$1 Billion Lotto Drawing

So, now the spinning heads on tv are referring to it as mega billions. But is it? I thought it was called mega millions due to it being several million. Wouldn’t mega billions require a larger number of billions than it currently is? Let’s say at least 5 billion or maybe 10?
 
TRocket said:
If I win...DC-3, DC-6, DC-7, DC-9, B727, MD-80, MD-11 and a Piper Cub. And about 500 Acres in Texas where I will build my modest house, runway and hangars
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I’m glad you will just build a modest house. For a moment I thought you might go all extravagant on us.

But just one question. Texas?
 
Ken Ibold said:
No, taxes don't take 600 million. The billion is based on the "principal" buying an annuity that pays out over 30 years. The lump sum is what they would use to buy the annuity, and it's typically a half to a third of the published jackpot, depending on the financial markets. They publish the bigger number because, well, it's a bigger number.
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Yes, but you don’t have to take the winnings as an annuity, you can take them as the lump sum but it’s much less tax efficient of course than taking it as an annuity. I think I’d rather take all of my money now. Who knows what shape things would be in 30 years down the road.
 
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Ken Ibold said:
They publish the bigger number because, well, it's a bigger number.
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Which I’ve always felt borders on fraud.

For instance, $1 million up front is very different than $50k a year for 20 years.

Were it anyone other than the government, they would be forced to advertise the actual cash value.
 
Ken Ibold said:
No, taxes don't take 600 million.
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Ryanb said:
That’s what they were saying. Taxes would end up getting about 600 million or thereabouts. Still wouldn’t make for a bad payday.
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Oops, I wrote it backwards. My fault. Based on a billion, taxes would collect about $300 million, leaving you with $600 million net. That’s provided of course that you take it as a lump sum.
 
FastEddieB said:
Which I’ve always felt borders on fraud.

For instance, $1 million up front is very different than $50k a year for 20 years.

Were it anyone other than the government, they would be forced to advertise the actual cash value.
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They actually do publish the current cash value but it’s just not as overtly publicized as the total future value of the annuity. I would imagine that the percentage of people who play the lotto who don’t understand that the lump sum is smaller is a relatively small percentage. So I don’t see any fraud in the way it is presented.
 
Full disclosure: Without going into specifics, I’ve seen the destructive effects of compulsive gambling up close and personal. Involving the lottery. So this whole mania gives me a slightly sick feeling.

Of course, for most people it’s harmless entertainment. But many are spending dollars on lottery tickets they can ill afford to spend. And it’s often the poorest that spend the most.

Imagine if every dollar spent on lottery tickets instead went into an “equity income” mutual fund or equivalent. Over the years the miracle of compound interest would virtually guarantee being a “winner” in the long run.

But it is what it is. It’s just that behind the mania lies a dark side, a side our government, at the very least, glosses over.
 
I won’t buy one because I fundamentally object to the taxation. It really ends up being an unlegislated taxation windfall for the government in my opinion. Half the proceeds to the government? No thanks.
 
Every time our office pool gets spooled up (>$100 million jackpot) I reccommend pooling the money we spend until someone wins and going to the local casino and putting it on black and let it ride. Odds are better and least we have a chance at winning something. Of course I put my $2 in anyway.
 
I would start a chain of trade schools and a chain of flight schools, and thus waste every dollar.
 
FastEddieB said:
Imagine if every dollar spent on lottery tickets instead went into an “equity income” mutual fund or equivalent. Over the years the miracle of compound interest would virtually guarantee being a “winner” in the long run.
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At $2/ticket, 4 times a week, 52 weeks in a year that comes out to $416/yr. (That's my investment anyway.)

Granted I'm not in the demographic you're talking about, but I don't see $416/year producing $1.6 Billion, even with the miracle of compound interest.

I will agree that the $416 would probably make more money invested in mutual funds than the lottery will typically pay.
 
I also consider it a voluntary tax, and I refuse to pay...

My fellow employees of my unit have a lotto club and they asked me this week if I wanted in. With a straight face I responded, "No. I just plan to sue you guys if you win for not including me." They actually paid my way for me, saying they did so, so I couldn't sue. Now I feel like a US Corporation, having someone else pay my taxes!
 
Anymouse said:
At $2/ticket, 4 times a week, 52 weeks in a year that comes out to $416/yr. (That's my investment anyway.)
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True, but run the numbers for $20/week. And many folks spend a LOT more than that on lottery tickets on a regular basis.

And add in compounding interest and/or dividends over decades. It can amount to a sizable sum over a lifetime.

Sadly, many if not most Americans are ignorant of investment strategies - strategies that can work for rich and poor.
 
Ou office pool is $20/week and has been going for years. I have yet to participate. At $1k/year I'd rather fly.
 
FastEddieB said:
True, but run the numbers for $20/week. And many folks spend a LOT more than that on lottery tickets on a regular basis.

And add in compounding interest and/or dividends over decades. It can amount to a sizable sum over a lifetime.

Sadly, many if not most Americans are ignorant of investment strategies - strategies that can work for rich and poor.
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Again, I'm not in your demographic. I pretty much limit myself to one number per game, drawn multiple times so when I'm out of the country, I have the possibility (however remote) of having my numbers come up.

However, no arguments from me. I know there are a lot of people that pretty much spend all their money on the various numbers games.

BTW... Using a nifty finance tool, assuming $20/week, 52 weeks a year, for 20 years, at 5% you get a bit more than $35k. For 30 years you get $72k. Not sure if that's daily or annual compounding.
 
Well, from where I sit the entertainment value of shopping for jets and yachts was worth it. I put in $10 and won $6. So a $4 fantasy? I can afford that.
 
Anymouse said:
...or $53 million/yr if you take the annuity. What would that be... ~$36 million after taxes?
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Thanks to recent tax changes, the federal tax is 24.5% with a variable state tax depending on where you purchased the ticket. The lump sum is estimated at 904 million or 682.5 million after federal taxes. In NC, a further 5.4% is taken, so we're down to the neighborhood of 677 million.

Oh woe is me...
 
As I said, I spent $180 on lotto tickets.

Won $8.

Re-invested it for tonight's drawing.

Update to follow.
 
Heard a lady on the radio this morning say she'd purchased $300 worth :eek:
 
bflynn said:
Thanks to recent tax changes, the federal tax is 24.5% with a variable state tax depending on where you purchased the ticket.

Oh woe is me...
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I'm no tax expert, but the top rate for individuals is 37% as best I can tell.
 
Once I win, will I be able to fly the P-51 I’ll buy on Basic Med if I don’t exceed 250 knots? Or will I have to buy my own private island outside the US and put in an airstrip? Oh heck, I’ll just do that anyway, so never mind.
 
Wow I was so close!!!!

Only missed it by 6 numbers!!!!
 
bflynn said:
The lump sum is estimated at 904 million or 682.5 million after federal taxes. In NC, a further 5.4% is taken, so we're down to the neighborhood of 677 million.
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Hardly even worth burning the gas in the car to go buy a ticket for that amount...

:)
 
I think I would start an airline, then I could lose it all in two years :)
 
Cash option up to a billion now. Well 904 million. Close enough.
 
FastEddieB said:
True, but run the numbers for $20/week. And many folks spend a LOT more than that on lottery tickets on a regular basis.

And add in compounding interest and/or dividends over decades. It can amount to a sizable sum over a lifetime.

Sadly, many if not most Americans are ignorant of investment strategies - strategies that can work for rich and poor.
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a monthly investment of $8.00 bearing an annualized return of 11% with gains compounded monthly could grow to $20,226.26 in 30 years! a monthly investment of $80.00 bearing an annualized return of 11% with gains compounded monthly could grow to $202,262.57 in 30 years!
 
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