Years ago I was standing in a queue with a friend who was buying a Lotto ticket because it was a huge jackpot. When we got to the front of the line he was saying to me, “I should have taken 1,2,3,4,5,6. I would be sure to get it all then.”
The newsagent chipped in and said, “No you wouldn’t. You would be surprised how many people do that.”
I have told the story to people since and usually they insist that hardly anyone would do it.
*This weekend’s biggest Powerball jackpot of $34 million has had punters forking over their cash in droves.
The majority are leaving their chances up to fate, but NZ Lotteries spokeswoman Karen Jones said about a third regularly chose their own numbers. Statistics showed choosing your numbers did not increase the likelihood of winning a big prize.
“People do some crazy things. We ran a search and found that about 2000 people pick the numbers 1, 2, 3, 4, 5, 6.”
Sharing the $34m jackpot with 2000 others would give each person about $17,000 – a nice bonus, but hardly a life-changing sum.*
Yep. You pay a tax on the purchase of the lottery ticket, so the winnings are tax-free. A 34 million dollar jackpot is actually 34 million dollars for the winner/s.
I always think it’s funny when people act like the taxes are going to make it not worth winning.
Did you see the lotto, it’s up to 150 million?
Yeah, but taxes are going to take like 50 million back out of that.
Ok, so you’re saying you’d rather have nothing?
My Lotto-winning daydreams always have me counting on $390K per million on the face value (approximately 60% of the jackpot is the lump-sum prize, and assuming a 65% take of that after taxes gives me 39%).
So Tuesday’s $58M Mega-millions draw will get me about $22.62M (always supposing that the nice lady at the gas station followed my instructions properly).
Yeah, but we’re in California where, if it’s a lottery that operates in-state, we don’t have to pay CA taxes. Quite a few states do add state income tax to the federal tax, leaving a smaller share for the winner.
My magic daydream number is $319,500 per million in the prize. That is the immediate payout, minus state and federal taxes, and an immediate 10% to charity. Makes it around three and a third million at the usual opening value. There aint a whole lot of stuff I really gotta get that three million won’t buy. And I get to walk into a couple of good charity offices and really make their day.
