Author Topic: So I've decided to win the lottery ... [yahoo finance article]  (Read 1571 times)

MoMan

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https://finance.yahoo.com/news/ridiculous-retirement-solution-nearly-60-104800663.html
According to this clickbait article [hey, it worked!] on Yahoo finance:

Quote
But rather than work around these limitations and develop long-term savings plans that allow them to build wealth for retirement, millennials have come up with what they think is a better idea: winning the lottery and using that cash to fund their golden years. In fact, nearly 60% of millennials think that playing the lottery is a reasonable plan when it comes to producing retirement savings, according to investing app STASH.

Apologies for the continued millenial bashing. To help counter that trend, one of my millenial co-workers asked me for some advice about what to do with a small, unexpected windfall, explaining to me that the money is just sitting in his bank account and he didn't really need it. Pretty sure he saw my eyes and face light up with excitement as I told him about opening an account at Vanguard. Later I directed him to read the Stock Series on JL Collins. Note that he and his wife just welcomed their THIRD child (wait ... I thought it was IMPOSSIBLE to save anything these days never mind when raising multiple children!).

Rock on Mr. Millenial Mustache! We'll be seeing you in the millionaires club in no time.

carolinap

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #1 on: April 18, 2019, 10:41:07 AM »
Blaming millenials, as if this behavior wasn't around for ages

Stimpy

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #2 on: April 18, 2019, 11:25:09 AM »
1st  it's yahoo, that's all click bait (unless it's ads... and even then it's probably click bait)
2nd. I do hope they keep blaming millennials for all the things wrong with the world... Makes me feel like I am doing something right! (as a Millennial, that is!)
3rd. given what some people have spent on college, I suspect winning the lottery IS what will let them retire.  But that's just my opinion. 

But yea, I am aware of people (no millennials though) whom use that as their retirement plan.  Gotta start some where right?  (Ok Not here but.....)

YttriumNitrate

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #3 on: April 18, 2019, 12:15:56 PM »
Winning the lottery is a good strategy, if you're this guy:
https://www.businessinsider.com/how-one-guy-won-the-lottery-14-times-2016-1

I grew up in Virginia and remember when his group bought all (or almost all) the possible combinations.

talltexan

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #4 on: April 18, 2019, 12:26:54 PM »
I ran the lottery pool in the office a couple weeks ago.

It did occur to me that I could claim I was buying tickets, but really buy into a savings account, and then just give everyone their money back at the end. I think doing that would have severely hurt my reputation.

So *instead* I bought one ticket per person, where two tix per person had been normal in previous rounds. Saved everyone 50% of their money, basically.

Maenad

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #5 on: April 18, 2019, 01:53:42 PM »
The article is meaningless without the comparison to other generations. How many baby boomers and Gen-Xers thought the same at similar ages?

jinga nation

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #6 on: April 18, 2019, 03:40:19 PM »
I ran the lottery pool in the office a couple weeks ago.

It did occur to me that I could claim I was buying tickets, but really buy into a savings account, and then just give everyone their money back at the end. I think doing that would have severely hurt my reputation.

So *instead* I bought one ticket per person, where two tix per person had been normal in previous rounds. Saved everyone 50% of their money, basically.
This happened in my workplace. All 20 except myself and the ticket buyer were not OK with it. They accused the ticket buyer of decreasing their winning chances by 50%. I told them sure, you had an almost zero chance of winning if 2 tix/person, and the same if 1 tix/person. They didn't get the math. Probabilities meant nothing to my ex-coworkers in the IT field.

Ann

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #7 on: April 18, 2019, 03:54:13 PM »
I ran the lottery pool in the office a couple weeks ago.

It did occur to me that I could claim I was buying tickets, but really buy into a savings account, and then just give everyone their money back at the end. I think doing that would have severely hurt my reputation.

So *instead* I bought one ticket per person, where two tix per person had been normal in previous rounds. Saved everyone 50% of their money, basically.
This happened in my workplace. All 20 except myself and the ticket buyer were not OK with it. They accused the ticket buyer of decreasing their winning chances by 50%. I told them sure, you had an almost zero chance of winning if 2 tix/person, and the same if 1 tix/person. They didn't get the math. Probabilities meant nothing to my ex-coworkers in the IT field.

Would someone please explain this to me?  If I gave a coworker $10 to buy two boxes of her daughterís Girl Scout cookies and she only gave me one box, how is that not different?  Sure, my coworker could claim that actually I was saved from calories and refined sugar, but if she believed that why would she offer to sell Girl Scout cookies in the first place?

I know I have to be understanding this incorrectly.  Iíve never been a part of a lottery pool and no one at work has ever even suggested this.

How are you saving them money? Do they get money returned to them?

jinga nation

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #8 on: April 19, 2019, 07:53:43 AM »
I ran the lottery pool in the office a couple weeks ago.

It did occur to me that I could claim I was buying tickets, but really buy into a savings account, and then just give everyone their money back at the end. I think doing that would have severely hurt my reputation.

So *instead* I bought one ticket per person, where two tix per person had been normal in previous rounds. Saved everyone 50% of their money, basically.
This happened in my workplace. All 20 except myself and the ticket buyer were not OK with it. They accused the ticket buyer of decreasing their winning chances by 50%. I told them sure, you had an almost zero chance of winning if 2 tix/person, and the same if 1 tix/person. They didn't get the math. Probabilities meant nothing to my ex-coworkers in the IT field.

Would someone please explain this to me?  If I gave a coworker $10 to buy two boxes of her daughterís Girl Scout cookies and she only gave me one box, how is that not different?  Sure, my coworker could claim that actually I was saved from calories and refined sugar, but if she believed that why would she offer to sell Girl Scout cookies in the first place?

I know I have to be understanding this incorrectly.  Iíve never been a part of a lottery pool and no one at work has ever even suggested this.

How are you saving them money? Do they get money returned to them?
To understand, one must participate. Then your mind will understand the lack of logic in this "game".

Villanelle

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #9 on: April 19, 2019, 01:49:59 PM »
I ran the lottery pool in the office a couple weeks ago.

It did occur to me that I could claim I was buying tickets, but really buy into a savings account, and then just give everyone their money back at the end. I think doing that would have severely hurt my reputation.

So *instead* I bought one ticket per person, where two tix per person had been normal in previous rounds. Saved everyone 50% of their money, basically.
This happened in my workplace. All 20 except myself and the ticket buyer were not OK with it. They accused the ticket buyer of decreasing their winning chances by 50%. I told them sure, you had an almost zero chance of winning if 2 tix/person, and the same if 1 tix/person. They didn't get the math. Probabilities meant nothing to my ex-coworkers in the IT field.

Would someone please explain this to me?  If I gave a coworker $10 to buy two boxes of her daughterís Girl Scout cookies and she only gave me one box, how is that not different?  Sure, my coworker could claim that actually I was saved from calories and refined sugar, but if she believed that why would she offer to sell Girl Scout cookies in the first place?

I know I have to be understanding this incorrectly.  Iíve never been a part of a lottery pool and no one at work has ever even suggested this.

How are you saving them money? Do they get money returned to them?

This.  I am not a lottery player, but if someone changed the rules on their own, I'd be pissed (or at least annoyed), even if they later gave me the money back. (And I might also be suspicious that they did buy more tickets and one was a modest winner and they wanted to keep it for themselves.)  If they announced it up front ("I'm in charge of the pool this week and instead of the usual $2 buy-in, I'm going to do $1 instead), I'd have no issues at all.  But if it was done after collecting the usual amount and then the money was given back (especially if it was given back after the drawing), that would feel deceptive.

Sure, it's a stupid waste of money, but someone else being deceitful in order to protect others from doing something stupid?  Not okay in my book.

Bloop Bloop

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #10 on: April 19, 2019, 03:46:03 PM »
Considering how much lottery money goes back to the state in the form of taxes, we should be encouraging more people to play the lottery.

exterous

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #11 on: April 20, 2019, 06:00:39 AM »
I'll admit I used to play the lottery. I worked for an R&D and manufacturing company of about 100 people. 50 people were involved in the company lottery pool including the CEO, COO, several researchers, half the engineers and most of the factory floor. So I figured I would join.  While the chances of the group winning was small I viewed it as cheap insurance for losing my job when the company folded if they ended up winning

Raenia

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #12 on: April 20, 2019, 06:11:25 AM »
I'll admit I used to play the lottery. I worked for an R&D and manufacturing company of about 100 people. 50 people were involved in the company lottery pool including the CEO, COO, several researchers, half the engineers and most of the factory floor. So I figured I would join.  While the chances of the group winning was small I viewed it as cheap insurance for losing my job when the company folded if they ended up winning

I used to do this too, when my workplace had a pool that included all the lab staff and half the office staff.  Everyone felt pressured to join, because they didn't want to be left holding the bag if they actually won, against all odds.  It was only a dollar a week, and the pool only lasted a few months, so it wasn't that expensive.

YttriumNitrate

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #13 on: April 20, 2019, 07:57:23 AM »
Considering how much lottery money goes back to the state in the form of taxes, we should be encouraging more people to play the lottery.
Yes, but the external costs and disproportionate spending by the poor works against heavily pushing it.

In a similar vein, smokers have lower lifetime medical costs, so in theory we should be encouraging everyone to smoke, but I doubt that will happen any time soon.

maizeman

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #14 on: April 20, 2019, 08:46:24 AM »
Americans spend about $70B/year on lotteries. That's about $560/household. The lowest quintile of households (those with total household incomes of less than $21,000/year) are estimated pay approx. $1000 into the lottery each year.

So the bottom 20% of households, which earn only 3.1% of total annual income, are paying 36% of the lottery "tax."

Frankly, if our government needs more money* I think I'm in a much better position to pay a bit more through a progressive income tax than a household earning less than $21,000/year. Particularly since the people in those poor households spending four figures a year on the lottery are also presumably innumerate (mathematically illiterate).

*And honestly, it appears that it does, but that's a debate for another thread.

scottish

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #15 on: April 20, 2019, 02:34:09 PM »
I usually think of lotteries as a tax on people who don't do math very well.

But once in a while lotteries pay off disproportionately well.    I think this occurs when they are constructed by people who don't do math very well.

https://www.inc.com/bill-murphy-jr/this-couple-found-a-math-error-in-lottery-made-27-million-playing-over-over-for-55-weeks.html

Bloop Bloop

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #16 on: April 20, 2019, 06:14:51 PM »
Americans spend about $70B/year on lotteries. That's about $560/household. The lowest quintile of households (those with total household incomes of less than $21,000/year) are estimated pay approx. $1000 into the lottery each year.

So the bottom 20% of households, which earn only 3.1% of total annual income, are paying 36% of the lottery "tax."

Frankly, if our government needs more money* I think I'm in a much better position to pay a bit more through a progressive income tax than a household earning less than $21,000/year. Particularly since the people in those poor households spending four figures a year on the lottery are also presumably innumerate (mathematically illiterate).

*And honestly, it appears that it does, but that's a debate for another thread.

I'd rather stupid people pay more tax.

Playing the lottery is stupid.

Ergo...

I'd rather not bail out families (rich or poor) for incredibly bad decisions. There are many legitimate reasons, e.g. ill health, carer's responsibilities, to be financially struggling. Playing the lottery is not one of them.

maizeman

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #17 on: April 20, 2019, 07:14:58 PM »
I'd rather not bail out families (rich or poor) for incredibly bad decisions. There are many legitimate reasons, e.g. ill health, carer's responsibilities, to be financially struggling. Playing the lottery is not one of them.

Ah you seem to be confusing correlation with causation here. Poor families aren't poor because they play the lottery. Many people are bad a math/probability/financial reasoning. These people are both likely to be quite poor and also likely to be sucked in by the lottery to the point of putting a significant percentage of their limiting income into playing.

Also to me there is a moral distinction between bailing out a family for a bad decision they make on their and, as a society, choosing with knowledge aforethought to put temptation in the path of those least equipped to resist its call for our own personal benefit (since the more poor and innumerate folks people spend on the lottery the less tax needs to be raised from us more affluent and hopefully intelligent folks).

I'd rather stupid people pay more tax.

I'm afraid I disagree. While I'm all in favor of having a system of consequences for people who have the capacity to make good choices but choose not to. In that case, consequences help encourage good behavior.

Where our thinking apparently diverges is on two points. 1) I don't think think being genuinely intellectually challenged (or just intellectually below the median, as half of us are) is a moral failing. 2) I also don't think punishing those who struggle with math and probability is going to make them chose to be better at math and probability. I don't think they made a choice to be bad at it in the first place.
« Last Edit: April 20, 2019, 08:21:28 PM by maizeman »

Bloop Bloop

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #18 on: April 20, 2019, 07:27:58 PM »
Maizeman, I accept all your points as being valid. Your reasoning is sound and well-phrased. The fact that I disagree with you probably redounds to my discredit and not yours.

partdopy

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #19 on: April 22, 2019, 09:38:18 AM »
Americans spend about $70B/year on lotteries. That's about $560/household. The lowest quintile of households (those with total household incomes of less than $21,000/year) are estimated pay approx. $1000 into the lottery each year.

So the bottom 20% of households, which earn only 3.1% of total annual income, are paying 36% of the lottery "tax."

Frankly, if our government needs more money* I think I'm in a much better position to pay a bit more through a progressive income tax than a household earning less than $21,000/year. Particularly since the people in those poor households spending four figures a year on the lottery are also presumably innumerate (mathematically illiterate).

*And honestly, it appears that it does, but that's a debate for another thread.

I believe you are free to donate to the US government at any time.  No reason to make those around you pay more taxes instead.

maizeman

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #20 on: April 22, 2019, 10:27:23 AM »
I believe you are free to donate to the US government at any time.  No reason to make those around you pay more taxes instead.

For things where you can exclude your neighbors from benefiting from the investments you make, the private sector is much more efficient.

That means that (useful) government services are public goods, like roads, and an educated workforce, and national defense. With public goods it is impossible to exclude some people from benefiting if they don't want to pay for them.

The unfortunate result is that people cannot opt in or opt out of paying for individual services. They can certainly vote for politicians who want to cut both spending and taxation, and if those politicians win, taxes (and public goods) go down for everyone. If those politicians lose, taxes (and goods) increase for everyone.

In other words, I'm sorry but we're all stuck in this together. One way or another.

Gondolin

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Re: So I've decided to win the lottery ... [yahoo finance article]
« Reply #21 on: April 22, 2019, 11:01:06 AM »
Quote
The article is meaningless without the comparison to other generations. How many baby boomers and Gen-Xers thought the same at similar ages?

Beyond that:
1) What has STASH done to ensure that users are answering honestly?
2) How does STASH know that users are using their real ages?
3) What indication is there that STASH poll results are applicable to the general population?