advertisement
LINCOLN, Neb. (AP) -- After fleeing the war-torn Republic of Congo, Alain Maboussou found work at a Nebraska meatpacking plant. Now he plans to quit that job and return to school after winning part of a record $365 million Powerball jackpot, one of the biggest lottery jackpots in U.S. history.
News like that warms our hearts, loosens our purse strings and unleashes our fantasies. What couldn't we do with part of $365 million, we ask ourselves as we loiter by the Slurpee machine clutching a hard-earned dollar.
Would one more ticket improve our odds?
Is there a better set of numbers to play?
Why do hotel maids and ditch-diggers always seem to win?
The lottery and you: a true/false quiz
Maids and ditch-diggers always seem to winA: False. Consider already-affluent Jack Whitaker of West Virginia, who won a $314.9 million Powerball jackpot -- still the largest single U.S. lottery payoff -- on Christmas Day 2002. In fact, lottery officials in several states say big jackpots tend to bring out a more affluent crowd.
But studies show that the heaviest lottery players -- the 20% of players who contribute 82% of lottery revenue -- disproportionately are low-income, minority men who have less than a college education. That has fueled a vociferous anti-lottery movement. "It really is government undercutting what government's role should be," which is encouraging people in financial straits to be responsible with their money, says Tom Grey of the National Coalition Against Legalized Gambling.
About one-half of American adults spend $45 billion annually on some 35,000 lottery games in 40 states, plus the District of Columbia, Puerto Rico and the U.S. Virgin Islands. It's not news when someone earning $7 an hour scrubbing toilets parts with a buck for a ticket -- but it's news if she wins.
You've got to play a lot to win
A: False. While it's true that Mega Millions winner Williams regularly played games of chance – she won $1,000 at the Foxwoods Casino two weeks before her big win -- spending lots of money doesn't always do much for your chances. For instance, the odds of winning the Mega Millions are 1 in 135,145,920. Buying two tickets bumps your odds only to 2 in 135,145,920.
Of course, you have to buy a ticket to win. The average player nationwide spends $150 a year, according to the 1998 National Survey on Gambling. Some states have averages several times higher than that.
More from MSN Money
A lottery ticket is your best shot at riches
A: False. Sadly, this isn't the no-brainer that it should be.
In a 1999 survey by the Consumer Federation of America and financial services firm Primerica, 40% of Americans with incomes between $25,000 and $35,000 -- and nearly one-half of respondents with an income of $15,000 to $25,000 -- thought winning the lottery would give them their retirement nest egg. Overall, 27% of respondents said that their best chance to gain $500,000 in their lifetime is via a sweepstakes or lottery win, the survey said.
Consider this: If you take that $150 a year and put it into a 401(k) or IRA at age 30, you'll have $28,000 by age 65, assuming a reasonable 8% rate of return, says Jim Holtzman, an accountant and certified financial planner with Legend Financial Advisors, in Pittsburgh. That figure doesn't even consider the added boost of contributing to a plan in which a company matches contributions. (See "Start investing with just $100.")
To save that $500,000 nest egg, you'd have to tuck away a little less than $100 a month starting at age 21. What's more likely: that you can find an extra $100 a month -- or that the 1-in-several-million odds of even the smallest seven-figure jackpot suddenly tilt in your favor?
Continued: How to play smarter
Rate this Article
High
