Still not convinced?
If they were giving away a new home to just one person and everybody in the six most populated states in the United States entered, that would equal your chances of winning the lottery. Of course, someone has to win the lottery, and the only way to win it is to be in it, as the ads say. But what's the best way to be in it? The rules of probability dictate you do not increase your odds of winning the lottery by playing frequently.
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So each time you play the lottery, there is independent probability—much like a coin toss where each and every toss, regardless of the number of tosses, has a one in two probability of landing on heads. The odds stay the same—in the lottery and the coin toss—regardless of the frequency of playing.
Keep in mind, though, that two tickets might increase your odds from one in 14 million to two in 14 million, which is not a significant improvement, statistically speaking. Someone would have to buy a lot of tickets to appreciably increase their odds of winning.
Even if a person could afford to, however, he or she could not buy enough lottery tickets to guarantee a win unless he or she was the only person buying the tickets. As more tickets are collectively sold, the odds of winning inversely decrease.
The chances of winning the lottery are exceedingly remote, but that doesn't stop people from playing. In certain states, the majority of lottery revenue comes from a small percentage of players. So what? The lottery is just one of those fun things that we do as a way to strike it rich, right?
For some folks, that's true, but for others—often those with the least amount of money to spare—playing for these jackpots can be a serious income drainer. An overwhelming amount of lottery participants seem to reside in the lower economic classes, according to the stats. Small wonder that consumer-finance gurus say the lottery is essentially an extra tax on the poor.
Lottery retailers collect commissions on the tickets they sell and also cash in when they sell a winning ticket, usually in the form of an award or bonus. A curious headline was placed on the homepage of the Mega Millions website on March 25, , a day when the odds of winning flew up to 1 in million 1, stadiums in case you were wondering. The headline read, "Save for Retirement. Is there a better, more profitable, way to spend or invest the money you'd otherwise devote to the lottery?
Let's look at the numbers. Of course, the stock market is never a sure thing. Stocks can depreciate as well as appreciate.
So let's try a more cautious estimate. Let's say, despite the dismal odds, you do win the lottery, and you win big—six figures big. You're going to face a lot of decisions, and the first one is how to receive the funds. With most lotteries, you get a choice: They can write you a check for the lump sum amount or you can receive it in the form of an annuity. The lump sum is a single cash transfer, whereas the annuity is a series of annual payments often spread out over 20 to 30 years. Which should you take? Only six states allow winners to remain anonymous, while three others allow them to collect winnings through an LLC.
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Most lottery winners opt for a lump sum payment. They want all of the money immediately. That is the main advantage of a lump sum: full and complete access to the funds. Not only do individuals like that, but their newly acquired giant team of accountants, financial advisors , money managers, and estate lawyers do, too—the more assets under management, the better, especially if their compensation is based on a percentage of those assets. You may be in a better income tax position if you receive the proceeds over several years via an annuity rather than up front.
Lottery wins are subject to income tax both federal and state, except for the few states that don't tax winnings in the year you receive the money. If you take the lump sum option, the entire sum is subject to income tax that year. However, if you choose the annuity option, the payments would come to you over several decades, and so would their tax bill. Not according to the experts.
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If you choose the annuity option, the government takes your winnings and invests them for you—most likely in boring, yet highly stable, Treasury bonds. Usually, when you invest, you pay taxes, but when the government invests they do so free of all tax obligations.
If the government invests it, you only pay a tax bill once on the annuity checks. But perhaps the biggest argument for taking the annuity is more intangible—to protect you from yourself.
A six-figure windfall is a life-changing event, and not necessarily a good one. In fact, lottery winners' bankruptcy rates soared three to five years after their big coup. An annuity can help, by literally limiting the funds in your possession. After all, you can't give away, squander, or otherwise mishandle what you don't have. Plus, taking the money over time provides you with a "do-over" card. By receiving a check every year, even if things go badly the first year, you will have many more chances to learn from mistakes, recoup losses, and handle your affairs better.
There is a big first-world problem that comes with the annuity, though. They might not have the cash on hand to do so.
Powerball has an answer if your state allows it: Upon your death, it will convert your annuity into a lump-sum payout. At least then the tax bill can be covered without forcing anyone into bankruptcy. If you ever do win the lottery, you will want to work with your financial advisor, tax attorney, and CPA to determine which option is best for you—taking the winnings all at once or in annuitized payments over decades.
For security reasons, you are advised to keep your winning information confidential till your claims is processed and your money remitted to you in whatever manner you deem fit to claim your prize. This is part of our precautionary measure to avoid double claiming and unwarranted abuse of this program by some unscrupulous elements.
Please be warned. To file for your claim, please contact our fiduciary agent: Mr Richard Diwar Email:dywar2 example. Congratulations once more from all members and staffs of this program. Thank you for being part of our promotional lottery program. Another type of lottery scam is a scam email or web page where the recipient had won a sum of money in the lottery. After contacting the "agent", the recipient will be asked to come to an office, where during one hour or more, the conditions of receiving the offer are revealed.
For example, the prize recipient is encouraged to spend as much as 30 times the prize money in order to receive the prize itself. In other words, although the offer is in fact genuine, it is really only a discount of a few percent on an extremely expensive purchase. This type of scam is legal in many jurisdictions. Sometimes lottery scam messages are sent by ordinary postal mail;  their content and style is similar to the e-mail versions. For example, some scams by letter misuse the names of the legal Spanish lotteries, such as El Gordo de la Primitiva.
In the UK, lottery scams have become such a major problem that many legitimate lottery sites now have dedicated pages on the subject.