If I had a million dollars.........
Nov. 13th, 2003 10:56 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
poltr1Usually, I don't pay any attention to the semi-weekly state lottery, unless the jackpot gets big (over $20 million). Then I'll play, only because I'd kick myself if my numbers came up and I didn't play. But I don't spend a lot of money on it -- maybe $1 or $2 at most. I know that the odds of winning it big are astronomical. Some folks I know refer to the lottery as "A tax on people who are bad at math", or the "Stupidity Tax".
So what are the odds of winning? I'll do the math.
The most common lottery game is Lotto. There is a set of ping-pong balls that have numbers painted on them, inside what looks like a cross between a hot-air popcorn machine and a Bingo cage. Out of this set of balls, several (5 or 6) are drawn at random. If the numbers match the ones you picked on the form, you win big. If you match some of the numbers, you'll win some money, but not as much.
For sake of discussion, let's assume that my state's Lotto game has 48 balls, and 6 are drawn. The odds of any particular ball being drawn the first time are 1 in 48. The odds of any other particular ball being drawn next are 1 in 47. And so on down the line. So, for any specified combination of 6 balls, the odds are 1 in 48 * 47 * 46 * 45 * 44 * 43 * 42 that that combination will come up. Or, for those of you who are familiar with factorials (n! = 1 * 2 * 3 * ... * n), it's 48! / (48-6)!, or 48! / 42!, or 1 in 8,835,488,640.
But wait, there's more! Factor in the permutations, because those balls can be drawn in any order, so long as they match. For one ball "a", there's one possible permutation: "a". For two balls "a" and "b", there are two: "ab" and "ba". For three balls, there are six: "abc", "acb", "bac", "bca", "cab", "cba". And so on. Again, the number of permutations can be described with factorials. So, for 6 balls drawn, there are 1 * 2 * 3 * 4 * 5 * 6 permutations, or 720 permutations, or 6! permutations.
So, dividing the number of comnbinations by the number of permutations, we have (48 * 47 * 46 * 45 * 44 * 43 * 42) / (1 * 2 * 3 * 4 * 5 * 6), which comes out to 12,271,512. Since most states that do Lotto offer two chances for $1, the odds of winning are doubled, but only if you play a second combination of numbers. That raises (or lowers) the odds to 1 in 6,135,756. Big whoop. Odds are: You'll laugh! You'll cry! You'll kiss three bucks goodbye!
As for winning smaller sums of money by matching 5 balls, 4 balls, or less, I didn't get that far with the math.
Here's the formula: b is the number of balls in the hopper, d is the number of balls drawn, and p is the number of plays per ticket. (b! / (b-d)!) / d!) / p
And if I was fortunate enough to win, say, a million dollars, would I go for the lump sum or installments? And how would I spend it?
I'd pick 10 annual payments of $100,000 each. (Let's assume this is what's left after Uncle Sam gets his cut.) While I'd be tempted to take the lump sum, I'd be afraid that I'd spend it all too quickly. And I have heard stories of lottery winners who declared bankruptcy years after their big winfall because they didn't manage their money properly.
The first year, I'd pay off the credit cards, pay double on my mortgage (and build up some equity), spend about $5000 on CDs and DVDs I want, buy about $10000 on musical electronic gear (Kurzweil, you're mine!), and rent some office space for the much-needed cleanup and go-through work I need to do. I wouldn't quit my job since I still need health benefits, but I'd scale back to part-time work (no more than 20 hours per week). I'd also donate at least 1% ($1000) to charity. If everyone could donate 1% of their net income to charitable organizations, what a wonderful load of good that would do for people! And I'd start a college fund for my daughter.
The second year, I'd work on paying off any outstanding loans, and the mortgage. Or I may buy a larger house -- one with a basement, a room we could use as a library, and a den. How about a new vehicle -- like a Hummer H2 or a Cadillac Escalade? Naah. No fancy or flashy cars for me because I don't really need them. I'd get an SUV only if I was hauling around a lot of gear, or lived in a rural, hilly area.
The third year, we'd probably spend time (and our $100K) traveling to various places in the world.
The fourth year....I don't know. I haven't planned that far ahead. Maybe I'll start a foundation.
So what are the odds of winning? I'll do the math.
The most common lottery game is Lotto. There is a set of ping-pong balls that have numbers painted on them, inside what looks like a cross between a hot-air popcorn machine and a Bingo cage. Out of this set of balls, several (5 or 6) are drawn at random. If the numbers match the ones you picked on the form, you win big. If you match some of the numbers, you'll win some money, but not as much.
For sake of discussion, let's assume that my state's Lotto game has 48 balls, and 6 are drawn. The odds of any particular ball being drawn the first time are 1 in 48. The odds of any other particular ball being drawn next are 1 in 47. And so on down the line. So, for any specified combination of 6 balls, the odds are 1 in 48 * 47 * 46 * 45 * 44 * 43 * 42 that that combination will come up. Or, for those of you who are familiar with factorials (n! = 1 * 2 * 3 * ... * n), it's 48! / (48-6)!, or 48! / 42!, or 1 in 8,835,488,640.
But wait, there's more! Factor in the permutations, because those balls can be drawn in any order, so long as they match. For one ball "a", there's one possible permutation: "a". For two balls "a" and "b", there are two: "ab" and "ba". For three balls, there are six: "abc", "acb", "bac", "bca", "cab", "cba". And so on. Again, the number of permutations can be described with factorials. So, for 6 balls drawn, there are 1 * 2 * 3 * 4 * 5 * 6 permutations, or 720 permutations, or 6! permutations.
So, dividing the number of comnbinations by the number of permutations, we have (48 * 47 * 46 * 45 * 44 * 43 * 42) / (1 * 2 * 3 * 4 * 5 * 6), which comes out to 12,271,512. Since most states that do Lotto offer two chances for $1, the odds of winning are doubled, but only if you play a second combination of numbers. That raises (or lowers) the odds to 1 in 6,135,756. Big whoop. Odds are: You'll laugh! You'll cry! You'll kiss three bucks goodbye!
As for winning smaller sums of money by matching 5 balls, 4 balls, or less, I didn't get that far with the math.
Here's the formula: b is the number of balls in the hopper, d is the number of balls drawn, and p is the number of plays per ticket. (b! / (b-d)!) / d!) / p
And if I was fortunate enough to win, say, a million dollars, would I go for the lump sum or installments? And how would I spend it?
I'd pick 10 annual payments of $100,000 each. (Let's assume this is what's left after Uncle Sam gets his cut.) While I'd be tempted to take the lump sum, I'd be afraid that I'd spend it all too quickly. And I have heard stories of lottery winners who declared bankruptcy years after their big winfall because they didn't manage their money properly.
The first year, I'd pay off the credit cards, pay double on my mortgage (and build up some equity), spend about $5000 on CDs and DVDs I want, buy about $10000 on musical electronic gear (Kurzweil, you're mine!), and rent some office space for the much-needed cleanup and go-through work I need to do. I wouldn't quit my job since I still need health benefits, but I'd scale back to part-time work (no more than 20 hours per week). I'd also donate at least 1% ($1000) to charity. If everyone could donate 1% of their net income to charitable organizations, what a wonderful load of good that would do for people! And I'd start a college fund for my daughter.
The second year, I'd work on paying off any outstanding loans, and the mortgage. Or I may buy a larger house -- one with a basement, a room we could use as a library, and a den. How about a new vehicle -- like a Hummer H2 or a Cadillac Escalade? Naah. No fancy or flashy cars for me because I don't really need them. I'd get an SUV only if I was hauling around a lot of gear, or lived in a rural, hilly area.
The third year, we'd probably spend time (and our $100K) traveling to various places in the world.
The fourth year....I don't know. I haven't planned that far ahead. Maybe I'll start a foundation.
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moola
Date: 2003-11-15 11:41 am (UTC)I would invest some of the money into my company but would step back from the day to day ops. I enjoy the work and would spend the money on ways to make more money like buying stuff at auctions or ebay.
Definitely travel, staff some out of town weekends(like Indiannapolis), maybe do some leader trainings, buy my wife a nice diamond ring, lease my wife an audi allroad, and work my mission.