Powerball Jackpot Increases to $1.5 Billion

[Eugene]

Source: ABC News

Powerball Jackpot Increases to $1.5 Billion

By AVIANNE TAN
Jan 12, 2016, 11:10 AM ET

The Powerball lottery jackpot has now increased to $1.5 billion from $1.4 billion, according to Texas lottery officials. The jackpot could grow even more before Wednesday's drawing.

The cash value is $930 million (before taxes).

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Read more: http://abcnews.go.com/US/powerball-jackpot-increases-15-billion/story?id=36236735

[joeybee12]

1. I hope it goes higher so the check they hand me...

Is for at least $1 billion.

[SheilaT]

2. It would have to go to over $2B, and you'd have to have the only winning ticket.

Someone who takes the immediate payout generally gets about 40% of the jackpot.

A whole lot more if you take the 30 year payout.

[joeybee12]

3. That works for me!

Sure, let it go up to $2 billion!

[Snobblevitch]

42. The cash payout is always over 50% of the announced jackpot, but less than 60%

[A HERETIC I AM]

49. Not always

It's directly tied to the treasury yield curve.

Back before 2007 when the coupon rate of the 30 year was above 4% the cash option was consistently less than 50%

[Snobblevitch]

50. Ok, you got me.

But I am sure it gas not been as low as 40% of the jackpot.

The highest return is to take the cash option. Many years ago, I read about a multimillion doller lottery jackpot winner who spent all of his first year annuity of several hundred thousand dollars and ended up working at McDonald's until his next big check came.

[A HERETIC I AM]

53. Wasn't trying to "get" you, merely clearing up a misconception

As far as it not having been as low as 40%, again, it depends on the yield curve

You and most people are probably aware that if you take the payments what you are getting is an annuity stream. Technically what the Powerball people do is buy an "Immediate, Period Certain Annuity with a 4% annual step up with a return of principal provision"

All of the investments are either US Treasury bonds or Government backed securities like Ginnie Mae and Fannie Mae bonds and the annuity is structured so that the account is zeroed out with the last payment, 29 years from now.

The insurance company who wins the bid and structures the annuity will buy bonds with maturities ranging from 12 months all the way out to 29 years

[Snobblevitch]

54. Ok,

the cash option was a good option for the jackpot winners.

I have a broker. We don't have a huge portfofio, but I wonder exactly how close to a billion dollars are added to an account. Does it all get added to a nearly no interest money market account? Even a day or two would cost several million dollars. The longer a winner waits to collect the jackpot is money lost. The numbers are staggering.

[A HERETIC I AM]

56. It is indeed staggering

Their website is not clear on how they hold the funds until disbursement but I'll bet they keep any interest for the next pot.

The actual amount of the jackpot isn't announced until the winner collects.

[yellowcanine]

8. The check would not be for $1 billion anyway. Taxes would come out first.

Unless you mean $ 1 billion after taxes. That probably won't happen unless no one wins on Wednesday. And the chances of multiple winners keep going up as more tickets are sold each time.

[joeybee12]

10. I think for show they hand you a big check solely as the lump sum...

Which, if it's 1.5 billion, would be over $1 billion lump sum...but the real check would be less than $1 billion once they take out the taxes.

[SheilaT]

14. I believe the giant check they show is

the amount after taxes.

Of course, if you take the thirty year pay out you end up with considerably more money.

[joeybee12]

16. Well, when I win, we'll know for sure!

[Goblinmonger]

18. You don't end up with more money if you take the payout.

OK, you end up with a bigger number, but you will have less money in the long run. Investing most of that money in a modest mutual fund will generate more money for you over time than taking their payout. Which makes sense because they are investing the money, taking your portion out of the earnings each year and keeping quite a bit of it.

[yellowcanine]

19. Yes and after 30 years the annuity has decreased a lot in real $ because of inflation.

The only way to beat the loss from inflation is by taking the cash payment and investing it.
Of course you can invest the annuity payments also but you have way more to invest now with the cash payment and therefore a much greater return over 30 years.

[BeyondGeography]

4. And the odds remain 282 million-to-one

Not that I won't play, of course.

[alphafemale]

55. Yes I bought one ticket. Kind of snickered at people buying ten.

I would take the payout because I think the money could be invested to beat that over 30 years.

As if this is happening.

[NightWatcher]

5. How would you respond to winning that much?

Seriously, how does your brain and body react after you match the numbers and realize you've won?

Do you shit your pants, have a heart attack, and die or bounce around like a Loony Tune character?

Can your body go into shock for something like that?

I'm willing to document my reaction when I when for those who are curious.

[closeupready]

7. I'll bet it's very stressful, but it's a GOOD kind of stress, IMO.

[yellowcanine]

9. I think my first reaction would be disbelief followed by carefully checking the ticket 5 or 6 times

But I am debating whether I really would want to win $1 billion dollars. Seriously, it would change my life in a way I am not sure I want it to change right now. Ah dang I will probably man up and buy a ticket and take my chances.

[NightWatcher]

12. I could handle a couple million without a major life change

But a billion?
You've got to hire security for your family to make sure no one is kidnapped for ransome or held up for extortion from people in your past, secure your information, hire a financial and legal staff...and experts to make sure they're not screwing you.

You've got a new full time job, managing your billion. There are no days off from now on.

[Hassin Bin Sober]

13. Where would you even cash that check.

I bank with Citibank . I would be afraid to leave it even one day in that zombie bank. They go under and I only get $250k.

Goldman Sachs is probably safer. They own the government.

Buy office buildings and shopping malls I guess.

[yellowcanine]

22. If you can stay anonymous it would help

Delaware, Kansas, Maryland, North Dakota, Ohio and South Carolina allow you to stay anonymous which would help with the old friends, distant relatives, perfect strangers, criminals and scammers. Of course with that kind of money it would be hard to hide it from close friends and family. So you would have to work something out which is where the financial planners and lawyers would come in. Who do you tell and how much do you tell? Personally I would swear my immediate family to secrecy on just how much money and for neighbors, friends etc I would be a lot more circumspect - kind of a need to know basis. I would attempt to have a semblance of normalcy in relation to my previous live - keep the standard of living similar etc. Maybe do a little more traveling etc. But no fancy cars and houses. And do any giving of large sums anonymously or through a foundation.

[KansDem]

26. I know of a few foundations I'd donate to...

Children's diseases and birth defects, for example. Personal experience: my brother died at age 13 from a kidney disease (I was 8). I'd donate to such organizations that might have helped him. I'd donate in his name.

Growing up is hard enough without infirmities.

[kestrel91316]

27. Decent car, decent house, decent clothes - then

the same paid for for my sister and BIL, niece/family, and nephew/family.

Then an apartment in Paris, a Victorian home on a farm in the Midwest, both for me. Sell the temporary decent house.

Then the rest of my life spent finding good causes and needy people to give the rest to.

[dixiegrrrrl]

41. There are many many stories/articles about the bad luck winners have had after the lottery

I was reading some yesterday
and one thing I noticed is that for most of the bad luck winners
they were not overly endowed with smarts to start with.
Besides 2 who were proven to be murdered over the money!
my favorite winner is the guy who set out to see how much cocaine and hookers he could get with his money.
About 9 years worth, it turns out.

Which is why the rational advice is to not even claim your winnings until you have acquired the services of a smart investment lawyer

and changed your phone number.

[frizzled]

6. So is it worth it to buy all the tickets up yet?

[jeff47]

28. Yes.

Odds of winning the jackpot are about 1 in 292 million. Since tickets are $2 each, it's "worth it" just for the jackpot as soon as it passes $584 million. But you also have to remember there's a whole lot of lesser prizes, which you'd also win if you literally bought every ticket. So the real "break even" is much lower....and I'm to lazy to calculate it right now.

[frizzled]

29. So just ask your bank manager for a 600 million dollar loan!

[belcffub]

30. plus you could deduct all the non-winning tickets...

not sure where the break even point is but this is well past it...

not to mention buying that many ticket would drive it up further... so the total would be higher then it is now...

of course if two people win then everything goes out the window and your done...

[yawnmaster]

33. at 10 entries per second, it will take about 338 days, 24 hours a day to print all the tickets. eom

[jeff47]

34. So you need to buy the tickets at around 400-1000 locations.

It's not like one person is going to spend ~$600M on lottery tickets....because the rules bar such bulk purchases.

[KamaAina]

40. We can think of 3 major problems with buying 292,201,338 lottery tickets with every combination

of Powerball numbers.

http://finance.yahoo.com/news/think-3-major-problems-buying-204649381.html

At $2 for each ticket, then, it would be possible to buy every possible ticket for $584,402,676. As a journalist, I don't have that much money sitting around, but either a consortium of a few million Americans or a large and wealthy institution like a bank could conceivably assemble that level of cash....

The first problem is the actual physical act of buying 292 million Powerball tickets and filling them out by hand. Since we need to very carefully and systematically make sure we get every possible ticket, using the computer-generated random quick draw will not work for us....

The second and larger problem with our comprehensive Powerball scheme is the risk of splitting the jackpot. While the fixed prizes do provide about $93 million of our winnings, the overwhelming bulk of the money comes from the big prize....

The above analysis of our odds of splitting the pot assumed that all the other tickets sold were to normal people who would choose their numbers more or less at random. But seeing as we are going all in and buying every ticket, it's possible that someone else could be attempting this as well. There are, after all, several organizations in the US that have the financial and personnel resources to theoretically go out and buy 292 million Powerball tickets.

An Australian consortium actually tried this years ago with an astronomical jackpot in Virginia, but they only had to cover one state.

[haele]

11. Damn it, I did what I'd swore I'd never do...buy 5 Powerball tickets.

Just too much temptation. That $10 was burning a hole...burning, I tell you. I had to plop it out on the counter.

Ah well. Maybe I'll get three or a mega number, the payoff for that should be a fair trade; my $10 for their $2. Or I'll just keep the ticket as a souvenir of one of the symptoms of unfettered capitalism. (See, grand-kids, that ticket represents the only way most of the lower class makes it out of poverty for a few years...)

The few times I buy lottery is for state games, not interstate. That way, at least the expenditure for entertainment purposes does some percentage of good, even if I lose.

BTW, I still suspect a "hack" in the system. Only one combination of "balls" that's been "pre-picked" by the hacker is going to pop up when there is a winner, and the winning ticket numbers will always roll over until the hacker is the only one with that ticket. Then they'll send in their patsy winner with the ticket, s/he pays the taxes, and once disbursed in lump sum the money disappears into another country or organization's coffers via money laundering.

Sort of an Ocean's 21. But without the genial George Clooney, Brad Pitt, and Matt Damon. Instead, real scammers who will end up using illegitimate winnings for nefarious purposes.

Haele

[meaculpa2011]

15. Wow! So if the winner distributed the money to all...

330 million Americans each one of us would get $10 Billion!

[KamaAina]

20. Thread win!

There's a meme going around the intertubes that said that every 'Murkin would get $4.33 million, when in the reality-based world it would be $4.33.

[Douglas Carpenter]

47. that is four dollars and thirty-three cents ($4.33) payed over thirty years - but yeah I saw that on

Facebook just yesterday. I hate to correct grown adults on fourth or fifth grade arithmetic.

[Fuddnik]

17. I'd be the shortest - termer ever in the 1%.

[KamaAina]

21. Not me. I'd make the repukes long for the good old days of George Soros.

[yellowcanine]

23. Yeah that would be fun, wouldn't it?

Pour money into key state legislative, congressional, and senate races all over the country on behalf of Democratic candidates and make them rue the day that Citizen's United went down.

[KamaAina]

24. We're only talking about one billion

less after taxes. Everett Dirksen's maxim holds true in today's political world: "A billion here, a billion there, pretty soon it adds up to real money."

[yellowcanine]

25. Yeah but $100,000 here and there could make a difference in key races.

Particularly state legislative races - which is where the real need is to elect Democrats.

[Atman]

31. I will buy a couple of tickets.

Why not? My chances are as good as anyone elses. I can afford $4 or $6. What is the worst that can happen? I'm out $4. Awww. What's the best that can happen? I win $1.4 billion. WTF? Why not? Maybe a meteor will hit my house tonight, too. Maybe it won't.

[B Calm]

32. Only takes one ticket to win and that's all we'll buy! Odds of winning

doesn't increase because you buy more. It's either your lucky or your not.

[jeff47]

35. Technically, the odd of winning do go up with each ticket you buy.

1 in 292M divided by the number of tickets you buy.

So 1 in 292M for one ticket. 1 in 146M for two tickets, and so on.

Though to get to the point where it makes a noticeable difference, you'd have to buy hundreds of millions of tickets, which the lottery rules forbid anyway.

[A HERETIC I AM]

52. Ummmmmm....not quite

Your odds do not drop by half merely by purchasing a second ticket. Each individual ticket has the same odds of being the winner, but the odds of an individual winning do not significantly change until you have bought tens of thousands worth.

[yawnmaster]

61. Yes the second ticket (with different numbers) doubles your chances, from 1/292M to 2/292M...

which in percent is
0.00000034% for one ticket
0.00000068% for two tickets

your odds do double but still remains improbably low.

[Mosby]

37. the odds change, but not by a lot.

[restorefreedom]

36. sorry to be a wet blanket

but this has become obscene

how many hungry children would this money feed? how many needed vaccinations?
how many homeless people and animals could be pulled off the street?
how many cancer treatments and screenings would it pay for?

greed. its the u.s. american way

[Mosby]

38. the states in the poweball lottery use the profits for all kinds of services.

[restorefreedom]

39. at least there is that. thx :) nt

[Xithras]

44. And don't forget that a huge percentage will go to taxes.

If one person wins the $1.5 billion, they'll make a noticable blip on most states tax receipts this year. That's a lot of general fund money for schools and social programs.

[KamaAina]

45. No it won't

California does not tax lottery winnings on tickets purchased here. So I'm off the hook.

[Douglas Carpenter]

46. yes that is true for California - but not most other states

[KamaAina]

57. It doesn't matter. The winning ticket has already been sold in San Jose.

[Douglas Carpenter]

60. actually a winning ticket was sold in San Raphael ... although it is possible there is more than one

[philosslayer]

48. I agree

So, how many tickets are YOU going to buy??

[restorefreedom]

59. zero

i have bought now and then over the years, but a billion? i am out. i just don't want to be part of it.

i understand the desire and in many cases, the need for more money. but its not for me anymore. maybe i will play my local lotto and see if i can win a few grand. that would be nice

how about you?

[MerryBlooms]

43. We bought ten bucks a quick picks.

[RandySF]

51. I can't wait to retire Thursday.

[shanti]

58. you could buy a small country

with that kind of money kind of obscene, imo.

[yawnmaster]

62. I bought 20 of the same ticket so if there are multiple winners I'll still get the biggest chunk.

no I didn't.