US Mega Millions Lottery Jackpot reaches $500 Million

[++$_]

There are lots of things to spend money on, even at the high end.

Sure, but they are not all that much better. The things you can get for $100,000,000 are not ten times better than the things you can get for $10,000,000.

[Garm]

There are lots of things to spend money on, even at the high end.

Sure, but they are not all that much better. The things you can get for $100,000,000 are not ten times better than the things you can get for $10,000,000.

You are, however, considered able to defend yourself if you make over 10,000 AM per year.

[buddy431]

There are lots of things to spend money on, even at the high end.

Sure, but they are not all that much better. The things you can get for $100,000,000 are not ten times better than the things you can get for $10,000,000.

Did you read what I wrote? With $100 million you can pay the Russians to haul your ass up to the international space station, plus get yourself a luxury yacht to live on the seas. That's worth a lot more than the nice condo you can get with your $10 million. Now granted, there is probably less of a difference between the $100 and $200 level marks, but you do realize that this is the most that a lottery prize has ever been (and the take-home money will likely be closer to $100 than $200 million). Even for the high-jackpot lotteries like Mega Millions or Powerball, there is a substantial difference between what you can do on a low prize (5-10 million) and a high prize (up to 100 million). I just don't see how you can say that the difference becomes meaningless - certainly not in this range (as long as you have a good imagination).

[Iulus Cofield]

There are lots of things to spend money on, even at the high end.

Sure, but they are not all that much better. The things you can get for $100,000,000 are not ten times better than the things you can get for $10,000,000.

The walls around my castle disagree.

[yoni45]

But you don't get $500 million. You get maybe $250 million for taking the money as a lump sum, and Uncle Sam takes half of that - you're looking at $100-150 million. And that's for the largest jackpot in history. To me, that is a fair difference than the $50 million you'd get on a $200 million jackpot, and especially the $15 million you'd get on a $50 million jackpot. $50 million buys you a trip into space and a nice house, $15 million you're just stuck with a house (and not even any house. You want to live in Jordan's pad? Be ready to lay down $30 million). You want a luxury yacht? Be ready to lay down $10 million plus just to get it, and then you still need to crew it. There are lots of things to spend money on, even at the high end.

And somehow, those particularities are ones that I'm pretty sure people making $30k a year are not all that concerned with when buying lottery tickets.

[dhokarena56]

That's why I'd just end up building myself a small house with a giant library and a sauna in the north of one of the Prairie Provinces. That's how I want to live, really- somewhere where it's dark and cold for a lot of the year and I can just lounge around and read and have lovesick sex with my future wife.

[sardia]

The lottery isn't real money until the pot gets big enough to buy a carrier battle group.

[Iulus Cofield]

I like the way you think.

[sourmìlk]

A single supercarrier is about $12 billion. I'm perfectly happy being able to construct a private island in the middle of the pacific ocean that also has a ski resort. Also I'm going to pay everybody on this forum to agree with me all the time. Although that might cost more than a carrier.

[lutzj]

Also I'm going to pay everybody on this forum to agree with me all the time. Although that might cost more than a carrier.

If you really had some financial savvy you'd find a way to charge us for disagreeing with you.

[Ghostbear]

A single supercarrier is about $12 billion.

You might want to research your numbers again. There could be some debate on the inclusion of the PA2 and Queen Elizabeth class, but wikipedia includes them in its list of supercarrier classes, so I will too.

That gives us:
Enterprise Class: $451.3 million, circa 1958, after adjusting for inflation from 1958 to 2010 (a bit off from the present, but the first result I found only went up to 2010), we get: $3.4 billion
Nimitz Class: If we use the cost of the newest one (being the most likely indicator of costs for an additional one, we get $6.2 billion in 2001. Inflation brings it up to $7.65 billion in 2010 dollars.
Gerald R. Ford Class: $9 billion to build.
PA2: £2.2 billion. After a currency conversion, we get: $3.5 billion
Queen Elizabeth Class: £3.9 billion. Currency conversion brings it to $6.2 billion.

Going with just the carrier itself, and not including your CAG, you get single digit billion dollar costs. $12 billion is a pretty big stretch, being about double the cost of anything except the biggest, baddest, and newest class of US carriers, which aren't even expected to go into service until 2015 (which will probably get delayed anyway).

Closer to the topic at hand, there's an obvious bit of diminishing returns for a lottery prize. Going from $10 million to $50 million is a huge leap, because the extra "more stuff" it gives you is still significant. Going from $150 million to $200 million is a significantly smaller leap, because the "more stuff" gained is much less substantial or desirable, compared to what has already been gained.

[kiklion]

Closer to the topic at hand, there's an obvious bit of diminishing returns for a lottery prize. Going from $10 million to $50 million is a huge leap, because the extra "more stuff" it gives you is still significant. Going from $150 million to $200 million is a significantly smaller leap, because the "more stuff" gained is much less substantial or desirable, compared to what has already been gained.

Furthermore, it depends on what you want. (assuming you actually know what you want. From my experience with my fiance/ex's 0% of women actually know what they want when asked the very direct question "What do you want?")

All I want, is to have enough money I could quit my job (and still support my fiance's goal of becoming a medical examiner) and pursue two of my 3 goals in life. To train in BJJ, to earn money from something most people consider entertainment, continue my college education at a time where I am in college to learn, not to get a degree for a job.

[sardia]

http://www.gpo.gov/fdsys/pkg/GAOREPORTS ... D-98-1.htm
Don't forget the maintenance cost for the carrier alone, which is about 22 billion dollars over the course of 50 years.

[Роберт]

Say I want some chocolate. There's a chocolate bar that's 1 kg and costs $20 bucks. I decide I only want to buy it if I can buy it with friends. You say if I'm willing to buy it with some friends

Then it should be equally worth it to go it alone.

Why would you only want to buy it with friends if you can afford the full thing on your own? Is there an analogous equivalent with money for your reason?

What. The. Heck. Is. Wrong. With. You. You just got done agreeing that just because I want to buy one small candy bar doesn't mean I want to buy a larger number of candy bars at that price. But you can't understand that I might not want to buy a very large candy bar all by myself?


I give up trying to explain things to you.

@Other people: you seem to forget that the utility of the "fun" of participating in a lottery is probably worth a pack of gum to some people, even if they lose. And of course if they win, it's worth a lot more.

[yoni45]

Why would you only want to buy it with friends if you can afford the full thing on your own? Is there an analogous equivalent with money for your reason?

What. The. Heck. Is. Wrong. With. You. You just got done agreeing that just because I want to buy one small candy bar doesn't mean I want to buy a larger number of candy bars at that price. But you can't understand that I might not want to buy a very large candy bar all by myself?[/quote]

Reading comprehension, it helps. I didn't ask whether you'd want to or not, or whether there are understandable reasons. The question was *what* those reasons are, and if they'd apply analogously to a monetary situation of this form.

[Роберт]

Reading comprehension, it helps. I didn't ask whether you'd want to or not, or whether there are understandable reasons. The question was *what* those reasons are, and if they'd apply analogously to a monetary situation of this form.

It already is a monetary situation. I'm only wanting to spend a dollar or two. That's why.

[yoni45]

Reading comprehension, it helps. I didn't ask whether you'd want to or not, or whether there are understandable reasons. The question was *what* those reasons are, and if they'd apply analogously to a monetary situation of this form.

It already is a monetary situation. I'm only wanting to spend a dollar or two. That's why.

Chocolate is not money. Again: the question isn't what do you want to do, it's why (and it's expected that this reason be rational -- not the equivalent of "because I feel like it"). If this investment is a sound decision and you can fully afford it, then why bother sharing all that benefit?

[Роберт]

Reading comprehension, it helps. I didn't ask whether you'd want to or not, or whether there are understandable reasons. The question was *what* those reasons are, and if they'd apply analogously to a monetary situation of this form.

It already is a monetary situation. I'm only wanting to spend a dollar or two. That's why.

Chocolate is not money.

Chocalate isn't money? Wow, I didn't realize that. However, here's a piece of wisdom for you: money is, in fact, money.

I'm serious this time about being done trying to explain things to you.

[Garm]

Reading comprehension, it helps. I didn't ask whether you'd want to or not, or whether there are understandable reasons. The question was *what* those reasons are, and if they'd apply analogously to a monetary situation of this form.

It already is a monetary situation. I'm only wanting to spend a dollar or two. That's why.

Chocolate is not money. Again: the question isn't what do you want to do, it's why (and it's expected that this reason be rational -- not the equivalent of "because I feel like it"). If this investment is a sound decision and you can fully afford it, then why bother sharing all that benefit?

Why is this thread suddenly about debating people and their choices? Who the heck cares if someone spends a dollar or two on the lottery. I think most people on this board are smart enough to know the odds of winning are minuscule.

[Enokh]

the question isn't what do you want to do, it's why (and it's expected that this reason be rational -- not the equivalent of "because I feel like it"). If this investment is a sound decision and you can fully afford it, then why bother sharing all that benefit?

That's a perfectly rational reason to do something. As a matter of fact, once you've taken care of bills, responsibilities, and have taken reasonable steps towards providing a safety net against future events. . .it's the BEST reason to do something with your money.

[yoni45]

Chocalate isn't money? Wow, I didn't realize that. However, here's a piece of wisdom for you: money is, in fact, money.

I'm serious this time about being done trying to explain things to you.

Make sure to take your toys too.

That's a perfectly rational reason to do something. As a matter of fact, once you've taken care of bills, responsibilities, and have taken reasonable steps towards providing a safety net against future events. . .it's the BEST reason to do something with your money.

Er, are we still referring to investing in the slim possibility of making a gajillion dollars?

Edit: scratch that, I just got what you meant. Let me elaborate: if you establish something as a "Good Thing" and you have the possibility to do so, then a rational move would be to engage in it. Robert established this investment as a "Good Thing", so I don't see why not to engage in it. I mean, with chocolate you can argue that you might just not have use for so much chocolate, sure. But according to Robert, more money is undeniably better.

Why is this thread suddenly about debating people and their choices? Who the heck cares if someone spends a dollar or two on the lottery. I think most people on this board are smart enough to know the odds of winning are minuscule.

The thread opened about how it seems silly to go into the lottery specifically because there happens to be a larger jackpot -- that's what I'm discussing?

My point isn't about whether playing the lottery is a good deal. It's about whether it's a rational course of action to be more inclined to play when the jackpot's bigger.

[Arrian]

the question isn't what do you want to do, it's why (and it's expected that this reason be rational -- not the equivalent of "because I feel like it"). If this investment is a sound decision and you can fully afford it, then why bother sharing all that benefit?

That's a perfectly rational reason to do something. As a matter of fact, once you've taken care of bills, responsibilities, and have taken reasonable steps towards providing a safety net against future events. . .it's the BEST reason to do something with your money.

In fact, the only requirement for "because I feel like it" to be rational is that you feel like doing "it" more than you feel like doing any other equal priced options.

[Heisenberg]

Why is this thread suddenly about debating people and their choices? Who the heck cares if someone spends a dollar or two on the lottery. I think most people on this board are smart enough to know the odds of winning are minuscule.

Unfortunately, that knowledge is not a requirement for lottery players, so the lottery tends to draw more low income individuals, making it a severely regressive tax (BOOOO!)

But, on the other hand, it's entirely voluntary and not forced on people (YAAAY!!!)

So it's both awful and wonderful.

[Garm]

Why is this thread suddenly about debating people and their choices? Who the heck cares if someone spends a dollar or two on the lottery. I think most people on this board are smart enough to know the odds of winning are minuscule.

Unfortunately, that knowledge is not a requirement for lottery players, so the lottery tends to draw more low income individuals, making it a severely regressive tax (BOOOO!)

But, on the other hand, it's entirely voluntary and not forced on people (YAAAY!!!)

So it's both awful and wonderful.

It is kind of terrible, it's true. In Colorado, the lottery profits go to funding our national parks. Which is nice. But it's hard for low income people to take a couple days off and go enjoy nature.

[Panonadin]

I wish I coulld win the lottery.

Working sucks. If I was rich I would help people who weren't.

I wish I could win the lottery.

Such a "Small" amount of money could be so life changing for so many people. Small is in quotes because I don't really mean a tiny amount (10 bucks). I mean small by lottery standards.

If I had money like some of the rich rich, more money then my kids kids could spend, I would hold free lotteries with small sums of money, yet probably life changing to those involved. I would screen the people who entered, I want income verification, backround information, an essay, maybe some people to vouch for them. Yeah.

How come people don't do this?

I wish I could win the lottery.

[Роберт]

I wish I coulld win the lottery.

Working sucks. If I was rich I would help people who weren't.

I wish I could win the lottery.

Such a "Small" amount of money could be so life changing for so many people. Small is in quotes because I don't really mean a tiny amount (10 bucks). I mean small by lottery standards.

If I had money like some of the rich rich, more money then my kids kids could spend, I would hold free lotteries with small sums of money, yet probably life changing to those involved. I would screen the people who entered, I want income verification, backround information, an essay, maybe some people to vouch for them. Yeah.

How come people don't do this?

I wish I could win the lottery.

Ummm... you do realize lottery winners are just as likely to file for bankruptcy in 3-5 years as they were if they lost, right?

Give a man a fish...

[induction]

Give a man 500 million fish.*


* Spread out over 26 yearly installments, or a single installment of 363 million fish.**


** Minus taxes.

[sardia]

Give a man 500 million fish.*


* Spread out over 26 yearly installments, or a single installment of 363 million fish.**


** Minus taxes.

It doesn't matter how you give a man x million fish, most of them go crazy. They either blow all their fish on worthless seashells or die of isolation because they can't trust anyone, since everyone who was distantly connected to them want some of your money. And they all have these sob stories of how desperately they need it.
By all accounts, it's safer to save and then invest the money that one spends on lottery tickets. If you make it big, you'll have the safety net that you earned the money, not given to you on a silver platter. Nobody begs you for money, and the returns are higher than the lottery.

[jakovasaur]

Ummm... you do realize lottery winners are just as likely to file for bankruptcy in 3-5 years as they were if they lost, right?

Do you have a citation for this?

[Panonadin]

Give a man some capitol.........

And he'll start a business to provide for his entire family and his extended family, and feed the poor, and save lives.

Not everyone is an irresponsible piece of crap with large sums of money.

[Adacore]

Ummm... you do realize lottery winners are just as likely to file for bankruptcy in 3-5 years as they were if they lost, right?

Do you have a citation for this?

I thought they were more likely, actually. According to this study, it's double the average rate of bankruptcy for the general population. Some speculation as to why that is is given in the article, and there's more speculation in the second point of this Cracked article (which is where I found the link to the study).

[sourmìlk]

My guess is that knowledge of that phenomenon helps reduce the likelihood of going crazy with all of the money you've just made, but I don't know that for sure.

[Adacore]

My take on it is that a lot of people will see lottery winnings over a million or so as 'unlimited money forever', because they just couldn't imagine spending that much before they won. So when they do spend they don't bother to track how much they're spending, because the money is 'unlimited', and they end up spending more than they have.

[jakovasaur]

Adacore your study was only on winners of up to $150,000. I can easily see someone blowing through that like nothing. New cars, new home, new lifestyle, it's all gone. But I'd be very surprised if the stats are similar for people who won a few million, much less $500M. It seems nearly impossible to waste all of that money.

[Adacore]

Oh, I didn't actually look at the details, oops

I've certainly also heard anecdotal evidence of multi-million winners spending all their lottery winnings, but you're right, wasting hundreds of millions does sound challenging.

[jakovasaur]

There's even a movie!

[ameretrifle]

A lot of things I've found making that sort of claim seem to cite this: Paul Tharp, “Lottery Raises Issues of Cents and Sensibilities,” New York Post, November 14, 1997. Of course, that was in an attempt to beat Google Scholar into submission, so anyone with glorious, glorious access to *real* databases (y u no even link in the dropdown google if i were still working reference do you know how much harder my life would be t(-_-t)) might have better luck.

Wrestling with public library databases got me this cite: Larsson, Bengt. "Becoming a winner but staying the same: identities and consumption of lottery winners." The American Journal of Economics and Sociology 70.1 (2011): 187+. Their figures are more like this:

When asked about their plans for the remaining money, some of the dreams about winning still seemed to be alive. Even though one-quarter of them planned to spend the money on a house or car, over half wanted to treat themselves with a little extra, and almost one-third planned to reduce their working hours or retire. As shown in Table 3, however, only 20 percent had already spent most of the money. Obviously, most of these spendthrifts are winners who received lump sums. It is worth noting that approximately only one-third of the lump sum winners had spent the bulk of their winnings, even though it had been more than two years since the win for almost 80 percent of them. (7) Again, it seems that only a minority of the lump sum winners were overtaken by extravagance.

These were Swedish winners self-reporting, though, and range from "approximately US $67,000-1,010,000".

Now, if you want citations on the average happiness of lottery winners reverting back to their personal baselines....

[KnightExemplar]

Adacore your study was only on winners of up to $150,000. I can easily see someone blowing through that like nothing. New cars, new home, new lifestyle, it's all gone. But I'd be very surprised if the stats are similar for people who won a few million, much less $500M. It seems nearly impossible to waste all of that money.

Well if you go lump-sum and get taxed, you're down to like $260 M already. If you are a guy who likes to give money away to charity, you can blow away your entire earnings by giving away "half" of your jackpot. Ex: You take the lump sum (down to $390M) and then give away $250 M. Then you get taxed ~$140M and you're left with nothing!

If you don't know how taxes work, you can easily give away too much thinking you have a lot left over.

[Iulus Cofield]

Is there a limit on charitable tax deductions?

[KnightExemplar]

Is there a limit on charitable tax deductions?

I'm not rich enough to care about these sorts of details. But I know of a few of them. I know that no matter how many deductions you have, you cannot escape the alternative minimum tax. (outside of the current 15% rate on long-term capital gains, which isn't taxed as income)

http://en.wikipedia.org/wiki/Alternative_Minimum_Tax

Woops, I was wrong. Charitable donations appear to work against the AMT. Well, when I become a millionare, I'll keep that in mind

So the answer to your question is: I'm not rich enough to know or care about it. And tax law is complicated...