Lotteries: America's $70B Shame • Hacker News Board

Re: Lotteries: America's $70B Shame

#91

Post by mikeash » Tue, Mar 29, 2016, 1:22 PM UTC

runamok wrote: post #86

mikeash wrote: post #76

Earlier quoted context omitted.

I don't think this affects your overall point, but the lottery itself demonstrates that turning $5 million into $10 million isn't inevitable. Most big lottery winners end up broke again, if not worse, after not too much time. Obviously, the more typical sort of person with $5 million tends to do a better job with it.

If you have 7 or 8 years and drop it in a vanguard s&p index fund your odds are pretty good. The $5 would be too small to even invest before getting eaten by fees.

Yes, but lottery winners don't tend to drop their winnings in the S&P 500, they typically blow it on toys and entertainment and gifts and end up with nothing.

Re: Lotteries: America's $70B Shame

#92

Post by smt88 » Tue, Mar 29, 2016, 3:41 PM UTC

mikeash wrote: post #91

runamok wrote: post #86

Earlier quoted context omitted.

If you have 7 or 8 years and drop it in a vanguard s&p index fund your odds are pretty good. The $5 would be too small to even invest before getting eaten by fees.

Yes, but lottery winners don't tend to drop their winnings in the S&P 500, they typically blow it on toys and entertainment and gifts and end up with nothing.

I think you're on slightly different thread than we are.

We were saying that $5M is easy to turn into $10M, but $5 is impossible to turn into $10. We were referring to the fact that good investment vehicles are only available to people with large sums of money.

As a result, a poor person will be more inclined to blow the $5 on a lottery ticket because she has no investment options. It's still not a rational choice, but in her mind, she has nothing better to do with that $5 than take a chance at winning $10M. In her mind, that's how she gets to be a millionaire and no other way.

We weren't suggesting that a lottery winner will be a smart investor.

Re: Lotteries: America's $70B Shame

#93

Post by mikeash » Tue, Mar 29, 2016, 4:05 PM UTC

smt88 wrote: post #92

mikeash wrote: post #91

Earlier quoted context omitted.

Yes, but lottery winners don't tend to drop their winnings in the S&P 500, they typically blow it on toys and entertainment and gifts and end up with nothing.

I think you're on slightly different thread than we are. We were saying that $5M is easy to turn into $10M, but $5 is impossible to turn into $10. We were referring to the fact that good investment vehicles are only available to people with large sums of money. As a result, a poor person will be more inclined to blow the $5 on a lottery ticket because she has no investment options. It's still not a rational choice, b…

I was replying to the statement that "Turning $5MM into $10MM is inevitable." As the behavior of typical big lottery winners demonstrates, it's not inevitable. Possible, yes, probably even easy, just not inevitable. That's all.

Re: Lotteries: America's $70B Shame

#94

Post by NwmG » Tue, Mar 29, 2016, 6:36 PM UTC

mikeash wrote: post #93

smt88 wrote: post #92

Earlier quoted context omitted.

I think you're on slightly different thread than we are. We were saying that $5M is easy to turn into $10M, but $5 is impossible to turn into $10. We were referring to the fact that good investment vehicles are only available to people with large sums of money. As a result, a poor person will be more inclined to blow the $5 on a lottery ticket because she has no investment options. It's still not a rational choice, b…

I was replying to the statement that "Turning $5MM into $10MM is inevitable." As the behavior of typical big lottery winners demonstrates, it's not inevitable . Possible, yes, probably even easy, just not inevitable. That's all.

Semantics. I believe it was a slight hyperbole but it reads as such.

Re: Lotteries: America's $70B Shame

#95

Post by gozur88 » Tue, Mar 29, 2016, 8:31 PM UTC

jessaustin wrote: post #90

gozur88 wrote: post #89

Earlier quoted context omitted.

In oil country the wages are really good and there isn't much to do.

That doesn't explain the difference between North and South Dakota.

Aren't there a lot fewer oil workers in North Dakota?

Re: Lotteries: America's $70B Shame

#96

Post by jessaustin » Wed, Mar 30, 2016, 12:15 AM UTC

gozur88 wrote: post #95

jessaustin wrote: post #90

Earlier quoted context omitted.

That doesn't explain the difference between North and South Dakota.

Aren't there a lot fewer oil workers in North Dakota?

Currently, with the price as low as it is, I don't know. While the "boom" was on, there were actually more in North Dakota.

Re: Lotteries: America's $70B Shame

#97

Post by exolymph » Wed, Mar 30, 2016, 6:27 AM UTC

crazy1van wrote: post #23

wrong_variable wrote: post #17

Earlier quoted context omitted.

> "Personally, I prefer a government that lets people do stupid things" What an ignorant statement to make. Are you okay with people making "stupid decisions" like smoking in public places ? Are you okay with people making "stupid decisions" like driving drunk ? Are you okay with people making "stupid decisions" like shooting up a school ? Society works when we look out for each other - and not let people do whatever…

I think his caveat of "barring negative impact on others" pretty much covers these cases.

*her, but thank you. (I know it's a little thing, but it bothers me that people automatically assume anyone on Hacker News is a man.)

Re: Lotteries: America's $70B Shame

#98

Post by exolymph » Wed, Mar 30, 2016, 6:27 AM UTC

frogpelt wrote: post #81

wrong_variable wrote: post #35

Earlier quoted context omitted.

> "barring negative impact on others" You think taking what little money poor people have from them via allowing them to spend it on lottery does not have social consequences ?

Different methods of governing can basically all boil down to a simple balance scale: On one side you have the rights of the individual and on the other side you have the rights of the community. Some people tend to lean the scale toward individual rights and others toward community rights. Smaller government tends to handle the balance by staying out of the way until it's necessary that they step in. Bigger governme…

This is exactly what I was trying to say. Well put.

Re: Lotteries: America's $70B Shame

#99

Post by mikeash » Wed, Mar 30, 2016, 1:22 PM UTC

NwmG wrote: post #94

mikeash wrote: post #93

Earlier quoted context omitted.

I was replying to the statement that "Turning $5MM into $10MM is inevitable." As the behavior of typical big lottery winners demonstrates, it's not inevitable . Possible, yes, probably even easy, just not inevitable. That's all.

Semantics. I believe it was a slight hyperbole but it reads as such.

I was careful to state in my initial comment that it didn't affect the overall point, and that rich people who get there through other means don't tend to fail that way. So there's no need to beat me up over missing the point, because I got it.

Re: Lotteries: America's $70B Shame

#100

Post by walshemj » Thu, Mar 31, 2016, 9:42 AM UTC

nmrm2 wrote: post #14

walshemj wrote: post #11

Earlier quoted context omitted.

That depends if the prize is large enough then the pot odds are such it does make sense to bet on the lottery.

1. This basically never happens. 2. Don't compare to letting the money sit under a matress. Insteaad, compare with other investments. Buying a lottery ticket doesn't make sense when measured purely in terms of profit, even when the expected profit is non-negative.

It has ocasionaly in the UK on big rollovers for the UK and Euro Lotteries.