Week of 10/22/2018

Wild Lottery Fantasies Hide Nightmares
– by David Matthews 2

One billion dollars.

Let that amount sink in.

One. Billion. Dollars.

That was the estimated amount of the Mega Millions jackpot on October 19.  And with no winners for that drawing, the number is expected to possibly double that by October 23^rd.

That is a staggering amount of money for any one person to win.  If a single person won that, they would instantly be considered one of the richest people on the planet.  With the operative word being “considered”.

But for all of the hype surrounding a lottery of that size, there’s a lot about it that people just do not consider.

First, let’s get the obvious one out of the way.  In all likelihood, you will never win that amount.  The odds are so high that you would have a better chance of running for President of the United States against Donald Trump and win than you are in winning the grand prize in any lottery, never mind one at a billion dollars.  There are so many things that you would have a better chance at doing or experiencing than winning a lottery that to list them all would take days.

And yet we still dream big.  Because it only takes one ticket to win.  And with our greedy predatory malevolent business world working against most of us, actively working to screw us over at every opportunity, it’s natural for us to wish that the universe would give us a break.

Yes, it’s natural for us to dream big, and lottery people know this, which is why they hype up the grand prize.  It’s gambling, no matter if it’s run by the state or by casino owners.  The house always wins.  Well, with the exception of Donald Trump.  Trump is the only person who could put his name a casino, or a several, and still end up losing. 

And yet we still elected him President.  Go figure.

So, yeah, it’s natural for us to wish we could win a staggering amount of money to wipe away the sins of a greed-fueled economy and retire with comfort.  But let’s get brutally honest here... it’s still just that, a wish.  And, even if we do happen be graced by luck and get that winning number, we still will not get all the money that is hyped.

Let’s suppose that – in an alternate hypothetic timeline - you did win that $1 billion Mega Millions jackpot from October 19^th.

The first thing that you’d find out is that you really did not win one billion dollars.  Yes, you’ll be photographed by the media in a huge celebration and your name and face will be published around the world hold a giant fake check for “One Billion Dollars”, but it would be just that... fake.

What you would get instead would be a contract that you would have to sign with two options.  You can either sign into receiving an annuity that would – in theory – pay out to that one billion dollars over a couple of decades, or you could sign to waive that annuity for a much smaller amount up-front.  More along the lines of $450 million.  That doesn’t sound as impressive as “One Billion Dollars”, but it’s still nothing to sneeze at.  You could still live quite comfortably with that much money.

Why not take the annuity, you ask?  Well you could.  One billion over thirty years - which is the annuity for Mega Millions - is still roughly $33 million every year.  The math is a little complicated for it, but basically you’ll get a small amount at first and then over the next 29 years that number gets bigger and bigger.

But, still, that’s 30 years before you get all that money.  What if you wanted to buy a small island?  Or finance your own run for the White House? Or buy that corporation that you’ve always said you wanted to buy out just so you could pay back your boss for making your life hell?  $33 million won’t cut it.  You’d have to save up to make those kinds of big dreams reality.

And that’s presuming that the annuity will be there to pay out all the way to the end.

Let’s suppose that you sign that annuity, you get that $33 million up-front, and then, next year, the economy crashes, and the company that was supposed to look over and dole out those 29 annual payments goes belly-up.  You may have that initial $33 million, but now you’re out $967 million.  That money is gone, and you won’t get it back.  Ever. 

Don’t believe me?  “American Greed” has done several episodes about greedy crooks in charge of annuities that go belly-up.  Just ask about Mark Avery, who used the annuities of others to finance his fantasies of a private “black ops” air force.  Or Marcus Schrenker, who put annuity money into the housing market and then lost it during the Great Recession.  Nothing is immune from the pervasive systemic greed that is ruining America bit-by-bit.

So, yeah, it’s better to take the smaller lump-sum rather than risk an annuity surviving thirty years.  You’ll get a lot less, but you’ll still get it up-front.

Oh, but wait... then there’s the governments, state and federal, and they want their piece now.

Unless you came into this already wealthy, or unless you’re a corporation, you don’t get the GOP protection from the high taxes you’ll have to pay.  Instead, you’ll have to pay them all.  Right then and there.  So knock off half of that $450 million for federal, and another third for the state and possibly county or city taxes.  That leaves you with a little short of $77 million after taxes.

So you go from holding a fake check for $1,000,000,000 to getting a physical check after taxes of about $77,00,000. 

Still nothing to sneeze at, right?

And now comes the really hard part.

Remember when you made that big press conference with your name and your face shown all around the world holding that fake check for “One billion dollars”?  Yeah, you just put a huge bullseye on your back with that, because now everyone in the world will be wanting that money.  All of it.  Because they think that billion-dollar fake check you were holding is real.

Everyone who knows you will be your best friend and will have an idea on how to spend that money that you just got.  Every charity group will want you to be their new top donor.  Every so-called “financial advisor” will be calling on you to “advise” you on how to spend your money.  Your friends and your neighbors will demand you buy them a new house and a new car and to pay off their debts.  Strangers will come to you saying they have a sick relative that desperately needs money or else they will die.  Relatives that you never knew you had will come out of the woodwork and demand a piece of the money.  If you’re a guy, women you barely knew a long time ago will show up with kids demanding child support, claiming those kids are somehow yours.  Funny how they weren’t “yours” before you were seen holding that fake check.

And if you’re not careful... you will lose all that money and then some.

There’s a guy name Jack Whittaker who won $315 million in Power Ball in 2002.  He took the lump sum.  He suddenly had all those “new friends” that he never knew he had before.  And he said “yes” to them.  Soon he was being robbed on a regular basis because people knew he had money.  He lost his wife.  The two businesses he bought into were losing money.  His granddaughter, his best friend in the world, was killed in 2004.  Her mother was killed five years later.  He’s still working for a living today... in his nineties... because he had nothing left of that money.

And then there’s Abraham Shakespeare, who won $17 million in 2006, lost most of it through his “new friends”, then met a self-professed “financial expert” who committed the ultimate theft.  She killed him, buried him in concrete, and took what was left.

And all because everyone presumes that the money you won through blind stinking luck should really be theirs.

Listen, it’s okay to dream about getting that life-changing money.  But that doesn’t mean that you should be entitled to it just because life has been screwing you over.  It’s screwing us all over.  And if by some twist of luck you should win it, just remember that *it is* life-changing.  Everything and everyone you knew before that moment will change.  Money does that to people.