It sounds a simple concept. Give people hope of instant riches. Someone will win. Those that don’t can feel good. After all, their ticket money will fund education (“for the kids”). Let’s dive in.
But…..Someone will win. Eventually, yes. What are the odds then? They are 1 in 292 million. Let’s put that in perspective. The professional baseball stadium in our city holds 47,000 people. Picture that stadium full. There are 81 home games each year. If you fill that stadium 81 times each year with all 47,000 people it would take 77 YEARS of baseball to get to 292 million and find the one theoretical Powerball winner.
But…..It could make me instantly rich. Correct. (These numbers will be estimates for concept). Let’s say the Powerball jackpot is 100 million. You’d take the lump sum (99% do). That turns the 100 million instantly into about 60 million.
But…..I would still be really rich. Correct. But, the tax man is coming for probably around 50% all said and done. Now, the 60 million becomes 30 million.
But…..I’d have a great wealthy lifestyle. Correct (whatever that means), but likely only for awhile. Statistically, 70% of the winners, those who beat incredible 1 in 292 million odds, go stone cold broke. THEY LOSE ALL OF IT, 70%.
But…..I’ll be one of the 30% who succeed. Perhaps. You better have the right professionals in place BEFORE you win. The sharks will be coming for you. Do you think people will know you won the jackpot? You better hope not. If they do, you best be ready to turn down an infinite amount of requests. Family and friends may be looking at you to pay off their debts, buy them stuff, and pay for anything and everything you are involved in. When our culture decides “you really didn’t earn or deserve the money” (i.e. inheritance, lottery winners, maybe athletes/celebrities), the guilt is often laid on thick.
But…..It goes to a good cause, education. Here’s the grand argument. Even if I don’t win (which you won’t) and even if you win and go broke (another likelihood), it still is OK. After all, it was for the kids. Here’s where a large dose of B@#LL%^IT is administered. It varies by state and it depends on what resource you look to. But, the general consensus is that somewhere between 0% and 30% actually goes to these “worthy” programs. You heard that right…as low as 0% in some cases goes to education. But, what about the commercials? Here’s the truth. There are great charitable organizations where more than 90 cents of every dollar you donate goes directly to the cause. Don’t kid yourself with this “it goes to education crap.”
Here’s the scary part. Look up the statistics of who plays the lottery. Aside from when the jackpots get inordinately large, the majority of people buying tickets range from lower middle class to poor. If the lottery is collecting all this revenue to pay out 100 million which really only is 60 million which then they take back 30 million in taxes, what is going on? I thought the poor don’t pay taxes or at least, minimal taxes. Do the politicians know the math? Is this how the lower income people in our country are taxed?
Hopefully, the unfortunate reality with the lottery is that it’s just a case where good intentions went horribly wrong. The sinister possibility is that the lottery is the system created in which the relatively poor are taxed. This way, the politicians can claim that they’re on your side. That we’ll cut your taxes (income). All the while knowing that you’ll put that money right back in their coffers through the lottery system.
If you want to buy a ticket for fun when the jackpot is high, go for it. If you’re relying on the Powerball as your financial plan, come on. Start back up at the top and read this again.
“Forget the lottery. Bet on yourself instead.” -Brian Koslow
