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Dang, the new mega millions jackpot is 1.6 billion dollars. That’s insane! Ok, lets be real. I know that I shouldn’t play the lottery. I know it’s basically a poor tax, and I know that my odds of winning are minuscule. And by minuscule, I mean it’s nearly impossible. But still, 1.6 billion…
Why I’ll play the lottery
I’m not going to lie. I’m going to play the lottery. In fact, I played on Friday when the jackpot was a mere 990 million. So, if I know that my chances of winning are slim to none, why do I still play?
Well that’s easy! I’m not spending two bucks on a ticket because I know I’m going to win – I’m fairly certain I’m not. I’m spending two bucks for hours of entertainment. The fun in playing the lottery isn’t winning because we all know that’s not going to happen (though wouldn’t it be awesome?). The fun in playing is imagining what you would do if you did win! It’s cheaper than a movie ticket, and I get way more entertainment out of it!
Should you play the lottery?
Not everyone should play the lottery. If you are playing because you really think you’re going to win, you probably shouldn’t be playing. If you spend more than two bucks per person on tickets to “increase your odds of winning”, you probably shouldn’t be playing. And if that two bucks per person is money you need for something else, guess what? You probably shouldn’t be playing.
I’d also say that you probably shouldn’t be spending two bucks twice a week every week on lottery tickets. That’s $192 per year, which doesn’t sound like much, but if you invest that money instead you would have about $18000 after thirty years (assuming 7% return).
The bottom line is that if winning the lottery is your retirement plan, or playing the lottery is breaking the budget, you probably shouldn’t be playing. However, it is fun to play the lottery every now and again, just for enjoyment of imagining what you’d do if you won.
If I won the lottery
We’ve all thought about it, right? The first thing I’d do if I won is pay off all of my debt, even the stuff that I’m just cosigned on. It would feel great to be free of all that nonsense! Next, I would write a list of the people I’d like to help, and gift them all something (obviously taking the tax obligations into consideration!). I don’t want to be mean, but I would not help anyone who isn’t on my list. Most lottery winners lose all of their winnings within five years, and a big portion of that is because distant relatives and old “friends” come out of the woodwork asking for loans. Sorry, but if you aren’t on my list, you aren’t getting squat!
Next, I would fully fund all my bank accounts. There is nothing wrong with having cash on hand! Then I would treat myself to a trip. I’d take an extravagant (for me, I don’t need any gold-plated toilets or private planes!) trip to Egypt to see the pyramids and the Valley of the Kings. But after that, I’d put the rest of the money in various investment vehicles. Id set up a trust for my future kids, niece, and nephew, and have a super diversified portfolio. I don’t even think I’d quit my job right away (even though I love to talk about it haha).
What would you do?
Are you playing this week’s huge mega millions lottery? If so, what would you do if you won? Sharing our ideas is part of the fun, isn’t it?
Melanie launched Partners in Fire in 2017 to document her quest for financial independence with a mix of finance, fun, and solving the world’s problems. She’s self educated in personal finance and passionate about fighting systematic problems that prevent others from achieving their own financial goals. She also loves travel, anthropology, gaming and her cats.