Powerball Jackpot

I understand math so I'm not playing, but it's really funny to think about. I don't quite get the motivation that gets exponentially more people to buy when the jackpot gets above $400 million, or in this case, $1 billion. I know playing the lottery in any condition is economically irrational, but this extra bit of irrationality is really weird. Economic theory proves in most cases that marginal utility decreases as a payout increases. Yet the reverse seems to happen here. What I mean is, how is $1.3 billion than much more of a motivator than say $200 million? Especially when the investment is still just $2. So many people who couldn't be bothered to try to win $200 million, are all over it now that it's over $1 billion... but what's the difference? When I picture living with the $1.3 billion I imagine having all the things you'd normally think of buying with a lottery win, plus owning a private jet, fully staffed, constantly on call and fueled up. I think that cost, plus the associated opulence I'd be indulging in everywhere I went, would be the most efficient way to blow threw tons of cash. But I think I could still do that with the puny $200 million too, right? Add in the fact that some people express concerns that it's actually "too much" money, and the even greater watering down of your chances due to the media blitz, and it just seems even crazier.
 
I don't quite get the motivation that gets exponentially more people to buy when the jackpot gets above $400 million

The motivation is social. I'm a math person, too, but I thoroughly enjoy being part of the conversation. I pay my buck or two so I can truthfully answer people when they ask "What would you do if you won?"

Besides, isn't there a real theory that anticipation of a good thing is often as psychologically positive as the thing itself? It's a nice, cheap dream.
 
I understand math so I'm not playing, but it's really funny to think about. I don't quite get the motivation that gets exponentially more people to buy when the jackpot gets above $400 million, or in this case, $1 billion. I know playing the lottery in any condition is economically irrational, but this extra bit of irrationality is really weird. Economic theory proves in most cases that marginal utility decreases as a payout increases. Yet the reverse seems to happen here. What I mean is, how is $1.3 billion than much more of a motivator than say $200 million? Especially when the investment is still just $2. So many people who couldn't be bothered to try to win $200 million, are all over it now that it's over $1 billion... but what's the difference? When I picture living with the $1.3 billion I imagine having all the things you'd normally think of buying with a lottery win, plus owning a private jet, fully staffed, constantly on call and fueled up. I think that cost, plus the associated opulence I'd be indulging in everywhere I went, would be the most efficient way to blow threw tons of cash. But I think I could still do that with the puny $200 million too, right? Add in the fact that some people express concerns that it's actually "too much" money, and the even greater watering down of your chances due to the media blitz, and it just seems even crazier.

What you say makes sense, to a degree. There was an ad campaign in GA a few years ago where a husband comes home looking depressed. He then tells his wife they won the lottery. Totally surprised, she looks at him and says "But it was only 8 million. How are we supposed to live on 8 million??" I thought it was genius.

As for motivation, we live in one of the few states that doesn't have a lottery, so the unusual amounts (above 300 million, for example) are a motivation to take a drive, just for the fun of it.
 
What you say makes sense, to a degree. There was an ad campaign in GA a few years ago where a husband comes home looking depressed. He then tells his wife they won the lottery. Totally surprised, she looks at him and says "But it was only 8 million. How are we supposed to live on 8 million??" I thought it was genius.

As for motivation, we live in one of the few states that doesn't have a lottery, so the unusual amounts (above 300 million, for example) are a motivation to take a drive, just for the fun of it.
Oh wow I had no idea there were states with no lottery!
 

Eh. 200 million "cash value" is something like $110 million, less taxes, call it $55 million. That would be enough for me to live VERY comfortably on the rest of my life, but not a game changer. You could NOT have a private jet for that kind of money, for example. Sure, I'd drive a nicer car (Tesla would be in my future for sure) and my kids could literally go anywhere for college (assuming they got in), and that would be nice. But, fundamentally, I'd be living my same life.

800 million? More than a billion? Fundamentally a game changer. So much money you could live like a king on the interest alone (which is what I would do). I could buy ANY home I wanted, regardless of price tag. With $55 million, you really couldn't go "whole hog" without tapping out your cash. (There are some really, really nice homes that cost $30 million....LOL).

Now, would I do all that? Probably not. I'd set up trust funds for the kids, donate to select charities, and save the rest. We would live on the beach somewhere, because life's too short not to, but I would NOT have private jet, be dripping in jewels, etc. That just isn't me.

But, to answer the question, I buy $2 ticket for the dream. It's hard to "have the dream" if you haven't entered, at least feeling like it's real. I certainly don't spent money I can't afford to lose....as long as you do that, no harm, no foul.
 
Wow. $55 mil would certainly be game changing for me, and for pretty much everyone I know.
 
I played our National Lottery *once* and won £65... never played again. Figured my luck had run out!
 
/
I understand math so I'm not playing, but it's really funny to think about. I don't quite get the motivation that gets exponentially more people to buy when the jackpot gets above $400 million, or in this case, $1 billion. I know playing the lottery in any condition is economically irrational, but this extra bit of irrationality is really weird. Economic theory proves in most cases that marginal utility decreases as a payout increases. Yet the reverse seems to happen here. What I mean is, how is $1.3 billion than much more of a motivator than say $200 million? Especially when the investment is still just $2. So many people who couldn't be bothered to try to win $200 million, are all over it now that it's over $1 billion... but what's the difference? When I picture living with the $1.3 billion I imagine having all the things you'd normally think of buying with a lottery win, plus owning a private jet, fully staffed, constantly on call and fueled up. I think that cost, plus the associated opulence I'd be indulging in everywhere I went, would be the most efficient way to blow threw tons of cash. But I think I could still do that with the puny $200 million too, right? Add in the fact that some people express concerns that it's actually "too much" money, and the even greater watering down of your chances due to the media blitz, and it just seems even crazier.

That's pretty rude and arrogant. I think most of us who buy a ticket understand math.
 
That's pretty rude and arrogant. I think most of us who buy a ticket understand math.
I don't get that it's rude and arrogant, what I think he's trying to say is why do so many more people either buy more tickets or more people play when the jackpot is 1 billion compared to 200 million. I know there are people out there when it's 200 million buying maybe 10 tickets but when it's at 1 billion, those same people are buying 100 tickets because they think their chances are higher.
 
I don't get that it's rude and arrogant, what I think he's trying to say is why do so many more people either buy more tickets or more people play when the jackpot is 1 billion compared to 200 million. I know there are people out there when it's 200 million buying maybe 10 tickets but when it's at 1 billion, those same people are buying 100 tickets because they think their chances are higher.

No, we know the chances are not higher.

However it is 1.4 BILLION....We are relying on luck of the place selling a winner, lol. I am not buying 100 tickets but I am buying more than one at different places.
 
why do so many more people either buy more tickets or more people play when the jackpot is 1 billion compared to 200 million
The biggest factor, in my mind, is that it is on and in the news every hour, every day. Many people who never pay attention to the lottery, like us, are momentarily aware that there is a lottery and a big prize, albeit almost zero chance of winning. That, coupled with the low entry cost, $2, brings more people in, which was the idea the lottery was hoping for when they changed the playing odds some months back.
 
We all know there is a better chance of us getting struck by lightning multiple times than winning the lotto but it is fun to think about.

All the lotto hoopla inspired me to rewatch that episode of Roseanne when they win the lotto. They won $108 million and all I can think is "$108 million? That's chump change." Lol.

But seriously, if you did win the lotto what would you do first?

DH said the first thing he would do is consult a financial planner which we would do forthwith but he did agree to bring a bottle of champagne home from work and said we could go out to dinner before we consult the financial advisor.

I do know I would like to donate a lot to charity. Sizeable donations to things like cancer research, ASD research, MS research, and a couple other charities to be named later.

I don't think I would want to buy a mansion. A nice, sizeable home yes, but not a mansion. Too much upkeep.

I would buy a new car though as I would find 4 wheel drive useful in the winter here.

How about you? What would you do first?
 
The biggest factor, in my mind, is that it is on and in the news every hour, every day. Many people who never pay attention to the lottery, like us, are momentarily aware that there is a lottery and a big prize, albeit almost zero chance of winning. That, coupled with the low entry cost, $2, brings more people in, which was the idea the lottery was hoping for when they changed the playing odds some months back.
Actually you're right. My DW is going to buy a couple of tickets for the powerball and we hardly ever play. LOL
 
We all know there is a better chance of us getting struck by lightning multiple times than winning the lotto but it is fun to think about
Really, your chance of getting hit by a asteroid is better, so I'm buying a ticket, LOL
 
yeah, the daydreaming is fun. Where to live? How to hide? I'd rather win less, too, but I still bought tickets.

The first thing I'd do is sign the darn thing, take a photo with my phone, and then take it the safe deposit box. DH never contributes to the ticket buying so I told him I'm not sharing. :smooth: Community property state be darned.

I'm one of those people that buys a couple of tickets even when the pot is a pittance like $15M.
 
I understand math so I'm not playing, but it's really funny to think about. I don't quite get the motivation that gets exponentially more people to buy when the jackpot gets above $400 million, or in this case, $1 billion. I know playing the lottery in any condition is economically irrational, but this extra bit of irrationality is really weird. Economic theory proves in most cases that marginal utility decreases as a payout increases. Yet the reverse seems to happen here. What I mean is, how is $1.3 billion than much more of a motivator than say $200 million? Especially when the investment is still just $2. So many people who couldn't be bothered to try to win $200 million, are all over it now that it's over $1 billion... but what's the difference? When I picture living with the $1.3 billion I imagine having all the things you'd normally think of buying with a lottery win, plus owning a private jet, fully staffed, constantly on call and fueled up. I think that cost, plus the associated opulence I'd be indulging in everywhere I went, would be the most efficient way to blow threw tons of cash. But I think I could still do that with the puny $200 million too, right? Add in the fact that some people express concerns that it's actually "too much" money, and the even greater watering down of your chances due to the media blitz, and it just seems even crazier.

That's pretty rude and arrogant. I think most of us who buy a ticket understand math.

ITA!!

Because it is fun! It;s a game and as long as you don't blow the mortgage why not? People spend money on frivolous things all the time.

Oh and at some point person(s) are gonna win - why not me or her or him or..............
 
I was going by the source quoted in the articles attached. I have no idea if they are right or wrong, but it's a credible news channel... I might be mixing up different taxes though ::yes::.

View attachment 144684

They're wrong about that. The standard federal withholding for large lottery winnings is 25%. However, lottery winnings are still taxed as ordinary income. Unless someone donates a ton or otherwise can deduct enough of that income, there will almost always be additional taxes due. However, I'm thinking there won't likely be a penalty for inadequate withholding such as with employment income.

Wait... what? So is it 25% or based on the tax bracket (ordinary income)? is 25% the floor?

I believe it's taxed twice - prior/upon your receipt of it (always 25%) and then taxed as income.

Federal withholding for lottery winnings is a flat 25% for any prize over $5000. However, taxable income is another matter. It could be possible to give away so much in tax deductible donations (although there is a ceiling) that a refund could be forthcoming.

The point is that the withholding isn't the end of the tax liability. The winner will still be subject to taxes, but the withholding has already given a huge chunk to the Treasury.

Again 25% is the standard federal withholding. It's 28% if a SSN isn't provided. Taxes are due on the total income. I've noted that if enough donations are made, it might be possible to get a refund.

Nobody here has ever had income withheld? You know, an upfront payment in anticipation of taxes being due. Where there's a possibility of a refund or a balance due.

Just to clarify, imagine getting a lump sum of $400,000,000. 25% ($100,000,000) is taken right away by the Feds. If that's the only income for the year, it's going to be taxed at a top marginal rate of 39.6%.

If you ignore exemptions or deductions (which may be tiny in comparison) and marginal rates (I don't have the time to figure that out), the tax liability is less than $158,400,000. So they've already taken $100,000,000, so the balance due will be less than $58,400,000.

In some states, lottery winnings (if the tickets were purchased in state) aren't subject to state taxes. California tax forms include modifications from federal amounts for lottery winnings. Bro it would be possible to owe over a hundred million in federal taxes and zero in state taxes.


My head hurts now....:tongue:


If any of us/you win, consult a tax professional (amongst others) and they will make sure all is well in the land of taxes.
 

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