You’re not going to win the lottery, so don’t spend a bunch of money on tickets. Even if you do win, we’ve seen time and time again that lottery prizes are more often a curse than a blessing.
Don’t just take my word for it, let’s look at the numbers.
You won’t win anyway
The odds of having a jackpot winning ticket for the Powerball are about 1 in 76 million. Just to emphasise how small of a chance that is, you’re looking at around 0.00000001% of buying a single winning ticket. You have a better chance of finding the last of Willy Wonka’s golden tickets. Mainly because they’re fictional and nobody would care if you said you found one, so you might as well spend the $3 on a Wonka bar and eat some chocolate.
If the odds are so small, though, why do so many people play? As Adam Piore at Nautilus explains, we like to daydream of a better life, it’s super easy to buy a ticket and play and somewhere deep down we all know that someone has to win and it could be me.
If you want to buy a ticket for fun, there’s nothing wrong with that, but spending more than a few dollars on tickets isn’t worth it. Mathematically speaking, the only way to increase your odds of winning Powerball is to buy more tickets, but that doesn’t mean you should (despite what some folks are telling you).
Unless you’re willing to throw down outrageous amounts of cash, your odds hardly increase at all. As Jean Folger at Investopedia points out, buying 10 extra lottery tickets only increases your odds from 1 in 76 million to, well, 11 in 76 million, which is still astronomically small.
Of course, if you were determined to earn some kind of prize and “win” the lottery, there are ways to do that. Based on the numbers from a previous high-prize US Powerball in 2013, Walter Hickey at Business Insider explains that it’s possible to guarantee a “win” with some maths.
If you buy somewhere between 200 and 300 different lottery tickets, you’re all but guaranteed to end up with at least one cash prize. Then again, the non-jackpot cash prizes range anywhere from the most common $6 prize all the way up to the extremely rare $1,000,000 prize. So you could buy 300 Powerball tickets and guarantee a “win”, but that prize could be a measly $6.
If you really wanted to cross “winning the lottery” off of your bucket list, a better approach is to buy 35 tickets that each have a different number. You’ll be guaranteed a $6 win, but be down $95. Fun!
Even if you were already incredibly wealthy, you couldn’t even game the system to win the jackpot. As Lisa Wardle at Penn Live explains, you would have to buy every single one of the over 76 million different number combinations. That would cost you a few hundred million, which even with an epic jackpot would likely still put you in the hole.
Furthermore, if you were crazy enough (and rich enough) to do that, you better hope you’re the only one trying. Aaron Abrams, a mathematician at Emory University, explains to NPR that you would have to split the winnings if someone else tried use the same strategy.
If you want to experience how remarkably small your odds of winning are first hand (and without losing any money), try this Powerball simulator from the Los Angeles Times to see how truly bad your chances are.
If you’re still not convinced, financial expert Dave Ramsey points out that you are around 1,488,095 times more likely to die in a car wreck on the way to the gas station to buy the lottery ticket than actually win the jackpot.
Both of these are based on American odds and statistics, but it doesn’t make much of a difference.
Your Money Is Better Spent Elsewhere
Say you still want to go for the jackpot and decide to buy the 300 or so tickets it would take to guarantee a cash prize. At $2 a ticket, you’ll be spending $600.
If you don’t live close to somewhere that sells lottery tickets, however, Kyle Whitmire at AL.com notes you’ll have to consider your travel time and fuel consumption as well. Some folks drive for hours to buy tickets, and that makes buying tickets cost even more.
If, for example, you were thinking about driving a few hours to buy $600 worth of lottery tickets, you could be spending closer to $700 or $800 (plus the potential opportunity cost).
As the folks at Kiplinger explain, you’re far better off in the long run putting that $700 toward paying off credit card debt or bills, increasing your super contributions, starting a savings account, or investing in some safe shares that all but guarantee an actual return on the money you spent.
Dave Ramsey, whose financial advice we generally trust, goes so far as to say that large-scale gambling like lotteries is merely a tax on poor folks, vulnerable people and people who don’t understand maths.
Essentially, it gives a sense of false hope to the less fortunate that are willing to reach out for anything that could possibly help their financial state, or trick those who don’t get the maths. It’s just one more thing that can make being poor too expensive.
All of that said, occasionally paying a dollar to daydream about being a millionaire is cool and fun. You’re probably not going to win, but if you go in with the right mindset, buying a lottery ticket can give you a nice little morale boost for the day.
Plus, portions of the money people spend on lottery tickets usually goes to something beneficial for your state like education or parks, so you don’t have to feel too bad for playing.
Even if you do win, it won’t make you happy
OK, now let’s say you do win. You won’t, but for funsies let’s say you do. According to a study conducted by the National Endowment for Financial Education (NEFE), there’s a 70 per cent chance you’ll burn through that cash or lose it all within five years (regardless of prize amount).
Don McNay, author of the book Son of a Son of a Gambler: Winners, Losers and What to Do When You Win the Lottery, believes the chances are even higher, coming in at around 90 per cent. McNay attributes the quick loss to people getting too much money just too fast for them to deal with it. Carl Richards, a financial planner in Park City, Utah, suggests the same thing: it’s much easier for winners to mismanage their spending or savings because it’s just too much to handle.
Winners blow all their money on frivolous expenses or put it in the wrong places, and it’s gone before they know it. You can read about some real people that won big and then lost it all here at The Simple Dollar or here at Business Insider.
Those five years of winnings could be off-the-hook amazing, or they could be five miserable years filled with harassment, legal battles and family troubles. Michelle Crouch at Reader’s Digest spoke with several past lottery winners to get the skinny on striking it rich, and most sadly reported a terrible time. Friends might try to exploit you, your family will constantly bug you for money for everything and other people won’t stop asking you about winning the lottery.
Your identity is suddenly “that person that won the lottery”, not “you but with lots of money”.
More importantly, having money never guarantees happiness to begin with. Sure, research suggests that there are some ways to “buy happiness”, but there’s a big difference between going on a trip you saved up for and travelling whenever the mood strikes. The first is a treat, and the other becomes commonplace and falls victim to hedonistic adaptation.
The excitement of being wealthy wears off quickly. One regularly cited study, published in the Journal of Personality and Social Psychology in 1978, suggests that lottery winners were no more happy in the long term than regular people. Lottery winners’ happiness would spike when they won, but returned to pre-winning happiness levels within a few months. This happens because we each have a happiness baseline that we’ll always reset to, regardless of what changes in our environment.
Another study, led by Peter Kuhn, Professor of Biological Sciences and Professor of Medicine at the University of Southern California, suggests that coming into sudden wealth only exaggerates your current situation. If you’re unhappy now, winning the lottery will just make you rich and unhappy. If you feel fulfilled in life, however, it may be possible to stay happy after a lottery win.
There’s the problem. Thing is, people who already feel fulfilled in life rarely buy lottery tickets. Plus, the notion that winning the lottery means you won’t have to worry about money anymore is foolish. As Paul Golden, a spokesman for the NEFE, suggests, a lottery win means you’ll have to worry about money more than you ever have before.
If you’re going to play, at least do it right
If you’ve gotten this far and you still want to play Powerball, there are a few things you can do to help your odds.
For starters, Jean Folger at Investopedia recommends you only ever use your “fun money” to buy tickets. If your budget is so tight there’s no room for fun money, playing the lottery obviously isn’t a good idea. Then again, if you have some cash earmarked for entertainment, do what makes you happy.
Every now and then, there’s a lottery that has somewhat decent odds. What it takes to have decent odds is a relatively large jackpot, which this one certainly has. The second, a relatively small number of tickets to be sold, which this doesn’t have. There are unbelievably many tickets being sold for this lottery.
Wait until the jackpot is at least a few hundred million before you decide to buy in (though extremely small jackpots can have better odds as well). As Abrams said, you want there to be a relatively small number of tickets floating around. That’s not the case when the jackpot skyrockets, since lottery fever is spreads across the country. So have fun, but don’t play the current Powerball with any real hope of winning.
This post originally appeared on Lifehacker Australia. You can read the original article here.
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