Sunday, February 19, 2006

Powerbull

We didn't win $365 MM in the Powerball lottery this weekend.

With a 1:120 million chance of winning the jackpot, a pot that big approximates an actuarially fair bet, even factoring in taxes and the penalty for taking an up-front lump sum payment. (That is, even if you only get to keep 1/3rd of the $365 MM, your estimated reward per lottery ticket is the same as the price of the ticket.)

Of course, putting $1 on the lottery is more risky than keeping that $1 in your pocket, and even the record-breaking pot of $365 MM is not enough to compensate you for that risk.

But at least the Monkey Mama and I got to engage in a serious conversation about where we would spend the rest of the winter if we won. (Who would take care of the dog if we went to the Caribbean? Would we buy an RV and drive to Tahoe?)

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