Winning the Powerball Lottery Won’t Solve Your Problems
You won’t win the current Powerball jackpot , so don’t waste a ton of money on tickets. Even if you win, we’ve seen, over and over again, that lottery prizes are more often a curse than a blessing. Don’t take my word for it, let’s look at the numbers.
You won’t win anyway
The odds of hitting the jackpot on the current Powerball are roughly 1 in 292 million. Just to emphasize how unlikely this is, you’re looking at roughly 0.000000003% of the purchase of one winning ticket. You have a better chance of finding Willy Wonka’s latest Golden Ticket. Mostly because they are fictional and nobody cares if you say you found it, so you can spend $ 2 on a Wonka bar and eat some chocolate.
But if the odds are so small, why are so many people playing? As Nautilus’ Adam Piore explains , we love to dream of a better life, it’s very easy to buy a ticket and play, and somewhere deep down we all know that someone has to win, and that could be me . If you want to buy a ticket for entertainment, there is nothing wrong with that, but spending more than a few dollars on tickets is not worth it. Mathematically, the only way to increase your chances of winning Powerball is to buy more tickets, but that doesn’t mean you should ( despite what some people tell you ). Unless you’re willing to shell out huge amounts of money, your chances will hardly increase. As Investopedia’s Jean Folger points out , buying 10 extra lottery tickets only increases your odds from 1 in 292 million to, well, 11 in 292 million, which is still astronomically low.
Of course, if you were determined to earn some kind of prize and “win” the lottery, there are ways to do it. Based on numbers from a previous Powerball tournament in 2013, Business Insider’s Walter Hickey explains that you can guarantee a “win” with some math. If you buy 200 to 300 different lottery tickets, you are almost guaranteed to receive at least one cash prize. On the other hand, non-jackpot cash prizes range from the most common $ 4 prizes to the extremely rare $ 1,000,000 prizes. So you can buy 300 Powerball tickets and guarantee a “win,” but that prize can be a measly $ 4. If you really want to cross “winning the lottery” off your wishlist, the best approach is to buy 35 tickets, each with a different Powerball number. You will be guaranteed a win of $ 4, but you will lose $ 66. Fun!
Even if you were already incredibly rich, you couldn’t even play the system to win the jackpot. As Penn Live’s Lisa Wardle explains , you’ll have to buy each of the over 292 million different number combinations. It will cost you roughly $ 584 million and – even with this massive $ 1.3 billion jackpot – will still fall into a hole. You only get about $ 806 million if you get a lump sum (which most people do), and you have to pay 39.6% of that amount in federal taxes. There remains only $ 486 million, or $ 98 million in the red. Moreover, if you were crazy enough (and rich enough) to do it, you better hope that you are the only one trying. Aaron Abrams, a mathematician at Emory University, explains to NPR that you have to split the winnings if someone else tries to use the same strategy.
If you want to see firsthand how small your chances of winning (and not losing money) are, try this Los Angeles Times Powerball Simulator to see how bad your chances really are. If you are still unsure, a financial expert Dave Ramsey notes that the probability , that you will die in a car crash on the way to the gas station to buy a lottery ticket, about 1,488,095 times greater than actually win the jackpot.
Your money is better spent elsewhere
Let’s say you still want to hit the jackpot and decide to buy around 300 tickets to guarantee a cash prize. At $ 2 per ticket, you will spend $ 600. However, if you don’t live close to where Powerball tickets are sold, AL.com’s Kyle Whitmire notes that you will also have to factor in travel time and fuel consumption. Some people drive for hours to get tickets, which makes ticket purchases even more expensive.
If, for example, you thought about driving a few hours to buy $ 600 Powerball tickets, you could spend about $ 700 or $ 800 (plus potential opportunity cost). As the staff at Kiplinger explain , in the long run you will be much better off spending that $ 700 paying off your credit card debt or student loans, increasing your 401 (k) contributions, opening a savings account, or investing in some easy money. index funds that practically guarantee a return on the money you spent.
Dave Ramsey, whose financial advice we usually trust , goes as far as stating that large-scale gambling like lotteries is just a tax for the poor, vulnerable and non-math-savvy people. Basically, it gives a sense of false hope to those less fortunate and willing to do whatever might help their financial situation or trick those who don’t understand math. This is just another thing that can make it too expensive to be poor .
All of this goes to show that sometimes paying a dollar to dream of becoming a millionaire is cool and fun. You probably won’t win, but if you get into the game with the right mindset, buying a lottery ticket can boost your morale a little all day. Plus, some of the money people spend on lottery tickets usually goes towards something good for your state, like education or parks, so you don’t need to feel too bad playing.
Even if you win, it won’t make you happy.
Okay, now let’s say you win. You won’t, but for the fun of it, let’s say you do. According to research by the National Endowment for Financial Education (NEFE) , there is a 70% chance that you will spend this money or lose everything within five years (regardless of the prize amount). Don McNay, author of The Player ‘s Son’s Son: Winners, Losers, and What to Do When You Win the Lottery , believes the odds are even higher, at around 90%. McNay attributes the quick loss to the fact that people got too much money too quickly for them to handle. Carl Richards, a financial planner in Park City, Utah, suggests the same thing : It’s much easier for winners to mismanage their spending or their savings because it’s too hard. Winners spend all their money on frivolous spending or put it in the wrong places, and they leave before they realize it. You can read about some real people who won and then lost everything here at The Simple Dollar or here at Business Insider .
Those five years of winning can be amazing, or they can be five miserable years filled with harassment, legal battles and family problems. Michelle Crouch of Reader’s Digest spoke with several past lottery winners to get rich and sadly reported terrible times. Friends may try to take advantage of you, your family will constantly seek money from you for everything, and other people will not stop asking you about winning the lottery. You suddenly become “the person who won the lottery”, not “you, but with a lot of money.”
More importantly, having money never guarantees happiness from the start. Of course, research shows that there are several ways to “buy happiness,” but there is a big difference between the trip you save up for and the trip when your mood is uplifting. The first is pleasure, while the second becomes commonplace and becomes a victim of hedonistic adaptation . The excitement of wealth passes quickly. One regularly cited study published in the Journal of Personality and Social Psychology in 1978 suggests that lottery winners were no happier than ordinary people in the long run. The happiness of lottery winners increased dramatically when they won, but after a few months it returned to the level of happiness before winning. This is because each of us has a basic level of happiness that we will always return to, no matter what changes in our environment.
Another study by Peter Kuhn , professor of biological sciences and professor of medicine at the University of Southern California , suggests that sudden wealth only exaggerates your current situation. If you are unhappy right now, winning the lottery will only make you rich and unhappy. However, if you feel fulfilled in life, you may be able to stay happy after winning the lottery. This is where the problem is. The fact is that people who already feel satisfied in life rarely buy lottery tickets. Plus, the idea that winning the lottery means you don’t have to worry about money anymore is silly. As suggested by NEFE spokesman Paul Golden, winning the lottery means you have to worry about money more than ever before .
If you’re going to play, at least do it right
If you’ve come this far but still want to play Powerball, there are a few things you can do to improve your chances. First, Investopedia’s Jean Folger recommends using his “funny money” only to buy tickets. If your budget is so tight that there is no room for fun money, obviously playing the lottery is not a good idea. On the other hand, if you have money for fun, do what makes you happy.
Best of all, Aaron Abrams, a mathematician at Emory University , told NPR that you want to wait for a very big jackpot lottery :
From time to time, lotteries are held with pretty good odds. To have decent odds, you need a relatively large jackpot, which is definitely there. Secondly, there is a relatively small number of tickets sold that it does not have. This lottery sells an incredible amount of tickets.
Wait until the jackpot is at least $ 380 million before you decide to buy-in (although very small jackpots may have better odds as well ). The current Powerball prize pool is definitely big enough to be considered, but as Abrams said, you want relatively few tickets around. This is not the case for the current $ 1.3 billion jackpot as the lottery is spreading across the country. So have fun, but don’t play the current Powerball with a real hope of winning.