subject: Why poor people win the lottery [print this page] Why poor people win the lottery Why poor people win the lottery
Following fleeing the war-torn Republic of Congo, Alain Maboussou found work at a Nebraska meatpacking plant. Now he plans to quit that job and return to school after winning component of a record $365 million Powerball jackpot, 1 of the biggest lottery jackpots in U.S. history.
News like that warms our hearts, loosens our purse strings and unleashes our fantasies. What couldn't we do with component of $365 million, we ask ourselves as we loiter by the Slurpee machine clutching a hard-earned dollar.
Would 1 more ticket enhance our odds?
Is there a better set of numbers to play?
Why do hotel maids and ditch-diggers usually appear to win?
The lottery and you: a true/false quiz
Maids and ditch-diggers always seem to win
A: False. Consider already-affluent Jack Whitaker of West Virginia, who won a $314.9 million Powerball jackpot -- still the largest single U.S. lottery payoff -- on Christmas Day 2002. In fact, lottery officials in several states say big jackpots tend to bring out a much more affluent crowd.
But studies show that the heaviest lottery players -- the 20% of players who contribute 82% of lottery revenue -- disproportionately are low-income, minority men who have less than a college education. That has fueled a vociferous anti-lottery movement. "It truly is government undercutting what government's role ought to be," which is encouraging individuals in monetary straits to be responsible with their cash, says Tom Grey of the National Coalition Against Legalized Gambling.
About one-half of American adults spend $45 billion annually on some 35,000 lottery games in 40 states, plus the District of Columbia, Puerto Rico and also the U.S. Virgin Islands. It is not news when somebody earning $7 an hour scrubbing toilets parts with a buck for a ticket -- but it is news if she wins.
You have got to play a great deal to win
A: False. While it is accurate that Mega Millions winner Geraldine Williams frequently played games of opportunity - she won $1,000 at the Foxwoods Casino two weeks before her big win -- spending lots of money doesn't always do much for your chances. For instance, the odds of winning the Mega Millions are 1 in 135,145,920. Purchasing two tickets bumps your odds only to 2 in 135,145,920.
Of course, you have to buy a ticket to win. The average player nationwide spends $150 a year, according to the 1998 National Survey on Gambling. Some states have averages several times higher than that.
A lottery ticket is your greatest shot at riches
A: False. Sadly, this isn't the no-brainer that it ought to be.
In a 1999 survey by the Consumer Federation of America and monetary services firm Primerica, 40% of Americans with incomes between $25,000 and $35,000 -- and nearly one-half of respondents with an income of $15,000 to $25,000 -- thought winning the lottery would give them their retirement nest egg. Overall, 27% of respondents said that their best opportunity to gain $500,000 in their lifetime is via a sweepstakes or lottery win, the survey said.
Consider this: If you take that $150 a year and put it into a 401(k) or IRA at age 30, you will have $28,000 by age 65, assuming a reasonable 8% rate of return, says Jim Holtzman, an accountant and certified monetary planner with Legend Financial Advisors, in Pittsburgh. That figure doesn't even consider the added increase of contributing to a strategy in which a business matches contributions.
To save that $500,000 nest egg, you'd need to tuck away a little less than $100 a month starting at age 21. What's more likely: that you can discover an extra $100 a month -- or that the 1-in-several-million odds of even the smallest seven-figure jackpot suddenly tilt in your favor?
