Given that buying a ton of lottery tickets is, when considered on a purely logical level, a pretty poor way to invest your money…it really isn’t a surprise that the demographic which tends to play the lottery also tends to have serious problems managing the money logically when they do win.
I’m not saying EVERYONE who plays the lottery is a poor investor or gullible or anything…I’m just saying that we have to remember that the kind of person who is barely scraping by but yet wastes his/her whole paycheck on lotto tickets is not going to become any smarter if they do somehow manage to win big.
Very true. Lotteries are poor taxes. As well as taxes on people who are bad at math…
I am not wealthy. I make a decent living, though. I’d like to think that I wouldn’t piss away a big lottery windfall, but I’m not at all certain, and here’s why:
I did some work at a local gaming store, getting them set up with a website and database management. They paid me in store credit, which was fine. I normally spent around $50-100 a month there. After three months of work, I had amassed some $2500 of credit. I was happy, figuring I could support my gaming habit for free for a two or three years.
The credit was gone in three months. I have no idea what the hell I bought. And it scared me to death that I could piss it away on games I never even played.
So yes, I can easily understand how this can happen. And I think unless you’ve actually been in their shoes, you can’t be objective about how you’d react.
I have an uncle who was spectacularly immature for his age and wont to binges of irresponsiblity. He had an on the job injury that ended his ability for physical labor. He was given a hefty settlement, enough for him to live out his days without working – something he’s good at anyway. Some family members are upset that he hasn’t shared his wealth with everyone. He did buy his mother a nice house, himself a remote compound and paid back a few family debts. But otherwise he’s actually managed to mature a little and has it invested well enough it will actually last.
It’s a total shock to me.
Wonder is these poor people are poor because of injustice or should we hold them a little more personally accountable.
Can we please do away with the goddamn stupid-ass meme that the lottery is a tax on poor people/people who are bad at math?
Listen up, meme-perpetuators:
The lottery is entertainment; gambling is entertainment. It is NOT an investment of any kind. Even the most brain-dead-buys-$50-worth-of-tickets-on-a-$200-a-week-salary mouth breather knows that. So why can’t seemingly intelligent people get that? Is that tiny little crumb of moral superiority worth the braying of that falsehood over and over again? Hell, buying flowers is just a tax on people who are bad at math, by that standard.
Okay, I can kind of understand some forms of gambling as entertainment. People like to play cards and such so the money just adds to the thrill. But lottery? I’ve seen people who drop $50 on those instant win type games. They walk from the counter to the garbage can, peel open the various tabs, and drop the losing tickets into the garbage one after another. Two minutes later all their tickets are in the garbage and they leave the store. If that is entertainment, it is not much value for the money. At least with cards you get to sit at a table for a while and play a game.
Sorry Arky, I guess we don’t agree on the lottery. I stand by my post, however- I’m pretty sure that lots of people subscribe to the bullshit about “Somebody has to win!”
I am also pretty sure that I’m not a braying, goddamn stupid-ass, but then again, maybe I am.
:dubious:
There seems to be two ways people think about their money.
People like some friends I’ve had over the years. They’re used to living paycheck to paycheck. They get used to spending whatever they have. When they get a pay raise, that means they can spend more each month. Get another job, a much nicer salary, that means they can spend even more each month. They go from small apartment, crappy car to small house, nicer car. Then larger house. Two cars Then even larger house, really nice cars. Eventually, with lots of work, they’re making six figures, living very expensively and pretty much spending whatever they’re making each month. They will sock a little away in a retirement plan, and they do have the money they’ve more or less invested in the house, but that’s about it.
Then there’s me. I get a pay raise, I’m not thinking, “oh good! I can afford more stuff each month.” I’m thinking, “good! I can sock away more money each month.”
I think people who automatically find ways to spend all their money each month, are going to find ways to spend 10 million dollars.
There are also people like my mom whose philosophy was “you can’t take it with you.” Whenever she got her hands on extra money, she immediately spent it on us kids. When she died, she literally died penniless. I’m certain she’d have immediately spent a lotto winning on us (although she never wasted her money on lotto tickets). We’d have had lots of fun for a few years, then it’d be gone.
I know it’s impossible to say for sure what you’d do until you’re given the chance ::crosses fingers:: but I’m pretty darn certain I’d live within whatever means I had based on the interest I was earning each month. I’d be as generous to my friends & relatives as I could, but based solely on that monthly budget.
What I think would be neat, is to set up some sort of trust fund type deal for people. I wouldn’t go out and buy them something “nice.” Rather, I’d set it up so they get the interest off a certain amount, to raise their monthly income by, for instance, $200/month. Then let them decide what to do with that little bit extra each month. Fart it away each month, or save it for something nice. Your choice.
Oh, sure, no doubt that there is practically no value (to me) in the scenario you describe. There are people who enjoy a beer or two, and there are people who chug a whole six pack in the parking lot outside the beer store. Certainly entertainment value can vary very widely. It can most certainly be said that some people waste their money on low-entertainment-yield pursuits. But it ain’t an investment.
I believe that historically people have always wasted windfalls. Most of the people who found gold during the '49 rush pissed it away on whiskey and women (or whatever), and limped back home broke. It was like that at Comstock and in the Black Hills and the Yukon. Exceptions do exist-- the very well invested and managed proceeds from a '49 strike has kept a friend’s family comfortable for going on 5 generations. But that’s very rare, most of the people who made money from a mineral strike are the people who set up shop to sell the pick-axes and pans-- the kind of people who likely would never go looking for shiny rocks in the first place.
I’m not a fan of the 'Lottery is a tax on people who are bad at math" either. Though I’d buy into the less-pithy “In addition to being a source of gambling amusement, the lottery is a horrible pitfall for people with gambling compulsions.”
At a certain dollar amount, and I have not calculated this since the game was changed recently, the rate of return on a dollar spent on the powerball jackpot is on average greater than one dollar. It isn’t a great investment by any means, but it holds up mathematically.
If this is the case, and I must profess doubt, then where does the extra money come from? Are they in fact running the lottery at a loss?
Well, if the odds of winning the jacpot at 1 in 80 million (for example), and the jackpot is over 80 mil, then you have a positive expectation on a purchase of a ticket.
The extra money comes from the people who bought losing tickets in the weeks preceding the built up jackpot.
Still not saying it’s a smart investment, but it’s at least defensible from a statistical standpoint, and disproves the “tax on those bad at math” fallacy.
The problem is that they are dead. It’s one thing to harsh on the idiots that walk around with hundreds of thousands of dollars and get mugged frequently. These people are dead.
I wonder how long she lay dead in her bed?
If you would make fun of dead people after the lottery, then you wouldn’t be making me proud.
I think that a lottery winner either figures out what to do with their money fast or they piss it away spectacularly. If I won $30 million in a lottery I’d hire a financial advisor immediately. Many, many people wouldn’t even know enough to do that.
For example, a relative I have is famously bad with money. At the time of her mother’s death, she was on welfare and working many hours at a low-wage job, supporting herself and her four children. Upon receiving her inheritance (not lottery jackpot-sized but big enough) she proceeded to buy a used Jeep at way above blue book, and spent the rest of the money on crap so fast that she was unable to keep up payments on the Jeep and it was repossessed. In other words, after about a year it was as if she had inherited nothing at all. She could have used that money in so many other positive ways. But she is just dumb about money, and wasn’t going to take anyone’s advice about it either. What can you do?
It is fascinating to read about how these people go down, but I find it hard to feel very sorry for them.
One- Where are you getting the “investment” angle? It is incomprehensible to me that anyone would consider buying lottery an investment.
Two- if the odds are 1 in 80 million, and I spend a dollar, the odds are astromically against me having anything after the draw except a worthless piece of paper. While you might have an “expectation” of a positive (that is, winning) result, it’s a pretty lame expectation.
How can it be “good math” to think that a 1 in 80 million chance is a sound bet?
And I do know a bit about this- I have inherited substantial sums several times, and not blown any of them. YMMV, obviously.
there’s a reason it’s called gambling… (as i clutch my Kong tickets because I haven’t checked the numbers yet)
JSexton has it.
Soem of the money from each week’s losers goes to increase the jackpot, some goes to fund state programs. Eventually, someone wins the jackpot, and the states keep whatever they’ve tucked to the side, minus the seed money for the next round.