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(NJ.com)   Be thankful for what you have. Oh yeah, and the Powerball jackpot is up to $325 million   (nj.com) divider line 57
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2595 clicks; posted to Main » on 22 Nov 2012 at 2:26 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-11-22 01:28:33 PM
I wonder how many choose the lump sum over the incrimental payouts...and where the rest of the money goes if they choose the lump sum. Is there some central lottery place where they have wild parties 24/7 with hookers and blow?


ok that's my stupid random thought for the day.
 
2012-11-22 01:48:30 PM
Not this shiate again
 
2012-11-22 01:49:59 PM
I'm thankful I have a Powerball ticket.
 
2012-11-22 02:23:59 PM

gopher321: I wonder how many choose the lump sum over the incrimental payouts...and where the rest of the money goes if they choose the lump sum. Is there some central lottery place where they have wild parties 24/7 with hookers and blow?


ok that's my stupid random thought for the day.


If you invest the lump sum wisely, you'll probably end up with substantially more in 20 years than you would have gotten by choosing the yearly payout. The lottery commission would invest the money very, very conservatively.

Of course, you also have the opportunity to blow it in an epic hookers-and-blow party that would leave you broke...but very happy.
 
2012-11-22 02:29:54 PM
That's a lot of hookers & blow.
 
2012-11-22 02:32:31 PM
In the spirit of the holidays, you know, sharing and all, I promise not to be pissed if I have to split the jackpot with one other winner.
 
2012-11-22 02:32:34 PM
Isn't the odds of winning something like one chance in 175,223,510? Wouldn't that make it able to be a theoretical 'good bet' at $1 per ticket?

I'd totally buy a ticket if it had positive expected value.
 
2012-11-22 02:34:53 PM
I'd kind of like to win that.
 
2012-11-22 02:35:54 PM
Bought one when getting gas today. Played the lucky numbers on the random fortune cookie slip in my wallet. Random is random.

/in bed
 
2012-11-22 02:41:21 PM
Lump sum payout = $165 million. Minus $57 million to the feds = $108 million. Paying off the mortgage on your house plus the mortgage on the two kids and paying off everyone's credit card and student loan and car payments can be done for under $1 million. Give $5 million apiece to the two kids. Establish college trust fund for the three grandchildren for $3 million. That would bring it down to $99 million. Invest $95 million in rock solid, non-taxable, interest bearing devices (think munis here) which pay 2.5% interest. This would leave you with $4 million for spending money the first year and if you limited your annual expenses to $2.375 million per year, you'd leave an estate worth $95 million when the wife and husband die.
 
2012-11-22 02:43:42 PM

Prey4reign: Lump sum payout = $165 million. Minus $57 million to the feds = $108 million. Paying off the mortgage on your house plus the mortgage on the two kids and paying off everyone's credit card and student loan and car payments can be done for under $1 million. Give $5 million apiece to the two kids. Establish college trust fund for the three grandchildren for $3 million. That would bring it down to $99 million. Invest $95 million in rock solid, non-taxable, interest bearing devices (think munis here) which pay 2.5% interest. This would leave you with $4 million for spending money the first year and if you limited your annual expenses to $2.375 million per year, you'd leave an estate worth $95 million when the wife and husband die.


Your math is good, but underestimated. The lump sum payout is currently estimated at $212.8m
 
2012-11-22 02:44:09 PM

adenosine: Isn't the odds of winning something like one chance in 175,223,510? Wouldn't that make it able to be a theoretical 'good bet' at $1 per ticket?

I'd totally buy a ticket if it had positive expected value.


Powerball is $2 a ticket :(
 
2012-11-22 02:45:13 PM

Prey4reign: Lump sum payout = $165 million. Minus $57 million to the feds = $108 million. Paying off the mortgage on your house plus the mortgage on the two kids and paying off everyone's credit card and student loan and car payments can be done for under $1 million. Give $5 million apiece to the two kids. Establish college trust fund for the three grandchildren for $3 million. That would bring it down to $99 million. Invest $95 million in rock solid, non-taxable, interest bearing devices (think munis here) which pay 2.5% interest. This would leave you with $4 million for spending money the first year and if you limited your annual expenses to $2.375 million per year, you'd leave an estate worth $95 million when the wife and husband die.


That's good! Now, how do I select the right numbers?
 
2012-11-22 02:52:04 PM

Billy Bathsalt: Prey4reign: Lump sum payout = $165 million. Minus $57 million to the feds = $108 million. Paying off the mortgage on your house plus the mortgage on the two kids and paying off everyone's credit card and student loan and car payments can be done for under $1 million. Give $5 million apiece to the two kids. Establish college trust fund for the three grandchildren for $3 million. That would bring it down to $99 million. Invest $95 million in rock solid, non-taxable, interest bearing devices (think munis here) which pay 2.5% interest. This would leave you with $4 million for spending money the first year and if you limited your annual expenses to $2.375 million per year, you'd leave an estate worth $95 million when the wife and husband die.

That's good! Now, how do I select the right numbers?


That, unfortunately, is a small matter left for you to figure out.
 
2012-11-22 02:57:05 PM

SultanofSchwing: adenosine: Isn't the odds of winning something like one chance in 175,223,510? Wouldn't that make it able to be a theoretical 'good bet' at $1 per ticket?

I'd totally buy a ticket if it had positive expected value.

Powerball is $2 a ticket :(


Oh, well, fark it then.
 
2012-11-22 02:59:55 PM
After working a corporate bullshiat job for 5 years now and going from 25k to 27k a year I have to tell you that despite knowing that I'm just throwing away my money, I'm still willing to play the lottery just for the hope, the dream of telling them all to go fark themselves and then leaving to sip drinks with pretty tan girls on an island somewhere.

Oh well, a man dream though, a man can dream.
 
2012-11-22 03:13:43 PM
The lottery is essentially a tax on those that don't understand Probability and Statistics. No wonder the schools don't offer it as a course anymore - they need future lottery suckers customers!

OK by me..the government would be getting it from more taxes otherwise.
 
2012-11-22 03:14:31 PM
Spoiler alert: you're still not going to win the jackpot.
 
2012-11-22 03:17:02 PM

Prey4reign: Lump sum payout = $165 million. Minus $57 million to the feds = $108 million. Paying off the mortgage on your house plus the mortgage on the two kids and paying off everyone's credit card and student loan and car payments can be done for under $1 million. Give $5 million apiece to the two kids. Establish college trust fund for the three grandchildren for $3 million. That would bring it down to $99 million. Invest $95 million in rock solid, non-taxable, interest bearing devices (think munis here) which pay 2.5% interest. This would leave you with $4 million for spending money the first year and if you limited your annual expenses to $2.375 million per year, you'd leave an estate worth $95 million when the wife and husband die.


I'd have to add in a few million to launch my campaign for Mayor of Toronto. The current one is a schmuck.
 
2012-11-22 03:20:45 PM

rcf1105: Spoiler alert: you're still not going to win the jackpot.


I've got a system. It's rooted in math.

/Solid retirement planning on my part.
 
2012-11-22 03:23:45 PM

SultanofSchwing: adenosine: Isn't the odds of winning something like one chance in 175,223,510? Wouldn't that make it able to be a theoretical 'good bet' at $1 per ticket?

I'd totally buy a ticket if it had positive expected value.

Powerball is $2 a ticket :(


With the help of http://www.durangobill.com/PowerballOdds.html I calculate the expected value of a ticket to 2.215 when you include all the prizes and assuming nobody else wins too.
 
2012-11-22 03:29:24 PM
If buying a ticket is straining your budget, you probably are just gonna blow it on meth or Four Loko anyway, so just go for it.
 
2012-11-22 03:29:56 PM

gopher321: I wonder how many choose the lump sum over the incrimental payouts...and where the rest of the money goes if they choose the lump sum. Is there some central lottery place where they have wild parties 24/7 with hookers and blow?


ok that's my stupid random thought for the day.


If you choose the lump sum, you get what the cash value is today. It means that you then get to invest the money however you see fit. If you choose the incremental payout, that's not as solid of an answer. Basically, as jake_lex stated, the lottery commission will hold onto the money, invest it in conservative investments and then the monthly payout is the interest of those investments. It's like me telling you that I'll give you $100, but instead, I put the $100 in a bank and give you the interest earned on that for the next 20-30 years. Sure, you'll get your $100, but it's more of a win for me because I also get to keep your $100.

With inflation, a dollar is worth more today than it will be tomorrow, so unless there's some extenuating circumstance, you're better off taking the lump sum and then hiring people to manage it for you so you don't blow it on hookers.
 
2012-11-22 03:31:11 PM

rcf1105: Spoiler alert: you're still not going to win the jackpot.


Spoiler alert: You aren't spoiling anything because people really do already know that, even the idiot ones that buy a lottery every day, they know it just like you do, but they continue to hope that they might, and when you are desperately poor, sometimes the hope is worth more than the $2 a day. But hey thanks for the mathematically correct but emotionally antagonistic reminder.
 
2012-11-22 03:45:54 PM

UseLessHuman: After working a corporate bullshiat job for 5 years now and going from 25k to 27k a year I have to tell you that despite knowing that I'm just throwing away my money, I'm still willing to play the lottery just for the hope, the dream of telling them all to go fark themselves and then leaving to sip drinks with pretty tan girls on an island somewhere.

Oh well, a man dream though, a man can dream.



and I said no salt, NO salt for the margarita, but it had salt on it, big grains of salt
 
2012-11-22 03:46:08 PM
Things I fear coming back in my next life as:

1. A lottery player
2. A theist
3. A snowboarder
4. A dog owner
5. A pickup truck driver
6. An ideologue of any kind
 
2012-11-22 03:51:59 PM

Sageth: gopher321: I wonder how many choose the lump sum over the incrimental payouts...and where the rest of the money goes if they choose the lump sum. Is there some central lottery place where they have wild parties 24/7 with hookers and blow?


ok that's my stupid random thought for the day.

If you choose the lump sum, you get what the cash value is today. It means that you then get to invest the money however you see fit. If you choose the incremental payout, that's not as solid of an answer. Basically, as jake_lex stated, the lottery commission will hold onto the money, invest it in conservative investments and then the monthly payout is the interest of those investments. It's like me telling you that I'll give you $100, but instead, I put the $100 in a bank and give you the interest earned on that for the next 20-30 years. Sure, you'll get your $100, but it's more of a win for me because I also get to keep your $100.

With inflation, a dollar is worth more today than it will be tomorrow, so unless there's some extenuating circumstance, you're better off taking the lump sum and then hiring people to manage it for you so you don't blow it on hookers.


That's not really it either. The lump sum is the first year's payout plus the amount that has to be invested to make the payouts for the remaining 29 years. The lottery doesn't get to keep any more or less of the proceeds.

I think.
 
2012-11-22 03:53:12 PM

Sageth: gopher321: I wonder how many choose the lump sum over the incrimental payouts...and where the rest of the money goes if they choose the lump sum. Is there some central lottery place where they have wild parties 24/7 with hookers and blow?


ok that's my stupid random thought for the day.

If you choose the lump sum, you get what the cash value is today. It means that you then get to invest the money however you see fit. If you choose the incremental payout, that's not as solid of an answer. Basically, as jake_lex stated, the lottery commission will hold onto the money, invest it in conservative investments and then the monthly payout is the interest of those investments. It's like me telling you that I'll give you $100, but instead, I put the $100 in a bank and give you the interest earned on that for the next 20-30 years. Sure, you'll get your $100, but it's more of a win for me because I also get to keep your $100.


Er, no. The lottery commission buys an annuity contract that pays you the present value plus a guaranteed interest rate spread out over 30 years. The seller of the annuity invests the money and keeps any profits over your guaranteed payments. There's a possibility that the seller may lose money, but that's why the guaranteed rate is lower than a good investor might earn on his own.

IIRC, the current ROI on the annuity option is around 4-5%.

One should also consider that the tax hit on the lump sum is bigger than the sum of taxes over the life of the annuity, assuming tax rates don't increase in the future. But that's not a good assumption these days. Most financial planners will tell you to take the lump sum.
 
2012-11-22 03:56:36 PM

UseLessHuman: rcf1105: Spoiler alert: you're still not going to win the jackpot.

Spoiler alert: You aren't spoiling anything because people really do already know that, even the idiot ones that buy a lottery every day, they know it just like you do, but they continue to hope that they might, and when you are desperately poor, sometimes the hope is worth more than the $2 a day. But hey thanks for the mathematically correct but emotionally antagonistic reminder.


Lottery tickets are entertainment, not investments. I've never won a free movie ticket at the theater. Go for it.
 
2012-11-22 04:00:28 PM

Abox: Things I fear coming back in my next life as:

1. A lottery player
2. A theist
3. A snowboarder
4. A dog owner
5. A pickup truck driver
6. An ideologue of any kind


are you Adick in Abox?
 
2012-11-22 04:19:58 PM
You're better off winning a lottery in Canada. They don't tax it here.
 
2012-11-22 04:24:26 PM

KrispyKritter: Abox: Things I fear coming back in my next life as:

1. A lottery player
2. A theist
3. A snowboarder
4. A dog owner
5. A pickup truck driver
6. An ideologue of any kind

are you Adick in Abox?



LOL...what'd I get you on?
 
2012-11-22 04:27:59 PM
Yeah, Be thankful for what you have.

Don't ever once give yourself credit for the hard work you did to get yourself where you are. Wallow in the guilt.

That's what God wants.

YOU DIDN'T BUILD THAT.
 
2012-11-22 04:37:39 PM
I did not win last night's jackpot, so you're welcome for that.
 
2012-11-22 04:38:28 PM

BarkingUnicorn: Sageth: gopher321: I wonder how many choose the lump sum over the incrimental payouts...and where the rest of the money goes if they choose the lump sum. Is there some central lottery place where they have wild parties 24/7 with hookers and blow?


ok that's my stupid random thought for the day.

If you choose the lump sum, you get what the cash value is today. It means that you then get to invest the money however you see fit. If you choose the incremental payout, that's not as solid of an answer. Basically, as jake_lex stated, the lottery commission will hold onto the money, invest it in conservative investments and then the monthly payout is the interest of those investments. It's like me telling you that I'll give you $100, but instead, I put the $100 in a bank and give you the interest earned on that for the next 20-30 years. Sure, you'll get your $100, but it's more of a win for me because I also get to keep your $100.

Er, no. The lottery commission buys an annuity contract that pays you the present value plus a guaranteed interest rate spread out over 30 years. The seller of the annuity invests the money and keeps any profits over your guaranteed payments. There's a possibility that the seller may lose money, but that's why the guaranteed rate is lower than a good investor might earn on his own.

IIRC, the current ROI on the annuity option is around 4-5%.

One should also consider that the tax hit on the lump sum is bigger than the sum of taxes over the life of the annuity, assuming tax rates don't increase in the future. But that's not a good assumption these days.
Most financial planners will tell you to take the lump sum.


because your winnings can't be inherited either . Grab that cash with both hands and make a stash
 
2012-11-22 04:42:36 PM
on the lump sum vs annuity --

the way things are going those millions upon millions of dollars 30 years from now won't be worth near as much as they are now.

Lump sum all the way -- pay your lump to uncle sugar so Sha-Na-Na can afford smokes and fomula and be on your way.

I could live happily for the rest of my life given a lump sump of 5 to 7 million dollars. Assuming 100k/year in interest. I'm only 30 and I could make it work for another 60 years if I need to :)
 
2012-11-22 04:46:43 PM
I would start my own friggin mega-church. THAT'S and investment with great returns, and tax exemptions too.



/wrings hands, yesss
//also, hookers and blow
 
2012-11-22 04:59:42 PM

Marcintosh:

because your winnings can't be inherited either . Grab that cash with both hands and make a stash


Er, no. The unpaid portion of an annuity becomes part of your estate and is passed on to your heirs. The lottery commission will, upon request, convert part of the annuity to a lump sum to help with the estate tax.
 
2012-11-22 06:04:22 PM
I enjoy telling people that their odds of purchasing a winning ticket are the same as finding a winning ticket.
"If you looked long enough, could you definitely find a discarded lottery ticket on the ground?"
"Uh, I guess so"
"And the odds of that being the winning ticket are 1 in x"
"Sure"
"Well, there you go"

/Probably something wrong with that.
//Still play the Lotto Max when it hits 50 mil.
 
2012-11-22 06:24:45 PM
From the PowerBall website:

A fixed percentage of every Mega Millions and Powerball ticket sold goes into its CASH jackpot. The cash jackpot is all the money that the lottery has on hand from the sale of tickets in the game. If a player chooses the cash option, then the lottery will pay the entire cash amount to the winner (less income tax withholding amounts required by federal and state laws).

The lottery also offers an ANNUITY jackpot option that can help reduce taxes and offers the winner a 100% guaranteed income stream over time. The two games offer different types of annual income streams, giving the players more options. If a winner elects the annuity option, then the lottery will invest the entire cash amount before taxes are deducted. The difference between the CASH jackpot and the ANNUITY jackpot is the interest earnings that build over time. The Powerball annuity jackpot earns more interest for two reasons.

1. The Powerball Annuity Jackpot invests more money for a longer period of time. The Powerball annuity is paid out in graduated amounts (rising by 4% per year to keep up with inflation) over 29 years (30 payments). The annual payments grow larger to keep pace with the winner's expected cost of living. The Mega Millions annuity is paid out over 25 years (26 payments) with equal payments each year. In both cases, the first payment is an immediate cash payment.

2. The Powerball Annuity Jackpot is invested in a wider variety of securities than the Mega Millions Jackpot, allowing more interest to be earned. All of the securities used to support both games' jackpots offer significant levels of U.S. Government backing. It is important to understand that the lottery is invested in these securities; not the winner. The winner has a contract with the states to pay the annual prize payment, no matter what happens to the securities.

Since the two games' jackpots are invested differently, if the CASH jackpots are the same, the Powerball jackpot will pay a larger ANNUITY over time than Mega Millions. If the ANNUITY value of the jackpots are the same, then Mega Millions' CASH jackpot will be larger than Powerball's CASH jackpot. The CASH jackpot amounts present the true present-day values of the jackpots. A winner who wishes to take the CASH jackpot should compare only the CASH jackpot amounts. The ANNUITY jackpot amounts will be important for those winners who plan to select a long-term, fully guaranteed income stream.
 
2012-11-22 06:47:29 PM
We play, it doesn't break us to spend a few bucks when the jackpot gets high. Read somewhere that the high jackpot makes it worth it statistically to play at least those times. Oh well to me it's worth it those times to throw a few bucks at a chance at having too much money.
 
2012-11-22 06:58:48 PM

BarkingUnicorn: Marcintosh:

because your winnings can't be inherited either . Grab that cash with both hands and make a stash

Er, no. The unpaid portion of an annuity becomes part of your estate and is passed on to your heirs. The lottery commission will, upon request, convert part of the annuity to a lump sum to help with the estate tax.


Be careful with that one. That is not true with all lotteries.
 
2012-11-22 07:10:14 PM

Axel_Gear: BarkingUnicorn: Marcintosh:

because your winnings can't be inherited either . Grab that cash with both hands and make a stash

Er, no. The unpaid portion of an annuity becomes part of your estate and is passed on to your heirs. The lottery commission will, upon request, convert part of the annuity to a lump sum to help with the estate tax.

Be careful with that one. That is not true with all lotteries.


Annnnd there you have it.
 
2012-11-22 07:30:50 PM
You pay to dream when you buy a lottery ticket. People that say it's a tax on the stupid may be right, but what do they spend money on that obviously fails. 2 dollars is less than a coffee these days! I gave up coffee 2 years ago because of High blood pressure so spending 2 dollars on a high lottery jackpot is a savings and unlikely possible outcome. At least I can dream about a better life that I can afford on a whim.
 
2012-11-22 07:48:06 PM

PreMortem: I would start my own friggin mega-church.


Really? Why? To get rich off the love gifts of the faithfull?
 
2012-11-22 08:27:21 PM
Its ok ill use a portion of my winnings to sponcer one of you. But first you must plead your case. Begin..
 
2012-11-22 08:33:21 PM

rosstifer: Its ok ill use a portion of my winnings to sponcer one of you. But first you must plead your case. Begin..


I know how to spell sponsor

/do I win?
 
2012-11-22 08:44:05 PM
Cash payment might work out on paper, but I've lived long enough to know everyone, no matter disciplined, goes through times in their lives when they go for broke. I could take the lump sum and invest - then 5 years from now have a life changing experience that loses it all. Who knows what it would be - but everyone has one. I'd rather give myself the choice to be a dumbass every once in a while and be able to start over with that next yearly payment, even if it means I wouldn't live to see the last of the payments. As far as leaving the rest to heirs - fark that, I love em too much to ruin their lives with money.
 
2012-11-22 09:02:48 PM

Bippal: Read somewhere that the high jackpot makes it worth it statistically to play at least those times.



You read wrong. Just adding to your normal routine the trip or detour to the store to buy a lottery ticket leaves you statistically more vulnerable to all sorts of grave misfortunes before you even begin to approach your chances of winning.
 
2012-11-22 09:23:46 PM

Abox: Bippal: Read somewhere that the high jackpot makes it worth it statistically to play at least those times.


You read wrong. Just adding to your normal routine the trip or detour to the store to buy a lottery ticket leaves you statistically more vulnerable to all sorts of grave misfortunes before you even begin to approach your chances of winning.


Not if you're already headed to a location that sells tickets, eh? Like, I dunno - a gas station, grocery, etc.
 
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