Splinter Therapy

Pondering the Lottery - Part 4 of 4

I have now shared my secrets for winning the lottery – create a pool of people so that I have more chances of winning.  I am pretty sure that at some point this will come through for me.  So, once we win here is what I would like to do with the money.  Disclaimer, my wife and I have not discussed this in much detail; so, I am sure this would change quite significantly if we actually won.

Let’s assume after splitting the winnings with the other pool members, paying taxes and accounting for the lump sum payout we take home $2.5 Million.  Here is where it would go.  These are not in any particular order.

1. Take it all.  Go to Vegas.  Step up to Roulette table and put it all on “red”.  Just joking.
   
2. Skittles.  Spree. Butterfingers.  Lots and lots of Skittles, Spree and Butterfingers – not joking.
   
3. Kingdom Building Activities – church, para-church organizations, etc.  At least 10% probably a lot more.
   
4. Mortgage paid off.  Seriously – if you are debt free you could work at Chick-Fil-A and get by if you had to – plus you get free waffle fries.
   

5. Cleaning Service – just someone to come in once a week to do the weekly chores – vacuuming, dusting, bathrooms, etc.  Not lazy – just want to free up this time so that more time could be used to invest in children while they are young.  Once they are old enough, we will get rid of the service and have them do the chores.  Lottery or not – that will be a great day!

6. Set aside money for children’s college education.  From where I live I would need to pay out-of-state tuition to send the children to Auburn which is where I am SURE they will want to go.  If they want to go to Tennessee or Alabama, they pay their own way!

7. A nice globe.  I really want a nice globe for my office – one of those cool ones that lights up and slowly rotates by itself (one rotation per day – just like the earth – I don’t even know if this exists – if it doesn’t, it should).  I get so frustrated when I hear of a country and have no idea where it is in relation to anywhere else.

8. Tailgating gear and season tickets to Auburn football games.  We think tailgating would build some great family memories and serve as a great community building activity.  I am not just talking about a few folding chairs and some potato salad – I am thinking camper, satellite dish, generator, etc.  Think how Clark Griswold would do tailgating and you will get a pretty good idea of what I have in mind.

9. One week of bag mania.  For reasons I don’t understand my wife loves bags/purses.  It is very strange to me. The obsession is not to Amelda Marcos levels but close.  I would love to give her the freedom to go out one week and get all the bags she wants – just an indulgence, not much kingdom building work here, but I know it would make her happy.

10. Video iPod

11. Lawn / Home Maintenance Service – I still want to cut my grass, weed-eat and blow (do some great thinking during those times).  I just can’t keep up with the rest of it – the weed pulling, trimming limbs, cleaning the gutters, sealing cracks in the asphalt, picking up leaves (oh, lord – it is just too many leaves), pressure washing, etc.  I get stressed just typing this list.

12. I would buy a new weedeater each Spring.  They never seem to work very well after the first year of use.  Picture me slamming it into the ground at least once each week (won’t start, cord won’t come out, …).

13. Participate in the World Series of Poker – just one time.

14. Hire someone to come to our house and complete-in-full the “honey-do” list WITH me and the boys.  I am absolutely horrible at home projects – nothing ever works as it should after I get a hold of it.  I seriously want to do these projects with the handyman so that the boys and I can learn how to really do home-project type of work.

15. No more Southpaw.  Killians Red or Sam Adams from now on!

16. I have this really big dent in my Accord’s passenger side door where I hit my wheelbarrow trying to get out of a hail storm.  I think I would get that fixed. 

17. Garage organization – shelves, peg-board, hooks, etc.  I am foaming at the mouth thinking about it.

18. Camping gear for back-country hikes.  I picture me taking the boys hiking/camping pretty regularly as they get older.  Great bonding activity.  Something about a campfire that helps people share their hearts.  Hike all the trails in the Great Smoky Mountain National Park?  Hike the AT?

19. Safety Net fund – So many people are afraid to chase their dream due to financial insecurities.  I would to love to have some money set aside to help those who take the leap and then don’t succeed or even need a little boost in the beginning.

20. “Heart Vacations”  We would still do the normal “trip to the beach” thing, but I really want to take some adventurous, inspiring, and challenging vacations (even day trips) as well.  Here are some examples:
      a.  Take boys rafting down Colorado River
      b.  Lunches with authors who have impacted m
      c.  Seminars/conferences
      d.  Weekend trips to see old friends

21. I would probably quit my job and either go back to school or give myself a year (two at the most) to write the book I have in my head – maybe both.  I also have some Visual Basic programs that I think would be commercially successful – would like to attempt creating them.

22. Buy a rental cabin in the mountains near Gatlinburg.  Hope to rent it most of the year but also have it available for some solitude time or “marriage retreats” for just the two of us.  Would also like to have something like this to share with others who need a place to get away for a few days.  Nothing fancy – in the mountains, isolated, running water, roof, beds, controlled temperature, desk – pretty rustic otherwise.

23. Custom desk for my office.  The desk would mostly look like a traditional desk, but it would also have an elevated area.  I really want the capability of standing up while I work and still be able to type and/or write.  Got this idea from a friend, and I can’t shake it from my mind.

24. An extra TiVo.

25. And finally, $5,000 of "slush fund" money to spend the first year - books?, a luxury item?, more lunches, with friends?, etc.

Pondering the Lottery - Part 3 of 4

Ok. So, now you know the chances of winning the lottery (see August 1 post), and you know how I feel about the lottery itself (see August 4 post).  Today I will share with you my strategy for winning the lottery.  Tomorrow I will share with you what we plan on doing with the money once we win.

There are all kinds of web sites out there with strategies for winning the lottery.  Most of them give ideas on how to pick the best numbers.  Some of them base what numbers to pick on the numbers that have been picked previously.  For example, if the last three powerball numbers were 15, 25, and 36, then they would recommend against picking those numbers.

Conventional wisdom may make you think there is something to this.  Nada.  Think of flipping a coin.  Everytime you flip it, there is 50% chance that it will be heads and a 50% chance it will be tails.  What if I have flipped it nine times in a row and it has turned up heads every time so far, the chance of the 10th flip being tails is much higher isn't it?  No.  It is still 50%.  Every time - 50% - no variation, no exceptions.

Also some sites would recommend against picking combinations such as 1 - 2 - 3 - 4 - 5 - 6.  Really, that would never happen would it?  Well, it depends on how you define "never".  The chances of it happening are about 1 in 191 million.  But, guess what - those are the same chances for every other combination.  Every single combination of the numbers has exactly the same odds.

There is only one strategy that increases your chances of winning the lottery.  Now this is secret knowledge (I found it hidden in the gnostic gospels); so, please guard it carefully and use it responsibly.  Are you ready?  ....

Buy more tickets.

Do you know what your chances of winning the lottery are if you don't buy any tickets?  0%

Do you know what your chances of winning the lottery are if you buy 1 ticket?  1 in 191 million.  Those are not good odds, but they are infinitely better than 0%.  As Jim Carey says in Dumb and Dumber:  "So, you're telling me there's a chance".

Do you know what your chances of winning the lottery are if you buy 2 tickets? 2 in 191 million or stated differently 1 in 96 million.  So, I have now doubled my chances of winning when compared to buying 1 ticket.

3 tickets?  3 in 191 million or stated differently 1 in  64 million.  But, now my chances of winning have only increased by 50% when compared to buying 2 tickets.

4 tickets?  4 in 191 million, or 1 in 48 million.  Chances of winning have only increased by 25% when compared to buying 3 tickets.

I know you see the pattern, but did you notice that every time you buy more tickets the impact it is having exponentially decreases (it went from infinite to 100% to 50% to 25%).  It will continue to half with every ticket you buy.   

The truth is that I know of a way that you would be 100% guaranteed of winning the big jackpot.  Buy 191,331,855 tickets - just make sure each of them are different.  That way you will have every single combination of numbers possible - thus, guaranteed to win.  Of course, if the jackpot is less than 191,331,855 you are guaranteed to lose money.  If the jackpot is over 191,331,855 you better hope that nobody else picked the winning number or you are going to share the jackpot with them.  And, don't forget about taxes and that they cut your winnings in half if you decide to take the lump sum payout.

The point is that at some point by buying more tickets you hit the point of diminishing returns.  If you plot all of this on graph by putting the number of tickets bought on the horizontal axis and  the chances of winning on the vertical axis you will not get a straight line.  You will get a curve - the knee of the curve will be somewhere around the "4 tickets purchased" area.  That might be considered a good number to shoot for when determining where the law of diminishing returns kicks in.  What the graph tells you is that for 5 tickets or more, those tickets are having much less impact.

To put it another way.  If you buy 2 tickets, you doubled your chances when compared to buying 1 ticket.  To double your chances again, you would have to buy 4 tickets.  To double your chances again you would have to buy 8 tickets.  Double again - 16, then 32, then 64.  So, to get the same impact your investment has to increase exponentially.

So, with all that being said, I ran the numbers and landed on 20 tickets as a good number - total judgment call.  With 20 tickets your odds are approximately 1 in 10 Million.  That is much more attractive than 1 in 194 Million.  I see it as basically being one person randomly selected out of New York City versus being 1 person selected out of the entire USA (not a perfect analogy but close).  The chances are extremely slim both ways - no noubt, but doesn't the NYC scenario almost sound realistic?

20 tickets.  That is a lot.  I am not going to spend $20 two times each week to try and win this thing.  So, I sent out an email to my friends and family in an attempt to pool some money together.  We buy 20 tickets together and then split the earnings.  Here are the guidelines for our pool:

1.  We only participate when the jackpot is $100M or greater.
2.  Once you join the pool, you are commiting to $1 for each drawing of $100M or greater. (that way I don't have to ask permission before each drawing)
3.  We reinvest any winnings (e.g. if we get 3 numbers correct, we win $3) back into more tickets.  This increases our chances and keeps the record keeping simple.
4.  I go out and buy the tickets prior to each drawing and then email the numbers out to everyone before the drawing.  This sounds cumbersome, but it takes less than 2 minutes to type out all the numbers.
4.  Once the jackpot is won (assuming we didn't win it), then everyone zeroes out their balance with me via paypal.

We are in the middle of the process right now.  The jackpot has been over $100M for a little over 2 weeks.  We have participated in 4 drawings and have actually won some money which we reinvested in more tickets as outlined above (hit a couple of powerballs and had one ticket with 3 correct numbers on it).  The drawing tonight is for $204 Million.  If we win, then we will each win $10Million.  Of course, after taxes and lump sum payouts each of our take home earnings would be closer to 2.5Million.  2.5 is a lot less than 204M, but I will gladly accept it.  As of tomorrow, we will have each spent a total of $5 - about the price of a happy meal (super-sized - is there any other way?) - of course, that would also feed a family of 4 in Africa for a week, but that is another topic (financial stewardship) that I will touch on just a little bit tomorrow.

Pondering the Lottery - Part 2 of 4

I will give my strategy for winning the lottery tomorrow.  On Sunday, I will complete my lottery ponderings when I disclose what I would do with the money if we won.  Today, I wanted to give my thoughts on the lottery itself.

I LOVE THE LOTTERY
First, let me start by stating that I love the lottery!  I voted against it, but I often participate in it.  I enjoy looking at the billboards and watching the jackpot number climb.  Although I know it is unhealthy to my soul, it is fun to think about winning and what you would do with the money. 

THE POOR AND THE GAMBLING ADDICTS
Ethically and morally I don't see anything wrong with a lottery.  Participation is strictly voluntary.  I have heard that most studies show that it is the poor who spend an unhealthy amount of their resources on lottery tickets.  I don't doubt that is true.  Here is my assumption, almost all of the people who do this are not poor because they lose their money on the lottery; they are probably poor because they make decisions like this.  If the lottery wasn't there, I would guess that these same funds would not go to any greater purpose.

But what about the gambling addicts.  Aren't we enabling them.  15 years ago this may have been an argument, but with the availability of internet gambling sites it is much easier to bet online than it is to buy lottery tickets.

Despite all this, even if the poor person would have spent his money on something more productive, and even if the gambling addict is brought into his addiction through the lottery like a drug addict is brought in through recreational drugs, I still don't think lotteries are bad things.  They are neutral things - like money, time, food, etc.  Like every other neutral things, the lottery can be used for good - such as cheap, meaningless entertainment - or bad as in the two examples above.  If we get rid of lotteries (or gambling, in general), we have done nothing to change the hearts of the people who are abusing themselves with it.  Whatever is in their heart that makes them susceptible to abuse is still there and will manifest itself in some other unhealthy way.  Until someone's heart is transformed their actions will continue to display depravity.

THE GOVERNMENT AND LOTTERIES
After reading what I wrote above, you may be surprised to learn that I voted against the lottery.  Although I think lotteries are morally neutral,  I think it is completely absurd that governments are involved in sponsoring them.  Assuming that our governments should be involved in education (topic for another post), is this really the best way to fund our lack of money for public eduation?  Governments and lotteries - I may be wrong here, but I look at this and think how far we have strayed from what the role of government should be in our lives.  The fact that lotteries exist just show how screwed up our entire governmental infrastructure and tax code are.

That being said, I think private businesses should be allowed to start a lottery if they so choose.  I can't understand how we all so blindly accept how the government forces its morality on us.  By making gambling illegal, they government is taking my freedom away - who are they to say how I choose to spend my money?

The idea of government sponsored lotteries is very interesting to me - in most states gambling operations are illegal (I am not even legally allowed to host poker games in my house).  So, here is the message state-sanctioned lotteries are sending us:  "As your government, we know what is best for you; so, we are going to restrict your freedom in how you choose to invest/spend your money - gambling is bad - therefore, we are going to make it illegal.   However, we need more money to fund our government - therefore, we are going to start our own gambling operation.  Please ignore our hypocrisy and double-speak."

In summary, here is the message of the state-sanctioned lottery and the question that flows from it:  Immoral activities (as decided by our government) should be illegal unless they are initiated and controlled by the state.  So, if we want be consistent here, we must ask why we don't have state sponsored casinos and/or prostitution?  Really, why not? 

SUMMARY
-Lotteries are neutral things - not good nor bad.  If played responsibly for entertainment purposes - good thing.  If played for financial investment purposes - bad thing.
-The government should not be involved in lotteries
-Private business should be allowed to start any type of gambling operation they so choose.  The government making moral decisions about our lives - such as how we spend or invest our money - is very dangerous.

Pondering the Lottery - Part 1

I have done a lot of thinking about the Powerball lottery recently – in a good way, not a lustful, fantasy, unhealthy way (well, maybe some of that, but not too much). Today, since I think most people find it interesting, I wanted to give a primer on calculating the odds of winning and then compare that to the odds of some other strange occurrences.  Over the next few days, I will share my strategy for winning the lottery and finally share my thoughts on the moral and ethical implications of the lottery in our society.

Lottery Odds 

Disclaimer:  I know that I am a nerd.  Please don’t feel the need to inform me of that fact in a response. 

Calculating your odds for winning the lottery is very easy.  You basically figure out how many ways you can win and divide it by the total number of ways the balls could be picked.

In the Powerball Lottery, they have 55 balls in the hopper.  They pick 5 balls out of the hopper.  Then they put all the balls back in before picking the final ball - the Powerball. 

Let’s say that the winning numbers are:  5  -  21 -  33  -  44  -  55 and that the Powerball is 12. 

So, our chance of getting the 1^st ball correct is 1 / 55.

Our chances of getting the 2^nd ball correct is 1 / 54 (only 54 balls left to choose from).

Our chance of getting the 3^rd ball correct is 1 / 53 (only 53 balls left to choose from)

And so on.

To get all 5 numbers you correct, you must correctly select the first number AND the second number AND the third number, etc.  Not only that, but they put all the numbers back in the pot before selecting the powerball number. 

So, my chances of selecting the powerball correctly are back to 1/55.

In the world of mathematics when “this AND that” have to be true, that means MULTIPLY your chances together.  Think in terms of a coin flip or having babies.  The chances of getting tails (or having a boy) are approximately 1 in 2.  If you have two coin flips (or have two kids), the chances of tails coming up both times (or having two boys) is 1/2  x  1/2 or ¼ .  The chances of tails coming up three times in three coin flips (or having three children – all boys) is ½ X  ½ X  ½   =  1/8.

So, the chance of picking the right lottery number is:

1/55  X  1/54  X  1/53  X  1/52  X  1/51  X  1/55 (remember they put all the numbers back in when picking the powerball – that is why we multiply by 1/55 at the end)

This calculates out to:  1 in 2.3 trillion. 

But, wait, there is good news.  The calculation above assumes that you pick the numbers in the exact order in which they were drawn.  The reality is that if the winning numbers were:    5  -  21  -  33  -  44 -  55  Powerball:  12

Then we would be winners if any of the following scenarios played out:

21    -  44  -  55  -  5  -  33  Powerball:  12

OR

55    -  5  -  21  -  33  -  44  Powerball:  12

OR

5       -  33  -  44  -  55  -  21  Powerball:  12

Etc.

The reality is that there are 120 different ways to arrange these numbers.  Using the same logic we used above, this can be calculated by multiplying the numbers together:

5       X  4  X  3  X  2  X 1  =  120

Notice that we are picking a total of 6 numbers – not 5, but since the powerball is fixed (in other words it always has to be the last ball picked), it does not factor into this calculation.

If we were picking 7 numbers (including the powerball), the calculation would be:

            6 X  5 X 4 X 3 X 2 X 1 = 720

But, we are not picking 7 numbers we are picking 6 (5 normal numbers and 1 powerball number).  So, we really have 120 chances in 2.3 trillion to pick the right numbers. 

This simplifies to:  1 in 191,331,855. 

To put this number in perspective:

-there are approximately 300 million people living in the United States
-the chance of drowning in a bathtub is 1 in 818,534

-the chance of dying due to being struck by lightning is 1 in 4.4 million

-the chance of dying due to exposure to hot tap water is 1 in 7.2 million.

-the chance of dying by legal execution (e.g. electric chair, lethal injection, etc.) is 1 in 4.3 million (of course, this number is higher if you live in Texas).
-the chance of a woman giving birth to quadruplets is 1 in 705,000

Seems, hopeless doesn’t it.  In reality it is; however I have a plan.  I will share that tomorrow.

Upcoming Posts:
1.  Strategy for winning the lottery and my opinion on lotteries in general.
2.  My review of the movie:  The Lakehouse
3.  My thoughts on paradigm shifts