A classic Gusher
Like many of my friends and fellow residents of this state, Wisconsin, I followed with interest the growing jackpot in the Powerball lottery game last week. I even bought a few tickets myself, but with no real idea of what I would do with almost three million extra dollars at my disposal. As it turned out, I did not win; not even the three-dollar match-the-Powerball-only prize. But amazingly, four people beat the odds and are now splitting the near-record payout.
Of the three people who have come forward with winning tickets, not one of them has elected to take all the money they could have won. Each winning ticket is worth $73.7 million, that is if the prize is paid out in annual amounts of $2.9 million for a duration of 25 years. Each winner also could and did decide to take a lump-sum payment right now. That means each winner now is $41,400,000 richer. It sure is a lot of money, but not when you consider what they gave away.
Let’s do the math: 73.7 minus 41.4 equals 32.3. So far three people have decided that they don’t need an extra $32,300,000 over the next 25 years, payable annually at $2.9 million. The odds of winning the jackpot (a figure I heard repeated often by the media and those who chose not to play) are approximately one in 80 million. That’s almost a dollar a chance they could have won.
How many people will be able to earn $73.7 million in their lifetime? For that matter, how many people will earn two million nine hundred thousand dollars in their entire life? If someone had told me I won $41.4 million but could have another $32.3 million if I lived for just 25 more years, I would take the chance that I might live that long and be smart enough to budget for an annual income of almost three million a year.
I should note that all the figures quoted are before-tax dollars. But even if you figure taxes would reduce the numbers by one half, those are still large numbers. And if you listen to the politicians, especially the Republican ones, taxes will always get lower after every election, the economy will always grow, and if the economy should falter, it won’t last long; not if we keep reelecting them. And remember every dollar spent on lottery tickets helps in the effort to keep our taxes low. Cigarette smoking can be considered extra tax revenue too, but you don’t see ads encouraging people to gamble their lives for full and rich tobacco flavor.
I guess sometimes things do make sense, if you look at it from a different perspective. As for me, I rent so what good does it do me to buy a lottery ticket if my landlord will raise my rent annually anyway (and they will)? The answer, of course, is there’s an 80-million-to-one chance of the greatest good happening, or in the case of the latest winners, the greatest good give or take 30 million dollars.
As Ever Yours,
Gusher