How to Win the Lottery

Play with other people to win the lottery! it may not occur to many, but playing the lottery with other people is probably the best way to play the lottery. Think about it for a minute. Would you rather improve your chances to win, but be more likely to win by playing with others, and split the jackpot or would you rather keep the chance of the full jackpot to yourself, but probably lose?

This should be an easy choice to make. after all the goal of playing the lottery is to win it. Aside from more accurate predictions you have two options to improve your chances. You can buy more tickets, which means you lose more money if you don't win, or you can play as part of a group and share a jackpot win. If you play a multi-state lottery like MegaMillions then sharing a jackpot won't be bad since the jackpot will probably be high. In all likelihood you would still become a multi-millionaire. Does it really make much difference if you win 5 million as opposed to 2 million? Either way you would be a multi-millionaire, and probably not have to work for the rest of your life.

Let's look at an example of a 5 million dollar jackpot win. If you take the cash lump payment the actual value to you will be around 3.5 million dollars. The first think to look at is buying a nice house. Let's say you buy one at 1.5 million dollars. That would be a very nice house. Below is a house for sale in 2011 in the L.A. area for 1,000,000:

Next, you would want a nice car. Let's say you buy a fancy one for $100,000. Below is a BMW 7-series, costing $120,000:

That means you still have 1.9 million, almost 2 million dollars left! The best thing to do then would probably be trying to earn a safe return on the money. Let's be conservative and say you put in all in mutual funds, which are generally regarded as very safe investments, and earn a return of just 4% annually. This means you would receive about $72,000 per year return on your investment. Of course, you would owe capital gains taxes on that so that would probably reduce it to around $50,000 per year. That's still not too bad. Could you live on $50,000 per year with no house or car payments? Most probably could do so quite comfortably. Remember, this includes having a very fancy car and nice house.

Now, let's look at receiving a jackpot of say 20 million dollars instead. Again, you would buy a house and car. Since the jackpot is higher you could afford a more expensive house and car, but would you really need it? Let's say you buy the same house and car discussed and make the same investment in mutual funds. You would now receive about four times more annually to live off of, which would be $200,000 per year. Would that make your life very much different? You probably would imagine a little difference, but remember, by going for the higher jackpot it means you have less chance to win anything at all.