“Never Tell Me the Odds!”

Never tell me the odds! – Han Solo

I like to play the lottery occasionally.  It’s not a regular habit, but every once in a while if I have a bit of cash in my wallet (which isn’t all that often) and happen to be somewhere that sells tickets, I’ll buy a few.  Now, I’m well aware of the old saying (and I’m paraphrasing Ambrose Bierce here) that lotteries are a tax on people who are bad at math.  I’m also well aware of the odds against winning.

Let’s take the Mega Millions lottery that’s available in many states in the USA as an example.  According to the quite informative Wikipedia article on Mega Millions, the odds of winning the top prize are 1 in 258,890,850.  Those odds are so terrible that it’s hard to even get my mind around.  By way of comparison, though, here are a few events more likely than winning the lottery.

  • Winning an Olympic Gold Medal – 1 in 662,000
  • Being Struck by Lightning in Any Particular Year – 1 in 1 million
  • Becoming a Movie Star – 1 in 1,505,000
  • Being the Victim of a Shark Attack – 1 in 11.5 million
  • Being Canonized by the Catholic Church – 1 in 20 million
  • Death by Vending Machine – 1 in 112 million

Of course, since none of these things are mutually exclusive, it’s more likely that all of them will happen to you than you winning the library.  On the bright side, you are far more likely to win the lottery than have your house hit by a meteor (1 in 182,138,880,000,000).

Despite knowing these ridiculous odds, I still willingly hand over my money to get a few tickets.  Why? 

Hopefully, it’s for the same reason most people play the lottery:  I consider it to be an entertainment expense.

As a side note, if you are seriously playing the lottery because you believe that you have a chance of winning (Or, even worse, you see it as a way out of a financial crisis), look at those odds again.  They are comically awful.  I know people win, but even the counter examples I provided of events more likely to happen to you don’t really get across just how ludicrously unlikely it is that you will be the one to hit the jackpot.  Even if you bought $1 million worth of tickets, the odds would be against you.  Think about that.

Back to keeping myself entertained, buying a lottery ticket does allow me to have the fun of contemplating what I would do with massive amounts of money if the near impossible did happen, and my numbers came up.  You can’t win if you don’t play, so having that ticket in hand means that there is the possibility, unbelievably remote as it is, that I could find myself incredibly wealthy in an instant.

With that ticket comes hours to a few days of playing “What if I won?”  Right off the bat, there’s a big decision to make: lump sum or annuity.  Most people seem to take the lump sum; however, I’m young enough to go for the annuity.  Yes, it stretches payments out (For 30 years, in the case of Mega Millions), but you end up with a lot more money in the long run.  As of this writing, the current Mega Millions jackpot is $93 million (Some lucky person won Powerball, so it is down to a measly $40 million.).  That means $3.1 million per year over 30 years.  If about a third of that is lost to taxes, I’m still walking home with about $2 million per year, which is a wee bit higher than my current annual salary.  And the vampire in charge around here doesn’t actually pay us at all. 

So $2 million.  What do I do with $2 million?  I’ll start with paying off some debts.  Credit card bills?  Gone.  Student loan?  Gone.  Mortgage?  Wait a moment.  If I pay off the mortgage, I no longer get the mortgage deduction on my taxes.  Maybe I should keep it.  No, you moron.  The money you save on interest alone more than makes up for that deduction.  So mortgage?  Gone!

Then there’s money to put aside for the kids’ college funds and my later years when I’m not receiving a lottery check every year.  Based on what I’ve been reading $250,000 per kid should more than cover it, and then I’ll put $200,000 aside for my retirement fund this year. 

With that done, there are some pressing maintenance matters around the house to deal with as well as a car that is rapidly nearing the end of its life.  I could also take the kids to England, so we could see the sites, visit the Harry Potter sets, and, of course, go to the Doctor Who Experience.

Even with all of that, I’d have almost a million dollars left over.  And that’s just the first year.  In later years, without the college funds and bills to deal with, I’d have so much more to be able to help friends and family members, the local community, and other causes I support. 

And maybe there’d be enough left over for the big dream.  As I discussed in THIS POST, several groups around the country and recreated the sets of the original Star Trek series for use in making fan films.  No one to my knowledge has recreated the Star Trek: The Next Generation sets, though.  If I had the money (and this would probably require that $225 million Powerball jackpot that someone just won rather than the Mega Millions), I would buy or lease some warehouse space large enough to hold the sets and other needed production facilities, such as dressing rooms and so on, build the sets (or hire lots of people to build them, since I’m dangerous with tools), and start making my own fan films.  I have no idea how much that would actually cost, but I imagine that $225 million (Or about $5 million per year) would give me a pretty decent start.

So…yeah…I have put a little bit a thought into this.  Every time I buy a lottery ticket, the fantasy gets a bit more detailed.  I have a lot of fun working through the scenarios, more than enough to justify the couple of dollars I’ve spent on the tickets.

Then the drawing arrives.  My numbers don’t come up.  And the fantasy is over once again.  I knew I wouldn’t win.  I didn’t expect to win.

But what if I did?

- Alan Decker

@CmdrAJD on Twitter