The Powerball jackpot has risen to $1.5 billion dollars. It's never been that high.
The odds of winning the Powerball jackpot are about zero. If you buy a ticket, the odds increase only slightly, to 1 in 292,201,338. If you buy two tickets, your chance of winning increases to 2 in 292,201,338. Yeah, that’s twice the chance, but still pretty close to zero. And you’re out $4. Look at it this way: this particular lottery has already gone through 18 drawings, and no one has hit all the numbers any of those times.
The astronomical odds can be confusing. To get an idea of how the lottery works, you can try the Powerball Simulator. In a flash, it played six months of Powerball for me, wherein I paid $112 for tickets and won $12. Yay. You can keep playing if you like. The simulator doesn't cost anything.
But what if you win? The first thing you should do is hire financial advisors. And you should take the annuity instead of the cash payout. Mainly because a Powerball winner is not the greatest financial wizard around. We know that because they bought lottery tickets.
Even if you understand the odds, you might want to buy a ticket because the jackpot is so high that the “expected payoff” formula is worth the $2. That is, before you figure out how much tax will be taken out, and the possibility of splitting the jackpot with multiple winners.
Or you might want to buy a ticket just because the thrill is worth $2. That may be true, but the people who are buying tickets are buying more than one. And many of them can’t afford that kind of thrill.
I still think it’s better to not buy a ticket in this week’s Powerball lottery, precisely because the jackpot is so high. That kind of money is guaranteed to ruin your life. No matter who wins, if anyone does, I can tell myself I still have that $2.
(Image credit: Flickr user Clint Gardner)