.
posted by Slack-a-gogo at 4:47 PM on September 28, 2013 [25 favorites]
posted by Slack-a-gogo at 4:47 PM on September 28, 2013 [25 favorites]
The Kelly criterion says that even if buying a lottery ticket has a positive expected value, it probably doesn't make sense to play.
posted by teraflop at 4:49 PM on September 28, 2013 [4 favorites]
posted by teraflop at 4:49 PM on September 28, 2013 [4 favorites]
It occurs to me that even the whooping $400M is almost chump change compared to many of the 1% - not even the biggest powerball win can afford some of those lifestyles.
But that's ok. I've got the down-to-earth gumption to tighten my belt and make ends meet on a paltry few million.
posted by anonymisc at 4:59 PM on September 28, 2013 [5 favorites]
But that's ok. I've got the down-to-earth gumption to tighten my belt and make ends meet on a paltry few million.
posted by anonymisc at 4:59 PM on September 28, 2013 [5 favorites]
Take lump sum. Secretly place in fireproof mattress.
posted by notreally at 5:01 PM on September 28, 2013 [2 favorites]
posted by notreally at 5:01 PM on September 28, 2013 [2 favorites]
I did not see anything in that article about when you should buy a Powerball ticket. The final sentence seems to imply the answer "Never."
posted by charlie don't surf at 5:05 PM on September 28, 2013 [2 favorites]
posted by charlie don't surf at 5:05 PM on September 28, 2013 [2 favorites]
My brother rails about it as an "extra tax for people who are bad at math". I point out that his Starbuck's is an extra tax on people who are too lazy to make coffee.
Any number of wrongs don't make a right. If we all waste money in little ways, so much the worse for all of us.
posted by officer_fred at 5:23 PM on September 28, 2013 [2 favorites]
Any number of wrongs don't make a right. If we all waste money in little ways, so much the worse for all of us.
posted by officer_fred at 5:23 PM on September 28, 2013 [2 favorites]
1. The expected value for the cash-up front Powerball winnings is always negative. It will never make sense to take the money up front, whether you believe the linear model or the polynomial model.
2. The expected value for the annuity, however, is break-even when the jackpot exceeds $345 million in the linear participation model and $380 million in the polynomial model. Since the polynomial model seems more accurate at higher jackpots, go with that one.
3. Taxes will probably mean that it is never profitable or sensible to play the lottery. So if you do play, try to minimize them.
I was under the impression that taxes make any losing ticket a donation to the state, as if a tax game, to help cover expenses for endangered programs like health and education. Otherwise there would be absolutely no reason to have it. So if you do or don't play, try to maximize them for potential winners.
posted by Brian B. at 5:25 PM on September 28, 2013
2. The expected value for the annuity, however, is break-even when the jackpot exceeds $345 million in the linear participation model and $380 million in the polynomial model. Since the polynomial model seems more accurate at higher jackpots, go with that one.
3. Taxes will probably mean that it is never profitable or sensible to play the lottery. So if you do play, try to minimize them.
I was under the impression that taxes make any losing ticket a donation to the state, as if a tax game, to help cover expenses for endangered programs like health and education. Otherwise there would be absolutely no reason to have it. So if you do or don't play, try to maximize them for potential winners.
posted by Brian B. at 5:25 PM on September 28, 2013
"when you should buy a Powerball ticket and whether to take the lump sum or annuity if you win"
Best. Linkbait. Ever.
Attracts the demographic that'll click the "one weird tip" ads every time...
"Business Insider" is becoming a more comically ironic title every day.
posted by oneswellfoop at 6:04 PM on September 28, 2013 [1 favorite]
Best. Linkbait. Ever.
Attracts the demographic that'll click the "one weird tip" ads every time...
"Business Insider" is becoming a more comically ironic title every day.
posted by oneswellfoop at 6:04 PM on September 28, 2013 [1 favorite]
It occurs to me that even the whooping $400M is almost chump change compared to many of the 1% - not even the biggest powerball win can afford some of those lifestyles.
Actually, that would put you among the highest earners in the country. If you netted $250 million after taxes, you could easily earn $10 million a year without touching principal. That would put you in the rare club of about 8300 people who earn that much in the U.S -- the 0.0025% -- about 1 in 40,000 people.
posted by JackFlash at 6:34 PM on September 28, 2013 [6 favorites]
Actually, that would put you among the highest earners in the country. If you netted $250 million after taxes, you could easily earn $10 million a year without touching principal. That would put you in the rare club of about 8300 people who earn that much in the U.S -- the 0.0025% -- about 1 in 40,000 people.
posted by JackFlash at 6:34 PM on September 28, 2013 [6 favorites]
What teraflop said.
I paid off my house on the proceeds from advantage play gambling. Sadly, the opportunities to do that no longer exist because casinos dont give shit away any more.
But even if you have a positive EV on Powerball, the chances that you will have enough play opportunities to realize your EV make your chances of getting killed in an auto accident on the way to the lottery store look like a certainty by comparison.
posted by localroger at 6:57 PM on September 28, 2013 [2 favorites]
I paid off my house on the proceeds from advantage play gambling. Sadly, the opportunities to do that no longer exist because casinos dont give shit away any more.
But even if you have a positive EV on Powerball, the chances that you will have enough play opportunities to realize your EV make your chances of getting killed in an auto accident on the way to the lottery store look like a certainty by comparison.
posted by localroger at 6:57 PM on September 28, 2013 [2 favorites]
If we all waste money in little ways, so much the worse for all of us.
Thank goodness finger-wagging is free!
posted by MrBadExample at 7:51 PM on September 28, 2013 [10 favorites]
Thank goodness finger-wagging is free!
posted by MrBadExample at 7:51 PM on September 28, 2013 [10 favorites]
I look forward to the follow-up article about when the best time to walk in the woods in order to meet the enchantress is, and whether I should take her offer of the power of flight or the power to talk to wild animals.
posted by themanwho at 8:27 PM on September 28, 2013 [8 favorites]
posted by themanwho at 8:27 PM on September 28, 2013 [8 favorites]
Hm. What I have learned from this and my subsequent research is that if I ever decide to play Powerball (or any other high-jackpot lottery game), I should buy my ticket in Illinois, rather than Missouri, because in Illinois, I could claim it through an LLC or a trust. In Missouri, e'rybody gets to know your bizness. Of course, the taxes might be more complicated/larger if I win it in Illinois. But I'd probably be able to afford someone to help me figure that out...
posted by limeonaire at 8:30 PM on September 28, 2013 [2 favorites]
posted by limeonaire at 8:30 PM on September 28, 2013 [2 favorites]
Anyone who would take the power to talk to animals over virtually any other power is an insane person.
posted by nathancaswell at 8:43 PM on September 28, 2013
posted by nathancaswell at 8:43 PM on September 28, 2013
Guess you forgot bacteria count as animals. Sucker.
posted by Potomac Avenue at 8:47 PM on September 28, 2013 [1 favorite]
posted by Potomac Avenue at 8:47 PM on September 28, 2013 [1 favorite]
"The rational winner will put it in at least a bank account, or most rationally the market."
Hee. Hee hee. Ha ha ha.
posted by JHarris at 9:01 PM on September 28, 2013 [2 favorites]
Hee. Hee hee. Ha ha ha.
posted by JHarris at 9:01 PM on September 28, 2013 [2 favorites]
Of course, the reason to play Powerball, if any, is because you think it's fun to play Powerball, not because of the expected dollar value of the ticket.
Oh yes, filling in arbitrary numbers of a slip of paper is my favorite game! I used to do word searches but they were too hard.
posted by JHarris at 9:02 PM on September 28, 2013 [7 favorites]
Oh yes, filling in arbitrary numbers of a slip of paper is my favorite game! I used to do word searches but they were too hard.
posted by JHarris at 9:02 PM on September 28, 2013 [7 favorites]
I buy one every week. I don't expect to ever win but the ability to fantasize about what I would do with the jackpot is well worth $2 a week.
Do what you want with your money, but I don't get that. You can fantasize about what you'd do if you won the lottery without ever buying a ticket.
If you're bothered by the fact that you have zero change without playing instead of essentially zero by playing then just learn CPR and fantasize about what you'll do with the reward money after you save Bill Gates' life one day.
It's always free to dream (or at least it should be).
posted by willnot at 9:47 PM on September 28, 2013 [1 favorite]
Do what you want with your money, but I don't get that. You can fantasize about what you'd do if you won the lottery without ever buying a ticket.
If you're bothered by the fact that you have zero change without playing instead of essentially zero by playing then just learn CPR and fantasize about what you'll do with the reward money after you save Bill Gates' life one day.
It's always free to dream (or at least it should be).
posted by willnot at 9:47 PM on September 28, 2013 [1 favorite]
You spend the day posing hypothetical questions to yourself!
You like your co-workers. Will you give them any money when you win? Maybe like a 5-10k "thanks for working with me" award, or something. That's fucking pennies to you now!
Will you keep your job? Travel the world? What will you spend the money on?
Then you don't win and life returns to normal. Or, if you're like me, you kind of forget you bought a ticket until a few days after the drawing, when the winner's location has already been nailed down to "not your state".
On preview, a chance is still a chance, willnot. Psychologically, at least.
posted by graventy at 9:50 PM on September 28, 2013 [3 favorites]
You like your co-workers. Will you give them any money when you win? Maybe like a 5-10k "thanks for working with me" award, or something. That's fucking pennies to you now!
Will you keep your job? Travel the world? What will you spend the money on?
Then you don't win and life returns to normal. Or, if you're like me, you kind of forget you bought a ticket until a few days after the drawing, when the winner's location has already been nailed down to "not your state".
On preview, a chance is still a chance, willnot. Psychologically, at least.
posted by graventy at 9:50 PM on September 28, 2013 [3 favorites]
If you plan on winning a lottery, you should consider emigrating to a country where you won't get charged tax on it.
Then again, the biggest US lottery might still be more after taxes than what you'll find elsewhere.
posted by ODiV at 10:44 PM on September 28, 2013
Then again, the biggest US lottery might still be more after taxes than what you'll find elsewhere.
posted by ODiV at 10:44 PM on September 28, 2013
I wonder if there is a "sweet spot" in the jackpot amount, where you could win a lump sum and then buy all combinations of tickets of subsequent lotteries in order to both get a guaranteed win and minimize odds of sharing with another winner. The risk is that you wouldn't always win on your own, but more often than not, you'd take the prize for yourself. If a subsequent jackpot is higher than your initial outlay, this seems like a way to grow the initial lump sum at a rate greater than 4%.
posted by Blazecock Pileon at 12:37 AM on September 29, 2013
posted by Blazecock Pileon at 12:37 AM on September 29, 2013
I buy one every week. I don't expect to ever win but the ability to fantasize about what I would do with the jackpot is well worth $2 a week.
This just gave me a weird bit of insight into my father. He's retired, and while probably not what one would call rich, has done pretty ok for himself in the nest egg department. He has mostly spent his retirement so far doing fuck-all except for finding new places in the house to take naps and being generally cranky for no discernible reason. Every so often we corner him and try and figure out what it is he wants to do with his retirement. He has enough money to do pretty much any of the things most people fantasize about doing in retirement. Getting a boat and fishing, traveling the world, tinkering around on an old hot-rod, Slowly driving an RV in front of people in a hurry to get somewhere on the freeway...He says no to any and all suggestions.
But...He religiously buys lottery tickets every week. Which means he's fantasizing about something. All this time we thought he wasn't interested in doing anything. Turns out he might just have more expensive tastes than we realized.
posted by billyfleetwood at 12:38 AM on September 29, 2013 [8 favorites]
This just gave me a weird bit of insight into my father. He's retired, and while probably not what one would call rich, has done pretty ok for himself in the nest egg department. He has mostly spent his retirement so far doing fuck-all except for finding new places in the house to take naps and being generally cranky for no discernible reason. Every so often we corner him and try and figure out what it is he wants to do with his retirement. He has enough money to do pretty much any of the things most people fantasize about doing in retirement. Getting a boat and fishing, traveling the world, tinkering around on an old hot-rod, Slowly driving an RV in front of people in a hurry to get somewhere on the freeway...He says no to any and all suggestions.
But...He religiously buys lottery tickets every week. Which means he's fantasizing about something. All this time we thought he wasn't interested in doing anything. Turns out he might just have more expensive tastes than we realized.
posted by billyfleetwood at 12:38 AM on September 29, 2013 [8 favorites]
ODiV: American citizens have to pay income tax even when living abroad. And to cancel your citizenship you have to pay too.
posted by Goofyy at 12:40 AM on September 29, 2013
posted by Goofyy at 12:40 AM on September 29, 2013
If you ask me, calculating the point at which the expected value becomes positive is kind of a red herring, because of diminishing marginal utility.
Put it this way: Which would you rather have, a 99% chance of receiving ten million dollars, or a 1% chance of receiving a billion dollars? The mean value of option 1 is 9.9 milion, and the mean value of option 2 is 10 million. So by the kind of logic expressed in this article, you should prefer the second choice. But that's clearly stupid! Ten million is already enough to put you into the wealthiest 1% of Americans by net worth (and quite likely by income as well, if you invest it wisely). It's definitely enough that you wouldn't need a job any more. Who in their right mind would give up a near-certain shot at that for such a slim chance at more?
The point is that simply calculating the expected return misses the context. The difference between being flat broke and having a thousand dollars in the bank is more significant than the difference between having 50 million and having 51 million. Even when the powerball jackpot is isn't high enough to give the tickets a positive mean value, it's often high enough to be life-transforming for the winners. I posit that once the amount is enough to transform your life, the exact value doesn't matter. Is a 1 in 175,223,516 chance at a life-transforming amount of money worth the price of a $2 lottery ticket? If it is, then it's worth it even when the expected value is negative. If it isn't, then it's not worth it even when the expected value is positive.
The idea that something can have negative expected value and still be worthwhile isn't even novel. Insurance always has negative expected value. The point of insurance isn't for the policy holders to make a profit, but to even out the risk, so that instead of a small chance of a catastrophic loss, you get a certainty of an affordable one. Lotteries are essentially the same thing in reverse: you accept an affordable loss to obtain a small chance of a catastrophic gain, if that makes any sense. I'm not saying that playing the lottery is worthwhile, but I can imagine a world where it is.
(Personally, I played the lottery exactly once. I figured that if the gods wanted me to become a millionaire without working, I had to give them an opportunity to make it happen. When they didn't do so, I figured I had to just accept their decision.)
posted by baf at 12:41 AM on September 29, 2013 [15 favorites]
Put it this way: Which would you rather have, a 99% chance of receiving ten million dollars, or a 1% chance of receiving a billion dollars? The mean value of option 1 is 9.9 milion, and the mean value of option 2 is 10 million. So by the kind of logic expressed in this article, you should prefer the second choice. But that's clearly stupid! Ten million is already enough to put you into the wealthiest 1% of Americans by net worth (and quite likely by income as well, if you invest it wisely). It's definitely enough that you wouldn't need a job any more. Who in their right mind would give up a near-certain shot at that for such a slim chance at more?
The point is that simply calculating the expected return misses the context. The difference between being flat broke and having a thousand dollars in the bank is more significant than the difference between having 50 million and having 51 million. Even when the powerball jackpot is isn't high enough to give the tickets a positive mean value, it's often high enough to be life-transforming for the winners. I posit that once the amount is enough to transform your life, the exact value doesn't matter. Is a 1 in 175,223,516 chance at a life-transforming amount of money worth the price of a $2 lottery ticket? If it is, then it's worth it even when the expected value is negative. If it isn't, then it's not worth it even when the expected value is positive.
The idea that something can have negative expected value and still be worthwhile isn't even novel. Insurance always has negative expected value. The point of insurance isn't for the policy holders to make a profit, but to even out the risk, so that instead of a small chance of a catastrophic loss, you get a certainty of an affordable one. Lotteries are essentially the same thing in reverse: you accept an affordable loss to obtain a small chance of a catastrophic gain, if that makes any sense. I'm not saying that playing the lottery is worthwhile, but I can imagine a world where it is.
(Personally, I played the lottery exactly once. I figured that if the gods wanted me to become a millionaire without working, I had to give them an opportunity to make it happen. When they didn't do so, I figured I had to just accept their decision.)
posted by baf at 12:41 AM on September 29, 2013 [15 favorites]
I'm with the others who buy lottery tickets as a ticket to fantasies. I used to call it my one dollar day dream. (but they raised the price.) I don't buy every week though, only when the fancy hits me.
But then I throw it in my wallet, and purposely don't look at it. Because, you see, I could be out there, walking around as a millionaire and I don't even know it yet. Everytime I open my wallet, I see the ticket and "oh yeah, I could be obscenely rich right now and not even know it."
posted by [insert clever name here] at 2:26 AM on September 29, 2013 [3 favorites]
But then I throw it in my wallet, and purposely don't look at it. Because, you see, I could be out there, walking around as a millionaire and I don't even know it yet. Everytime I open my wallet, I see the ticket and "oh yeah, I could be obscenely rich right now and not even know it."
posted by [insert clever name here] at 2:26 AM on September 29, 2013 [3 favorites]
But...He religiously buys lottery tickets every week. Which means he's fantasizing about something. All this time we thought he wasn't interested in doing anything. Turns out he might just have more expensive tastes than we realized.
No, not necessarily, it's the risk-free aspect of the daydream that makes it nice. Sure, he could probably afford to buy that hot rod, or that RV, but then he'd actually have to do it. I could probably make some changes in my life that would let me do x% of the things I daydream (or rather, bullshit with the wife) about with a lottery ticket. We could have a second home in another country, we could eat out less during the week and go snorkling in Hawaii, but then I'd actually have to get tickets and do it and might not enjoy it as much as I thought, and, and, and... Just like many to most people could probably re-enact things they've seen in porn, sometimes it's just nice with a not-gonna-happen fantasy.
posted by Iteki at 5:25 AM on September 29, 2013 [3 favorites]
No, not necessarily, it's the risk-free aspect of the daydream that makes it nice. Sure, he could probably afford to buy that hot rod, or that RV, but then he'd actually have to do it. I could probably make some changes in my life that would let me do x% of the things I daydream (or rather, bullshit with the wife) about with a lottery ticket. We could have a second home in another country, we could eat out less during the week and go snorkling in Hawaii, but then I'd actually have to get tickets and do it and might not enjoy it as much as I thought, and, and, and... Just like many to most people could probably re-enact things they've seen in porn, sometimes it's just nice with a not-gonna-happen fantasy.
posted by Iteki at 5:25 AM on September 29, 2013 [3 favorites]
Is a 1 in 175,223,516 chance at a life-transforming amount of money worth the price of a $2 lottery ticket? If it is, then it's worth it even when the expected value is negative.
You're right that expected utility, not expected dollar value is the right computation (though Abrams and Garibaldi argue, persuasively to me, that even lots of positive-EU bets are bad bets.) But there's more to this issue. It makes sense to say "$2 won't change your economic condition, $10 million is life-transforming." (I think this argument is most commonly associated with Milton Friedman if I remember right.)
But that's you; you played the lottery exactly once. That's not how most people play. If you spend $2 every day, and you're not rich, that really does become an expense worth thinking about. It's like paying for another phone you never use.
posted by escabeche at 5:38 AM on September 29, 2013
You're right that expected utility, not expected dollar value is the right computation (though Abrams and Garibaldi argue, persuasively to me, that even lots of positive-EU bets are bad bets.) But there's more to this issue. It makes sense to say "$2 won't change your economic condition, $10 million is life-transforming." (I think this argument is most commonly associated with Milton Friedman if I remember right.)
But that's you; you played the lottery exactly once. That's not how most people play. If you spend $2 every day, and you're not rich, that really does become an expense worth thinking about. It's like paying for another phone you never use.
posted by escabeche at 5:38 AM on September 29, 2013
Goofyy: "ODiV: American citizens have to pay income tax even when living abroad. And to cancel your citizenship you have to pay too."
Also, my hypothetical lottery win is not going to transform me into an asshole Republican overnight.
posted by graventy at 6:26 AM on September 29, 2013
Also, my hypothetical lottery win is not going to transform me into an asshole Republican overnight.
posted by graventy at 6:26 AM on September 29, 2013
"Is Business Insider just another linkbait listicle kinda place like Buzzfeed or whatever, except with a name that makes it sound like you should read it at work?"
posted by box at 6:47 AM on September 29, 2013
posted by box at 6:47 AM on September 29, 2013
Since we're sharing, by the way, I've never bought a lottery ticket in my life.
I have, however, spent plenty of money on even stupider shit than that.
posted by box at 6:51 AM on September 29, 2013 [4 favorites]
I have, however, spent plenty of money on even stupider shit than that.
posted by box at 6:51 AM on September 29, 2013 [4 favorites]
I won the lottery once. Turned my $2 into $4. I didn't claim that money on my taxes either.
posted by cjorgensen at 7:37 AM on September 29, 2013 [2 favorites]
posted by cjorgensen at 7:37 AM on September 29, 2013 [2 favorites]
I didn't claim that money on my taxes either.
Criminal! I bet you also turn right on red without stopping first.
posted by localroger at 8:18 AM on September 29, 2013
Criminal! I bet you also turn right on red without stopping first.
posted by localroger at 8:18 AM on September 29, 2013
I've never purchased a lottery ticket. My girlfriend occasionally does and based on a few of these articles I've convinced her that waiting until "powerball jackpot > 300 million" is a reasonable heuristic to waste less of your money on lottery tickets. The expectency is still certainly < 1 but I think we'd all rather spend our entertainment dollar on a -$0.10 ticket than a -$0.99 one.
If I somehow came into a large chunk of change I'd stock the first ~4 million in CDARS, put the rest into index funds and not change anything about my life for at least a year.
posted by Skorgu at 9:32 AM on September 29, 2013
If I somehow came into a large chunk of change I'd stock the first ~4 million in CDARS, put the rest into index funds and not change anything about my life for at least a year.
posted by Skorgu at 9:32 AM on September 29, 2013
American citizens have to pay income tax even when living abroad.
Yeah, that's why I used the term emigrate instead of move, though I didn't realize shedding your US citizenship was costly. Still, if you're going to win the lottery it's probably worth the investment.
posted by ODiV at 10:56 AM on September 29, 2013 [1 favorite]
Yeah, that's why I used the term emigrate instead of move, though I didn't realize shedding your US citizenship was costly. Still, if you're going to win the lottery it's probably worth the investment.
posted by ODiV at 10:56 AM on September 29, 2013 [1 favorite]
You "only" need around $9-10 million in net worth or an income of about $350,000ish /year to be part of the top 1% in the US .
Yet at that point the income distribution is starting to switch into seriously asymptotic gear, so as was pointed out above, even an unimaginably epic powerball win puts you at the lower rung of... nearly ten thousand other Americans, and once you start looking at the wealth of the upper bound, the powerball doesn't get you even close. It seems like a lot (because it is), but the income inequality in this country still utterly dwarfs it.
posted by anonymisc at 3:22 PM on September 29, 2013 [1 favorite]
Yet at that point the income distribution is starting to switch into seriously asymptotic gear, so as was pointed out above, even an unimaginably epic powerball win puts you at the lower rung of... nearly ten thousand other Americans, and once you start looking at the wealth of the upper bound, the powerball doesn't get you even close. It seems like a lot (because it is), but the income inequality in this country still utterly dwarfs it.
posted by anonymisc at 3:22 PM on September 29, 2013 [1 favorite]
(I was not suggesting that one in every hundred Americans has $400 million dollars sitting around. I happen to know 100 Americans personally. A quick informal survey reveals that fewer than 1 in 100 people here have $400M under the mattress. Either that, or I'm hanging with the wrong crowd.)
posted by anonymisc at 3:26 PM on September 29, 2013
posted by anonymisc at 3:26 PM on September 29, 2013
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If you don't mind a little more math, the article about good and bad bets in the lottery by Aaron Abrams and Skip Garibaldi is terrific. It won a big writing award from the Mathematical Association of America, and rightly so.
posted by escabeche at 3:19 PM on September 28, 2013 [13 favorites]