When the jackpot is much more that the cost of buying every number combination

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Winston said:
Well, you wouldn't. The article showed that it would be impossible to even buy the required number of tickets: "If you were able to buy one ticket every second, it would still take you more than nine years to buy every combination. And that's optimistic: You have to ensure that you buy every number just once -- not just 292 million quick-picks." That's why I found the article "fun" and not "useful."

Smaller lottos make it only slightly more practical, as that 1992 effort showed.
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I read the article. I didn't say you could, or couldn't, purchase all the tickets. What I said was why would anyone what to do it? It makes no sense from the get go because you would end up with less money than you started with than if you never played the game.

If you purchased (1) $2 ticket of each possible 292,201,338 numbers you have to spend $584,402,676. In addition to the cash jackpot win of $1,000,000, you also win an additional $93,422,979 on 11,751,115 more winning tickets for a grand total winnings of $1,093,422,979! If you can deduct the $560,900,444 you spend on loosing tickets, you have to pay federal and state taxes on the net taxable income of $532,522,535. This amounts to $207,683,789 to the Feds @ 39% and I'll guess an average of 6% to your state which is another $31,951,352 for a total tax bill of $239,635,141.

So at the end of the day, how much money do you have.

$1,093,422,979 winnings - $584,402,676 ticket expenses - $239,635,141 tax payments = $269,385,162 in your pocket.

Yes, you won the lottery, but you lost the war. You started the week out with $584,402,676 in the bank and ended up with $269,385,162 in your pocket which is $315,017,514 less than you started with. Yes those 280,450,222 loosing tickets killed you!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

On the other hand, purchasing a handful of tickets, equivalent to the price of a movie ticket, yields a finite potential to make $50,000 per day for the rest of your life if you win. A great upside considering you probably don't think it was worth the $10 you paid to see many of the movies you see in a theater since you can see them on TV or cable 3 to 6 months later for free....

Bob
 
A group of my coworkers won $50 mil back about 5 years ago. They were playing $20 each per week. I remember hearing all the cheering and I wondered who has office parties at 8am?? After a drawn out lawsuit from the others who thought they were included but weren't, they finally got around $1.4 mil each. No tax on lottery winnings in Ontario. You get what you win.

I hear that winning the lottery is the worst thing that can happen to you as everyone close can turn on you. Is it really a win then?
 
I'd just farm with the money until it's gone...
Depending on the current farm commodity trends, it can be a funny joke or not too funny...
Oh, ya'll can come fly on the huge hay field I'll have in the center of the property.

Adrian
 
bobkrech said:
I could simply invest that amount in conservative investments with a 5.5% annual pretax rate of return and be earning $50,000 per day after taxes for the rest of my life!
Bob
Click to expand...

Please Bob, I am begging you, let me know what this conservative investment that is paying 5.5% now. :)
 
jderimig said:
Please Bob, I am begging you, let me know what this conservative investment that is paying 5.5% now. :)
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Conservative is in the eye of the beholder. Conservative is long term investment, not day trading. Since circa 1897 the DJIA has exhibited a 5.05% average annual growth rate and since circa 1952 the S&P500 has exhibited a 6.9% average annual growth rate, and the NASDAQ has exhibited an average 9.2% average annual growth rate since 1971, and I'll take a minimum 1% rate of return on cash in a money market fund.

The markets during big recession/depression in the past 60 years recovered their original value in 3 years. 4 years of cash reserve will bridge this if you do not want to touch any stocks during that period. You do not get much of a return on cash in a MMA. You only real long term value increase and growth above inflation with stocks. A portfolio that provides 5.5% annual return with a 5% annual withdrawal might consist of 20% money market cash funds, 30% DJIA (or large cap), 30% S&P 500 (or mid cap), 20% NASDAQ (or small cap). An occasional rebalancing takes some of the profits and moves them into the cash reserve fund from which you monthly income is extracted. If you are not trying to preserve the funds forever, you could accelerate the withdrawal to 8% and not deplete the fund for 42 years (rough approximation.)

Based on long term data, the average annual rate of return for the proposed diversification is (20% x 1%)+(30% x 5.05%)+(30% x 6.9%)+(20% x 9.2%)=5.62%

FWIW

Bob
 
Bob,,
Your fingers must be a blur on an adding machine. ....
You had me,, all was well and good till the 5% annual withdrawal. ....
At least initially Ima gonna need a bit more than that......

Teddy
 
jderimig said:
Please Bob, I am begging you, let me know what this conservative investment that is paying 5.5% now. :)
Click to expand...

Well......investing wisely, in high quality stocks & bonds.
For instance these I have owned for 40 yrs & the bonds which are "laddered" meaning every so many years 1 comes due & another is purchased to replace.

At current yield.

AT&T 5.66% price now 33.90 then 22.86 but split 2x & now own triple amount. based on original paid price yield is 14%
Exxon 3.88 % today blah...blah ..blah 28%
IBM 3.95% today total yield over the years 18%
Chevron 5.21% today total yield over the year 42%

All dividends re-invested over the years, buying more stock = compound interest.& that friendo is what it's all about.
Power of compound interest.

Here are some current bonds I have, which anyone can buy right now, check the yields.......

Screen Shot 2016-01-13 at 8.15.02 AM.png

Schools in this country are VERY lacking in teaching the basics of whats needed to survive economically in our world today.
One must look out for one's self to survive.......:wink:
 
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blackjack2564 said:
Well......investing wisely, in high quality stocks & bonds.
For instance these I have owned for 40 yrs & the bonds which are "laddered" meaning every so many years 1 comes due & another is purchased to replace.

At current yield.

AT&T 5.66% price now 33.90 then 22.86 but split 2x & now own triple amount. based on original paid price yield is 14%
Exxon 3.88 % today blah...blah ..blah 28%
IBM 3.95% today total yield over the years 18%
Chevron 5.21% today total yield over the year 42%

All dividends re-invested over the years, buying more stock = compound interest.& that friendo is what it's all about.
Power of compound interest.

Here are some current bonds I have, which anyone can buy right now, check the yields.......

View attachment 279753

Schools in this country are VERY lacking in teaching the basics of whats needed to survive economically in our world today.
One must look out for one's self to survive.......:wink:
Click to expand...
You have done well with bonds because you personally hold them to maturity. If you like the return you signed up for they are a great income generator.

I assume the average person is not a day trader nor does he or she hold individual stocks, but rather are like most folks and own mutual funds. In this case, bond investments are somewhat different. You rely on the managers of the fund not to do something stupid, and the investors not to do something stupid like dumping their bonds because of a hiccup. In the bond market, bonds are frequently sold above or below their face value depending on market conditions. While interest rates can rise or fall, the return rate on the bond is fixed for a given term. This increases or decreases the value of the bond with respect to cash or stocks. Regardless of the market condition if you own a good bond, you get a quarterly, semiannual or annual interest payment. If you are in a bond fund, if the manager does not have to sell his bonds to pay for folks leaving the fund, the rate of return doesn't change, however folks move around so if there is a perception that bonds are not a good investment at a given time, bonds have to be sold below face value to raise the cash to pay out the departing investor, so the rate of return can be lower than you would expect. On the other hand, when bonds are favorable, the opposite is true, and the rate of return is higher. This makes investing in bond funds more interesting than just holding on to a bond personally.

And bond funds are fine just as long as the investor understands this important difference.

Another very important investment philosophy is to invest in quality and don't listen to the empty heads on the financial shows who analyze the minute by minute changes in the markets. You shouldn't be a day trader if you are managing a retirement fund. Look long term and see what works.

Bob
 
two%20chicks_1.jpg
 
blackjack2564 said:
Here are some current bonds I have, which anyone can buy right now, check the yields.......

View attachment 279753
Click to expand...

Those are not yields but coupon rates. Those bonds sell for over par dropping the yield considerably.

I agree that 5.5% should be easy to get over the long term. (Not easy over the last 3 years through today though) But there is no conservative 5% short-term return choices out there.
 
Bob,,
You see,,
I have this Mutual fund that I need a bit of help managing....lol...

Teddy
 
Here's one guys honest answer as to what he would do with the money if he were to win.

[YOUTUBE]btAbU1sPqIM[/YOUTUBE]
 

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