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Old 09-01-2010, 03:44 AM   #21
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I know the close to 0 probability of winning - but then, how comes that there are winners at every drawing?
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Old 09-01-2010, 04:25 AM   #22
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I know the close to 0 probability of winning - but then, how comes that there are winners at every drawing?
That's amusing in the context of the lottery, but it's surprising how many people don't realise that this phenomenon affects their lives every day. When it appears as the Prosecutor's Fallacy, it can have serious consequences.
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Old 09-01-2010, 07:16 AM   #23
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I disagree that all of the people profiled are train wrecks.

Last night they showed a woman (an MD) who won 17.5m net and only bought a $600K house, 3 college educations for her nieces, and a NYC apt. She also has kept working.

On another episode they profiled a man who won $30M (annuity) who used each years payment to buy an income property. Now with two years left he has a net worth larger than what he won before taxes.
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Old 09-01-2010, 08:15 AM   #24
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I consider my "lottery" win to be the ESOP I cashed out when I left my company nearly 2 years ago. It was worth $300k and I invested it in a high-yield (not junk) bond fund which is funding nearly whole ER income stream.
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Old 09-01-2010, 08:18 AM   #25
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I am an avid reader of books about these kinds of "sudden money" situations but I've never seen this show. I'll try to look it up next time I'm around a TV.
One book I found fascinating on the subject of annuity buyouts was Edward Ugel's Money for Nothing.
From his website:
Ed met hundreds of lottery winners and saw up-close the often hilarious, sometime sad outcome when great wealth is dropped on ordinary people. Once lottery winners realized their “dream-come-true” multimillion jackpots were not all that they were cracked up to be, Ed's job was to sell them the cash they wanted—and often needed. Winners were rarely in a position to walk the other way. As Ed learned, few of them had the financial savvy to keep up with the lottery-winner lifestyle. In fact, some just wanted their old lives back.
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Old 09-01-2010, 08:59 AM   #26
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I disagree that all of the people profiled are train wrecks.
So do I. As I noted, about 20% seems to respond reasonably.
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Old 09-01-2010, 09:14 AM   #27
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I just finished reading the book "It's Not About the Money". There is a section on exactly this topic.

33% of all lottery winners file bankruptcy at some point after their windfall.

Amazingly high statistic, but if one has never been 'good' with money then having a lot of it isn't going to change their behavior.
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Old 09-01-2010, 09:21 AM   #28
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I admit I buy lottery tickets - after I reach the top of a 14er mt or when I'm out of the state - maybe 15 a year. I'll then think about what I would do with the money if I win. The problem is becoming I would not do anything much outside I what I am or want to do.
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Old 09-01-2010, 11:30 AM   #29
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One book I found fascinating on the subject of annuity buyouts was Edward Ugel's Money for Nothing.
Thanks for the tip. Just ordered the book.
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Old 09-01-2010, 11:47 AM   #30
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Culture, it is a pretty baldly honest view of a very unsavory business. The ignorance of basic financial information by lottery winners shouldn't have surprised me. Some other "sudden money" beneficiaries, like surprise inheritors and professional athletes, fare equally poorly, I'm afraid.
Hope you find the book as interesting as I did.
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Old 09-01-2010, 11:58 AM   #31
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Before I retired, a low wage guy who worked in our w/h inherited an unexpected sum of about $40k. He quit. People tried telling him it wouldn't last long, but he didn't listen. Not sure whatever happened to him.
I'm thinking it over but it probably would take less than 40K to inspire me to take a break from a W/H j*b.
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Old 09-01-2010, 12:08 PM   #32
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Before I retired, a low wage guy who worked in our w/h inherited an unexpected sum of about $40k. He quit. People tried telling him it wouldn't last long, but he didn't listen. Not sure whatever happened to him.
What is w/h ?

Ha
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Old 09-01-2010, 12:11 PM   #33
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warehouse job. I had one, too. I'd have quit for less, too.
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Old 09-01-2010, 12:52 PM   #34
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warehouse job. I had one, too. I'd have quit for less, too.
Graduated from college in to the Texas Oil Patch Apocalypse of the mid 80s. My first job with a BS in engineering was pulling orders in a warehouse. Quite a drop from my expectations. I lasted two days (leaving the second I got a better job offer), a testament to why you should never hire over-qualified help.
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Old 09-01-2010, 01:02 PM   #35
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Yeah, I took the w/h job to leave an even worse non-profit job. But at least at the w/h I could buy stuff we needed for our sailboat at cost, and I lost some serious weight hauling anchors and dockline down the aisles.

Having no education (until recently), I was never over-qualified for any job I took.
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Old 09-01-2010, 02:36 PM   #36
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I heard someone say that winning the lottery does not change someone's personality it merely emphasizes what was already there, and watching the above mentioned show I would have to agree that most of those featured were candidates for train wrecks before the lottery came into their lives. However, it seems to be well known that it is watching train wrecks that sucks viewers in, no-one wants to hear the happily ever after story. That said, if you won a fortune would you want to have your mug plastered all over the telly?
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Old 09-01-2010, 02:57 PM   #37
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There was a heartwarming story roughly a year ago about a lottery club in a tiny restaurant in northern Michigan that won 12 million dollars - about $400K each. Nearly all the staff stayed on to work, mostly in loyalty to the owner. Their splurges were to pay off house trailers, get dental work and send kids to college. I hope things continued to work out for them, as they really seemed to take their windfall realistically.
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Old 09-01-2010, 03:07 PM   #38
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That said, if you won a fortune would you want to have your mug plastered all over the telly?
Yeah, I think you have to be an attention-whore to want to appear on this show. I think any rational lottery winner would run far from TLC.

To their credit, there was one family that clearly was appearing to plug their foundation that worked with a childhood disease of some type.
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Old 09-01-2010, 03:16 PM   #39
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If I received a windfall, I'd blow it all on pizza and beer.

(oh and a couple of bottles of Gentleman Jack of course)
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Old 09-01-2010, 03:29 PM   #40
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So you'd pretty much do what you're already doing?

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If I received a windfall, I'd blow it all on pizza and beer.

(oh and a couple of bottles of Gentleman Jack of course)
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