Guarantee: You’re sure to win BIG if you take this investment strategy!
Is buying a lottery ticket ever be a good investment? The answer is yes! For example, if you pay $1 for a ticket, the chances of winning the lottery are 1 in 10M and the after-tax cash value winnings are more than $10M, your expected return on that $1 ticket is actually positive, even though your chance of winning is very low. In fact, that lottery ticket might have a better expected return than some of the stocks or real estate you might be investing in.
So, should you invest in the Powerball jackpot this week? The answer is a resounding no! One of the data scientists on our team put together a model that projects the Powerball jackpot will grow to approximately $2.0 billion by next Wednesday. We estimate the cash value of this jackpot will be $1.3 billion. Assuming that you’re in a state like Washington that does not have state income tax, and if you are the only winner, you will take home $767 million!
For the Powerball, there is a 1 in 292,201,338 chance of winning the lottery. Thus, for every $2 ticket, the expected net value is $2.62, a whopping 31% return overnight!
Here’s the catch: Our same models project that there will be 1.1 billion Powerball tickets purchased (ticket revenue is split between jackpot, stores, schools, etc.). So with this many tickets sold, if you win the lottery, you are most likely going to share the winnings with 3.76 other people and your share of the winnings will be $204 million.
Given your chances, for every $2 ticket, your expected winning is only $.70. Putting it another way, you’re expected to lose $1.30 for every Powerball ticket you buy.
Our proposal: Buy a $1M Seattle home using FlyHomes and earn 1 million Alaska Airline Miles this week instead. A $1M home = 1M miles. It’ll feel like you won the lottery!
PS – I’m still going to buy a Powerball ticket for Wednesday’s drawing. Cross your fingers for me. 🙂