This and fancy coffees seem to always be the cliche ones. I've always been of the mindset who cares, purchases like this fall into the "noise" spectrum of finance. Many people here are at least in the top 10% of financial prudence, and *anything* that costs less than $100 a year in isolation isn't going to change a thing. If something on it's own comes in at a percent of a percent of your annual income, it's just not a factor. That's why finance ppl suggest tackling big things like housing and cars first. Because saving $50/yr on the lotto isn't even the same sport as downsizing a $3k mortgage to a $1k rent payment. If you have someone scraping by saving little, *regardless* of what they do with the $50 lotto costs, it will lead to either a good savings rate should they downsize saving 24k/yr, or scraping by should they not.
Pinching pennies like this doesn't hurt of course, but won't change anything. The options are basically a savings rate of 0 (big home + scratchies), 50/yr (big home, no scratchies), or 24k/yr (small home, scratchies) or 24.05k/yr (small home, no scratchies). I'd posit situations 1 and 2 are identical, as are 3 ad 4.
The things you learn on MMM :) ...
QUOTE: If you want to increase your odds (and they'll still suck) buy multiple, overlapping tickets. For example, if you need to pick 6:
* 1, 2, 3, 4, 5, 6
* 2, 3, 4, 5, 6, 7
* 3, 4, 5, 6, 7, 8
etcetera
This means if prizes are handed out for matching 3, 4, 5.... you'll multiple matches of 3, 4, 5. You are still "just as likely" to win the big pot and much more likely to win multiple small pots.
This is also counter intuitive to everyone that plays. They'll want 10 numbers that are all vastly different instead of 10 numbers that overlap
END OF QUOTE
It's fun to imagine - what if??!:) I buy them off and on, usually when things aren't going so well and always a few during the holidays and New Year.
Maybe total investment of $30 to $50max a year.
This is not the case. You are predicating the entire thing on "well if several of the winning numbers fall between 3-6, and then I just vary the other two for numerous combinations, I will win more small prizes". The problem is you are ignoring the probability of "several winning numbers falling between 3-6". It will adjust the variance of payouts, but likely not how much you lose over the long haul.
Here's a thought exercise. Assume you have a typical 6/49 situation, and you "corner" the combos from 1 to 10. You'll have 10*9*8*7*6*5 = 151k tickets, of 49*48*47*46*45*44 = 10b combinations. So you seem to be saying that if all the winning numbers are in the 1-10 range, then in this case you have a 100% chance of winning - which is right, except for the fact that you didn't account for the conditionality of all numbers being in the 1-10 range, which will be 10/49 * 9/48... *5/44 = ~0.00151%.
Here's another fun question that demonstrates the point, up until which number would you need to buy every combo to ensure a 50% chance of winning?
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Most people think it's somewhere near the middle around 25, but in reality it's closer to the 90% range. Its actually solving for 0.50 = n^6 or about 0.89. Or .89*49 (rounding up to nearest whole number) = 44. So 44!/38! = 5.08B, or just over half the 10B combos from 1-49. Excluding only the numbers of 45-49 mean you have an entire 50% fewer combos to worry about. So you have 100% overlap and coverage, of 50% of the landscape. Vs 5b random combos, which would have you 50% coverage, over 100% of the landscape.
Face punches for anyone buying a lottery ticket.
Are you really an actuary? Presumably you don't also want to face punch people buying insurance, despite the fact that it is financially identical to the lottery?
In both cases, you have a huge payout, tied to a pseudo-random event, however the likelihood and costs of that event is almost always going to be significantly lower that the costs charged to the consumer as a premium or wager. The only difference is that in the case of insurance, the random event also has huge negatives costs come with it, so that the windfall more or less exactly offsets it.