Did you buy a Powerball lottery ticket?

[OldPro]

If you won it would certainly end your ERE planning right away. You could give away 1.4 Billion and still have enough to fulfill your ERE dreams. Whether you would give that much away or not is of course another question.

I never buy lottery tickets, it just doesn't make any sense to me. People know their chances of winning are negligible but hope springs eternal as they say and so they buy based on hope alone. They ignore logic.

If I said to you, give me $2 and I will insure you against getting struck by lightning. If you get struck, I will pay you $50 million. Would you think that insurance was worth paying me even $2 or would you figure I was going to make a lot of money from suckers stupid enough to pay me.

If I suggested you pick the numbers, 1, 2, 3, 4, 5, 6 for your lottery ticket, would you think those were as good a choice as any for your ticket? If not, why not? All the numbers have exactly the same chance of coming up after all.

When you see them talking about the lottery odds of 292 million to 1 on TV, that really doesn't tell anyone anything. That's a number people simply cannot comprehend in their head. Studies have shown that for most people, any number much larger than their annual income is a number they can't really put into perspective.

So here is my question for all our mathematically inclined posters here. How would you describe the chances of winning the lotter to someone in a way they can comprehend? Telling them the odds are 292 million to 1 is pointless, you have to put it in a way they will understand.

[cmonkey]

No, although I about shit a brick when I saw the sign at local grocery store.

$130 Billion

It took me a little while to realize the electronic sign didn't have a period on it.

[GandK]

No, but my father apparently bought some on behalf of most of his fourth-and fewer circles. I got a Facebook message over the weekend that said, "Going to buy Powerball tickets for friends and family, have you in for 5%." I laughed about it to G. He began to blush, walked over to his chest of drawers and withdrew two tickets from the top drawer. <facepalm>

I've asked the questions more than once, OldPro. Apparently this lottery stuff is not really about money. "It's about the dream, K... it's fun to dream about what we'd do with all that money." And I keep thinking, how is it that you people can't dream without lottery tickets? And why can't you make a plan to accomplish some of that stuff with the money you do have? Perhaps the odds, minuscule as they are, somehow enable people who don't normally let their imaginations run wild to do so.

[Ydobon]

I spend £104/y on Euromillions tickets (one a week). I suspect that I enjoy the weekly daydream about how I'd spend the winnings almost as much as I'd enjoy actually winning. I wouldn't play the lottery if I was FI, but the temptation to skip ahead to the end is strong, no matter how ridiculous the odds. I am not entirely stupid and was not bereft of education while growing up

[Ydobon]

I've asked the questions more than once, OldPro. Apparently this lottery stuff is not really about money. "It's about the dream, K... it's fun to dream about what we'd do with all that money." And I keep thinking, how is it that you people can't dream without lottery tickets? And why can't you make a plan to accomplish some of that stuff with the money you do have? Perhaps the odds, minuscule as they are, somehow enable people who don't normally let their imaginations run wild to do so.

I dream just fine without lottery tickets, they're just a dream within a dream, lottery Inception

[cmonkey]

I really think lottery buying is more about that tension/build up before hand and the sense of participation in something much larger than oneself. Oh the anticipation! You're doing it too! Just, just, just....I got 2 numbers this time! Argh!

I also suspect that (just like Wheel of Fortune) its somewhat rigged to allow these mega-jackpots to come around from time to time as a way of advertising. Its not that hard to do....

[Slevin]

My thoughts on the lotto:
Why not instead invest a little bit of money into penny stocks? Drastically better chances of your initial investment boosting you to the point of FI than the lottery , and anything past the FI point should be largely irrelevant.

[George the original one]

I really think lottery buying is more about that tension/build up before hand and the sense of participation in something much larger than oneself. Oh the anticipation! You're doing it too! Just, just, just....I got 2 numbers this time! Argh!

Yes, it's like horse races. If you're not involved in the race, they're boring to watch. Put money on a horse (or own a horse) and damn, it's happening!

[Ydobon]

Haha - I know someone who owns half of a horse, it's largely an excuse to get dressed up and socialise with fellow wealthy twits. He's never said which half he owns

[enigmaT120]

Me and my stupid math minor. No I don't buy tickets. The best way I can put it is that buying a ticket doesn't really change my odds of winning.

[JL13]

I bought one yeah. I usually buy when the expected value/cost of ticket > 1. Come one, it's like a 150% ROI right now, annualized that's like 2,600%!

Buying one ticket increases your odds by a nearly infinite amount. Buying the second ticket increases your odds an infinitisely small amount.

Having hundreds of millions of dollars would be fun. At least as fun as anything else you can buy for $2.

[OldPro]

Me and my stupid math minor. No I don't buy tickets. The best way I can put it is that buying a ticket doesn't really change my odds of winning.

Now that is a way of putting it that most people can understand enigma.

[Tyler9000]

It's certainly tempting. But weirdly, now that I'm already FIRE and money isn't a worry part of me fully believes that winning that much money would actually make my life worse. There's a lot of pain, danger, and responsibility that comes with winning a billion dollars and dealing with the inevitable spotlight.

I've already purchased my lottery ticket out. I had to wait in line for 15 years, but the odds were way more in my favor.

[GandK]

But weirdly, now that I'm already FIRE and money isn't a worry part of me fully believes that winning that much money would actually make my life worse. There's a lot of pain, danger, and responsibility that comes with winning a billion dollars and dealing with the inevitable spotlight.

I've thought about this so many times. Past a certain point, money seems to cause more problems than it solves. Even if you are well-educated and sane, the people around your money cause problems. For most, it would have to be a secret that you have a lot of money to prevent that... which also, for most, seems to remove the allure of having the money.

[Dragline]

If I suggested you pick the numbers, 1, 2, 3, 4, 5, 6 for your lottery ticket, would you think those were as good a choice as any for your ticket? If not, why not? All the numbers have exactly the same chance of coming up after all.

So here is my question for all our mathematically inclined posters here. How would you describe the chances of winning the lotter to someone in a way they can comprehend? Telling them the odds are 292 million to 1 is pointless, you have to put it in a way they will understand.

Tell them that they are about 1800 times more likely to be killed by a lightning strike than they are of winning that lottery.

As for the numbers, the better play is to pick the higher numbers and at random, because they don't correspond to the birthdays and other things that are commonly used to pick numbers. And its likely that many people pick their numbers in some kind of sequence. You want to decrease the chances of having to share the prize if you actually won.

[George the original one]

The concept of "pot odds" suggests that buying all the lottery numbers to win the current jackpot would be worthwhile (about 2:1 in your favor), though you'd be ignoring the chance of having to split the winnings with other players.

That method has been used successfully to "buy" state lotteries, but it is unlikely to succeed in Powerball because it doesn't scale well.

[7Wannabe5]

I wish every decision in life was as easy to make as not buying a lottery ticket.

[jacob]

https://en.wikipedia.org/wiki/Prospect_theory

Enjoy!

(Notice how the utility function---rather than a straight line which would result from logic and rational expectations---is almost like a Heaviside function. This means three things. First, it doesn't take much ($2) for people to commit. Second, once people are committed, they're equally committed regardless of what the potential reward is, a million dollars, a billion? Third, a lot of people aren't rational or logical or empathic or introspective or whatever the issue is. They're people! Fun stuff: There's a sufficient concentration of numerical illiteracy to spread memes such as this: http://www.snopes.com/powerball-wealth-sharing-meme/)

[IlliniDave]

I didn't, but if my state was a participant I would have because it would be fun--not everyday you get a chance to be in a raffle for a chance at over $1B. I'd book the expense as an entertainment. As fun as wasting 20-25 bucks to go out for a drink and a movie, plus you just might wind up with $570M net or whatever in your pocket.

[enigmaT120]

Jacob, it's all those dang zeros. I did the calculation myself and even I messed up the first time, ending up with over 40 dollars per person.