humor

Big money

Well, lottery fever is once more upon us. The Mega Millions jackpot has hit $500,000,000 [1] and people are just screaming to buy it. But how much money is that? What does that number mean in practical terms?

Well, the mean net worth of the American family is $556,300, so you would be worth about 856 times as much as the mean American. But many people argue that the median net worth is a better metric [2]; at $120,300, you’d be worth the same as 3,957 families. And the typical member of Congress is worth but $725,000 [3], so you could only afford to buy 657 of them. However, since there are only 535 members of Congress, you could collect the whole set and still have $88,125,000 left to live on [4].

Or you could just hire people. A lot of people. If you hired a typical American worker, you’d pay $41,674 in wages and could afford 11,422 people for a year (or one person for 11,422 years). If you decided to go offshore, you could hire a Chinese worker for $7647, which would allow you to staff a factory of 59,897 people.

Of course, if shopping is your thing, you could buy 16,760 new cars (better get a bigger garage), a year’s worth of gasoline for 108,182 families, 6,025,316 Kindles, 848,485 iPads, 13,236,930 books, or 19,043 sailboats.

If you’d rather spend the money on experiences, you could take 2,800,000 hot air balloon rides, 3,547 around the world cruises, fourteen rides to the ISS on a Soyuz as a space tourist, or three rides to the Moon and back [5]. But you could only pay for 1/3 of a Shuttle launch (those suckers were expensive!).

Of course, this assumes that you’d actually be able to win the ticket. The odds of winning are 1 in 175,711,536 [6]. If half of the people who live in states with Mega Millions were to buy one unique ticket each, then the prize would be won. But not everyone buys a ticket and not all tickets are unique [7], so there is no guarantee that this jackpot will be won. And, if it isn’t, there is one bet that is a sure thing – people will get even crazier!

John

[1] Assuming that you take the 20 year annuity. If you take the cash-value option, you’ll only get about $359,000,000. Not exactly spare change, but a definite drop in net value.
[2] This is because income and net worth distribution in America are decidedly skewed. There are a few folks (the famous 1%) who own 80% of the wealth, and a lot of folks (the 99%) who own the remainder. The median tells us that half of the families in America are worth more than $120,300 and half are worth less than that, while the mean just tells us what would happen if we took all of the wealth and spread it out evenly.
[3] Which puts them solidly in the 1%.
[4] This assumes, of course, that they are honest politicians…
[5] I know some folks who’d be willing to pay extra if my trip didn’t include the “and back” portion!
[6] That assumes that you buy one ticket. If you buy two unique tickets, your chances are roughly 2 in 175,223,510 – but most people don’t buy two totally unique tickets. If any of the numbers are re-used, then you get less of a boost than that. The math is ugly [i], but you can see what I mean if you consider what would happen to the odds if you bought two identical tickets.
[7] Which raises the problem that you probably wouldn’t win that much money even if you did match all 6 numbers; someone else is likely to have the same numbers as you, and so the payout would be half the amount advertised even if you take it as an annuity.
[i] Translation: I didn’t want to do the full Bayesian analysis.

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6 thoughts on “Big money

  1. [i] Translation: I didn’t want to do the full Bayesian analysis.

    Lazy. Lazy. Lazy.

    Rest assured if I win I’ll not only buy you a ride into space, I’ll buy out one whole trip so that you can pick and choose who you fly with. 8:-)

  2. I like to buy a ticket when the jackpot is big like now. Not because I think I’ll win, but because the contemplation of which parts of my life I would change and which to keep if money were no object is an incredibly helpful psycho-analysis that only costs me $1. And for some reason, not buying the ticket doesn’t work as well – I need the real (extremely remote) possibility so I can really reflect. One thing is for sure, If I win I would fly down to Houston and OK to visit some dear friends that I have not seen in far too long. (and drinks would be on me!)

  3. The only lottery ticket I’ve ever bought was for a security guard at the library when I was in college. She asked me if I’d mind going to the corner store for her before I settled in to study (which I did). She was super nice and I always liked to see her, so while it would have been nice if her ticket had won, at least I still got to see her every day.
    I’m pretty sure that was also the last lottery ticket I’ll buy in this life.
    But thank you for your words of wisdom on Eric’s death-by-melting-underwear post. They were affiriming of my choice to be a non-lottery-player.

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