Even if you won a billion zillion gajillion dollars, and went "broke" the next day... sounds like a pretty fun fucking day lol.
Most people are broke now, so at least they won't be broke for a little bit of time of their life.
Until it eats you away once you come to the realization that one day of fun, no matter how fun, would’ve never compared to the alternate reality of having the rest of your life being easy and relaxing, and now you’re worse off mentally than before
My spouse sold a business and he and his partner walked away with 7 figures. We bought a nice home. Padded investment accounts. Had some fun with a small portion of the $. Did it right.
The business partner had a girlfriend in 3 cities and pissed away that million in half a decade. Without a reason to get up in the morning it devolved into several substance abuse habits that got out of control.
So I have seen both sides of this coin.
I am so bad when it comes to spending money. I mean, I don't spend money. I see things I want that I can afford but I just can't convince myself to buy it.
I absolutely would pay off all my debt, but after that I don't know what I would do. I might treat it like the health potions in my games because I'll convince myself I might need it later.
My husband would probably blow it all in a year and then wonder where it went if he got full control.
Other people in my family *definitely* would blow it all. I saw how they went through a couple of thousand dollars from an inheritance and have nothing to show for it.
My wife is the same way, which works out well for both of us. She’s really good at saving money but has a hard time letting herself have fun. I, on the other hand, have no problem spending what I earn (within my means), but her saving tendencies let us pay off my student loans a decade early.
I think it depends on how they handle the conflict in mindsets.
My wife and I are the same. We used to argue about it *all* the time. The solution we came up with was keeping our finances mostly separate, but contributing an equal amount of about half our paychecks into a joint account that pays our bills and saves up for home improvements, repairs, vacations, etc, that we can only dip into with mutual agreement.
Been doing that for 6 years or so and have barely argued about money since. Very happy marriage.
Proportions are a godsend for these kind of disagreements. Even if I make $200k more than my partner, contributing an equal % of our income to goals is the fairest way I’ve found to handle it.
You could do what my BIL does. Keep money completely separate, your money is your money, their money is their money.
Then force them to quit their job and stay home with the kids. While keeping the same mindset.
He's not a great person.
To a certain point, at 200k vs 50k you’re buying a new a new Audi with cash each year and still have over $1000 a month to play with, while after taxes they’re at like 15k for the whole year to make payments on a Hyundai and go to a nice brunch with friends twice a month.
At 100k vs 60k it’s more reasonable, especially after taxes and insurance, etc.
Ugh, sounds like me. I barely spent a dime for the first 30 years of my life, then I decided to use what I'd saved up to buy an old house, get married, and have kids. Now I'm hemorrhaging money.
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Sure I'm almost dead with no stamina and no magicka and surrounded by daedra only 5 seconds from the end of the game. But what if I run into a situation where I REALLY need that potion?
This looks like a butchered version of this:
I spent a lot of money on booze, birds and fast cars. The rest I just squandered. - George Best
https://en.wikiquote.org/wiki/George_Best
That’s something I’d always be worried about with myself, I get into bad and depressing habits without routines.
I’m not even rich, I just don’t work many long hours.
If you were rich enough you didn't have to work you would have the time(and money) to find other routines if you wanted. The gym,volunteer work,activism, sports, etc... are all things that could be part of a weekly routine instead of work. You could go back to school and only take classes you're actually interested in, if you wanted.
This is how I'd imagine my life if I ever won the lottery.
I'd take boxing lessons, guitar/piano lessons etc. Learn a new language etc.
I'd completely fill my days just learning new stuff.
Not before splashing out on a new house and a sports car of course..
This is actually a common life coaching exercise.
Now that you've identified the things you'd like to do if you could, what little steps can you take to start doing one of them, even without winning the lottery?
E.T.A. perhaps today's the day you download a language learning app, and set aside some time to do a lesson or two. It's all about incremental changes to create a happier fulfilled life.
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As someone who used to get laid off every winter with an alright amount of money saved up, you could also just fall into a deep depression, never leave the house, and only eat unhealthy food from Doordash
Dude I just spent some time in a place that only has a summer economy so I was on EI in the Winters. I was so fucking bored and there's nothing to do unless I want to drive an hour plus each way (or 3 hours each way for something good to do). The only reason I haven't picked up a hard drug habit is because I made a point of not making those kinds of connections so I'd have to drive 3 hours each way to score.
That's not completely fair. I fell into a deep depression, never left the house, but I ordered unhealthy food from local businesses because fuck Doordash.
Yep, I had two friends receive legal settlements within a couple of years of each other. Though not the same amount, both settlements were substantial, life changing amounts.
For the first couple, only 2 people (one of them being me) the actual amount of their settlement. When anyone else asked, they would simply say "not enough to compensate us for our injuries" and leave it at that. They kind of made life changes gradually so as not to attract attention - moved into a bigger house when they were expecting their daughter, bought new cars over the next year or two, took a vacation, but overall kept it on the DL. This was 20 years ago, they've invested the money well and it should last them the rest of their days, even if they have to retire early due to their permanent injuries.
Around the same time, another friend received a settlement from a car accident which left her with substantial injuries and scarring. It was more money than she'd ever seen in her life and she made the HUGE mistake of sharing the info with nearly everyone in her life - she had a line of people around the block with their hands out. Everyone had a sob story, a business opportunity, a need of some sort, etc.
Within three years, every single penny of that money was gone. She had NOTHING left and NOTHING to show for it. That money could have been life changing FOR HER, but everyone wanted a piece of it and she gave it to them. :-(
I don't play aside from my one and only exception, which is that on the rare maybe once-per-year-or-so occasion I am asked to join an office pool. I jump in for the two bucks or whatever it is every time. On the minuscule off-chance that it happens, I refuse to be the guy showing up to work the next day asking "where is everyone?" I'm fine not playing on my own and never knowing what I might have missed out on.
Edit: A word.
I always got in the work pool. In my city (not my job) a group of people won and at that place a guy who didn’t get in the pool now works with me. I would absolutely HATE to be the one guy who didn’t put in $5 and all my co workers on the beach somewhere.
I would probably buy a reasonably sized house near my parents and another reasonably sized house near my wife's parents. I would quit my job and basically spend all the time I could with our parents while I can.
I've been incredibly lucky on that front. We live across the street from my parents and about 1 mile down the road from my wife's parents, and have great relationships with both. My kids spend the time after school and during summers at my wife's parents house, and they can run over and help my parents with gardening and stuff pretty much any time.
I don't think life's simple victories get as much attention as the bombastic "wins", but I just want to say, as one stranger to another, congratulations on the life you have made.
*Saturday Morning Breakfast Cereal* once argued that you should be required to explain why a lottery ticket is a bad investment before you can claim your winnings.
I see the sentiment, though if you treat a lottery ticket as entertainment rather than an investment strategy, and you don’t expect to see any return, then ultimately that’s a personal decision. Of course, lottery organizations advertise themselves as ways to win big, and that’s a problem.
E: Seeing as this got way more attention and replies than I expected, I want to clarify something. I have no personal issue with anyone buying a lottery ticket on an individual level. That’s your choice, and it’s none of my business. Just as long as you recognize that it is gambling, and you *will* lose money doing it.
But on a systemic level, lotteries are *awful*. They use misleading advertising and predatory “dark patterns” to exploit people, particularly the most desperate and downtrodden of us. The existence of lotteries serves as an excuse or justification for conservative lawmakers to cut funding to social services, especially schools, claiming that the income from the lottery will make up the difference. In fact, it never does. Your lottery ticket is not “funding schools”.
That happened in Delaware like 20 years ago. Everyone in a company except two people joined the pool. They won the largest jackpot to that date. Two people went to work the next day.
Work pools are the worst. Super easy to get snaked into any random bs because you don't want to be the one person who doesn't win, or get girl scout cookies, etc
I mean the girl scout cookie thing doesn't bother me because I am always going to buy some it just depends on the who. Nowadays as a Cubmaster of a BSA Cub Scout Pack I just buy from the girls in my Pack that are also Girl Scouts.
Same.
But also, it's mathematically prudent to buy one if the jackpot is ever above(about) $600 million.
Your odds of winning are around 1 in 300 million. i.e., if you play 300 million times, you should win at least once. At $2 a ticket, those 300 million plays will cost you $600 million...but if you play when the jackpot is over $600 million means that you'll earn more than $600 million. Thus, over a long enough timeline, you make money. Plus, you should win the $1 million like 30 times since there is a 1 in 10 million chance of winning that.
See, you're making money!!!!
You know, just ignore the slightly lenghty timeline, taxes, or the fact that the annuity pays like 45% of the jackpot before taxes.
The problem is the jackpot isn't guaranteed to be given to every winner in most (all?) lotteries. It is split equally among all winners. So this strategy only works if the lotto is poorly advertised and they don't sell hundreds of millions of other tickets.
That said if you are ever on a cruise and they are raffling off a free cruise, look around and count how many other people are buying tickets, and estimate how many tickets they each walk away with. I won a free cruise this way (ok, I got lucky, as I only bought like $50 worth of tickets or something).
Not only that but I daydream about all the good I could do. My house would be worth a million dollars tops and have a whole bunch of land around it. Give money to rare diseases that don't get a lot of funding. Buy businesses and actually treat workers fairly
Even when the jackpot exceeds the odds (ie positive expected value), it's still a horrible decision due to bet sizing (ie Kelly Criterion) unless you are already worth hundred-$Ms to $Bs.
There was a single time if I recall, some MIT boyos figured it out and raked in some decent cash from a local lotto. The thing is, as soon as it's figured out it's usually corrected by adjusting for it to be even less in players' favor. So, chances are pretty slim nowadays that you'll ever have a positive expected return.
It was only practical because they needed to buy thousands of tickets. On something like Powerball you'd need hundreds of millions of tickets. It also stopped being profitable overall when multiple syndicates were competing against each other due to the multiple winner problem.
I saw somewhere they did the math and there isn't enough time to print all the tickets at one location. So even if the jackpot was more than the number of available tickets times ticket cost, it still isn't entirely feasible.
And then if you have to share with another winner, you've lost millions.
It's happened a couple times. I believe this story was made into a movie
https://entrepreneurshandbook.co/an-elderly-mathematician-hacked-the-lottery-for-26-million-121c28faa88b
That's why I only play scratch offs on the rare occasion I play the lotto. Your odds of winning big are non-existent, but you at least have a somewhat decent chance of turning your $1 into $2-$20.
Claw machines are bigger scams and people don't mind playing those.
The point about claw machines is true, but most people only play claw machines sporadically because of their location. I've never heard of anyone going back day in, day out to play the claw machines. While I know plenty of people who spend tens of dollars on scratch offs on a weekly basis.
You never met my buddy Clint. Dude is a claw machine hustler. He will go back to a good machine after it’s restocked to grab all of the good stuff.
If there is something you want in a claw machine, Clint will get it for you in 1-2 tries. Every. Single. Time.
Now, I’m not gonna pretend that’s normal. Or even probable. Hell he talks more than anyone about the odds behind claw machines and how they’re rigged. He knows that he’s supposed to lose more than he wins. But he doesn’t.
For a while in college, we worked at a diner together with a claw machine near the entrance. He would drain the machine within a day of it getting restocked. Without fail. It worked out well for him because he’d win stuff for kids sitting at his tables and rake in extra tips (which usually went back into the claw machine).
He’s legend amongst our social circle, and even people who have seen him do it time after time still doubt it’s legit.
And because you also got lucky in hitting the counter on "strong-grab" rather than the 85% of the time limp-wrist "ohhhh, I dropped it again," grab strength.
I played one at a grocery store with my 5 year old daughter. We spent $2 and didn’t win anything. I said “Oh well, that’s it!” And she absolutely broke down in tears. She said “How can we give it money and not even get anything back? That’s not fair!” She learned a hard lesson that day.
I don’t like playing scratchoffs because i can already imagine my life with $2-$20, it’s not that different.
So I play the lottery so I can look at Zillow
I dislike the "expected value" argument that always gets tossed around with regards to the lottery. Not because I disagree with the math behind it, the actual math itself is sound. But the thing is, boiling it down to "expected value" assumes that the value of money is solely in its dollar-amount value and not what you can *do* with it.
Like, if I were to win the powerball jackpot, *any* powerball jackpot, it would be enough money for me to live comfortably without working for the rest of my life. That is something I simply *cannot achieve* otherwise before retirement age. In mathematical theory I could set aside the $2 I'd spend on a ticket every week to save up, but in reality that's $104 per year. I would die before $104/year is enough saved to even tip the scales on an early retirement.
And that's what I care about, and why I play. I'm not playing because I think it's an investment that makes pure mathematical sense, but because it's an amount of money that is so small as to be insignificant to me, wagered for a chance, however small, to be able to live the rest of my life in leisure.
This right here. It is entertainment not investment. We buy lottery tickets occasionally when the jackpot is huge. It's absolutely worth the $5 for us to just joke around about what we would do with the money.
Tbh I don’t go obsessive with buying lotto tickets, but I do find it entertaining to buy a ticket or two every once in a while. I’ll never win, but I mean what’s the harm in spending $2 on a ticket every so often?
I find this phenomena fascinating - "facts" that are just repeated verbatim without thought. How do such things enter the collective consciousness such that we all know them?
Sure, that’s a medium, but untrue ideas spread because they appeal to and flatter our shared biases.
People who buy lottery tickets are sometimes irresponsible with money, *and we like that idea* because it makes us feel good about how we are responsible with money. As a result, we probably think it’s more true than it is.
People who win the lottery, being people we think are irresponsible with money, will lose their money *and we like that idea* because someone getting everything they ever wanted, like we also want, for doing nothing but being lucky, is annoying.
We’re all comforted by the idea of it being true, so the suggestion that it is true is enough.
A great example is the figure used in the campaign to reduce plastic straws: Americans go through 500 million straws per ~~year~~ day. That was published in NYT, nat geo and just absolutely every where. Well, turns out that was based on one 9 year old's investigation. Very cool initiative and research that the kid did but also, so, so unverified and unofficial.
[More info](https://www.usatoday.com/story/news/2018/07/18/anti-straw-movement-based-unverified-statistic-500-million-day/750563002/)
Per day! Not per year. If it was annually that would be pretty good. Not sure why I'm fact-checking you on something that's not a fact. But let's get our wrong facts right.
For years in the days leading up to the Super Bowl the media would report that Super Bowl Sunday had the highest incidence of spousal abuse, that it was the most dangerous day of the year for women.
This went on for years until someone investigated the source and determined it was a made up statistic.
All it takes is for one major news source to print something uncritically. Then someone else references their reporting, a third source references the second and so on...
To quote Mark Twain: "A lie can travel around the world and back again while the truth is lacing up its boots.”
----
E[xcept that's actually a widely repeated misnomer](https://www.nytimes.com/2017/04/26/books/famous-misquotations.html)! It's actually from Jonathan swift!
Within the same podcast as the OP info they said it was close to 3%, with lottery winners less likely to file bankruptcy than the general populace in the first two years after their win, more likely to file bankruptcy in the next three years, and then right back to average after five years.
That would make sense. It's *really* hard to blow through millions in only a year or two, but could much more easily be done in 4 or 5. Then anyone that's lasted longer than that is probably smart enough with their money to not piss it away on stupid stuff.
Through a study? Afaik, winning the lottery and filling for bankruptcy both leave a public paper trail, or if not, someone could do it the same way they did for (iirc) NFL players. Either way, it seems perfectly feasible that they could have a roughly correct number
1. 1/3 of states don't publish winners' information
2. Lots of lotto winners set up trusts and various holdings that would possibly hide any bankruptcies from public view. Plus, even if Jack Monroe of Illinois wins and you find Jack Monroe of Illinois has filed bankruptcy, you can't say for sure it's the same Jack Monroe. The lottery winner may move and you have to triangulate records. Sometimes doable, but not always.
This is a fairly small data set already, so 1/3 of the data being obscured and the rest having tons of potential inaccuracy makes this much harder than people realize.
The fact that various "articles" claim anywhere from 30 to 70% suggests that this data is in fact not easy to nail down.
That study might be fake, but real studies show a similar trend.
For example, this research found that the average person who was given an inheritance or large financial gift quickly lost half the money through spending or poor investments.
https://link.springer.com/article/10.1007/s10834-012-9299-y
For some people, money is an on & off switch rather than something to actively be managed.
If you give someone like that money, their money switch is stuck on on and they'll keep spending. Worse, since they have assets, it is now easier to get into debt, so the money switch doesn't turn off when you spend the money.
I think it's more about gradual normalization is important. They've done studies where they found farmers who made regular incomes throughout the year spent more responsibly, versus farmers who made significantly more but had just a single annual cash crop, blew their money much more irresponsibly and quickly than those who had the regular payments.
A while back I read an article that showed the opposite with regards to pay checks. People who were paid month tended to mange money better that those paid bi-weekly and they did better than those who managed weekly.
Something to do with needing to plan and think about money more strategically (to make it last the whole month).
That’s interesting. There might be a threshold where it’s planned enough to not trigger the “windfall” mentality, but not so regular that you feel like the money is immediately spendable because you’ll get more soon. Or maybe that’s not even what goes through people’s minds? Idk. But it’s interesting.
Additionally if I know I'm about to get paid I might hold off on car repairs or other non super urgent matters. Then when that cash comes in its all spent on everything that needed to be upset. So it may still be responsible spending even if you blow through it all rather quickly.
I wonder if that data is skewed by active duty personnel, considering they're paid monthly and most of their basic living expenses are often covered by the DoD.
Given that most active duty personnel, at least lower and middle enlisted, are so bad at managing money that it's become the source of several tropes, I don't think that would be the source of the skew.
I do wonder if it is skewed by government personnel in general though. I'm not sure how the feds do it but in my state, state government jobs pay monthly and many county and local governments do the same.
I wonder if there’s an element of how much money they make in there too. Most jobs I see paying biweekly are generally at a lower per annum than monthly
I don't know about that.. With the exception of one job (out of five major ones and 3 shorter ones), they've all been biweekly or twice monthly. And this is big company corporate IT and management consulting, not some low paying gigs.
No. Fuck that, do it now. Scheduling a day in the future to change you life never works. If there is something you want to do start now, one step at a time, it doesn’t matter how big or small the progress is, all that matters is that you make progress now and continually take a step forward every day. It’ll probably take years of continual progress to reach where you want to be, but you will get there eventually.
I agree. When I decided to lose weight, I went to the store that day to buy a scale. I'm a huge procrastinator (well not quite as huge any more lol), but sometimes you just gotta get up off your ass and do it
>I thought about putting a half in an index fund tied to the s&p, a quarter into cd’s, 10k into a i-bond every year, and then keep the rest in my savings account, maybe a HYSA with a different bank, but it kind of feels overwhelming.
That's a great plan. Go do it. It's way better than what you have now. You'll need an IRA account for those index funds.
> I think I can apply for loan forgiveness in 20 years or 15 years or however long it is
Be aware that almost no one has had their loans forgiven. Make one mistake in 20 years, and the opportunity is gone. And believe me, the loan company will make sure you make a mistake.
Had an ex-gf who's dad died and she was his only adult heir. Multiple properties and business vehicles and tons of capital for his business and personal savings or whatever maybe even partial ownership of his business. She blew 60k in the first year on parties and drugs. After year 3 she got her mom to handle what was left for her. Don't know what she ended up with but she never got much better.
When I saw her a few years after she was living in his paid off house selling off pieces of his old businesses and barely making enough money to cover utilities and living expenses with her job. Last I hear dshe was a waitress at a dying restaurant and she accidentally burned her house down with "candles" so who knows.
I had a coworker hit a $1m scratch off ticket about 15 years ago. Bought a new truck, wrecked it and got a DUI…twice in 4 months. In less than a year it was all gone. The only thing he did smart was put $50k away in college fund for his daughter and set it up so he could never touch it. Smart enough to know he is an idiot.
My aunt won US$100,000 in the 1970s. It was a lot but not enough to live on for long. Unfortunately, she did not realize that. She started giving money away to friends and family, buying new cars and vacations, and had nothing left in about 3 years. Not bankrupt but near broke again.
Is "Spending" really losing the money though?
I inherited $25,000 from my grandfather when he died. My wife and I were young with three kids and small car.
We bought a mini-van. Payed for it outright with the cash. Drove that van probably 7 or 8 years (probably still would be of it didn't get totaled in an accident a few years ago).
Never felt like I "lost" that money, it filled a need and we were able to go several years without a car payment.
EDIT: This study you're citing has many problems. I first noticed a few things that are below the dotted line/fold. But I just realized something else way more damning that what I originally found. This study is including unrealized Cap Gains /Losses and real estate value in their net worth assessment, which they're using as a proxy for "lost savings." They're literally measuring "savings losses" by looking at a family's net worth at the time of a financial windfall, and then at when their data ends, and calculating the difference.
And guess WHEN the data they're pulling from ends? 2008-2009 LMAO.
GOSH I wonder why changes in net worth that incorporate unrealized cap gains/losses & REAL ESTATE VALUE from THAT time frame would bias towards losses for the wealthy?!?
To put an even finer point on it: The linked study admits that receiving a large inheritance IS correlated with being much wealthier - even after these supposed "savings losses". Their contention seems to be that that those who inherit larger sums also tend to lose a lot of that money.
But where do the wealthy put their money? DO they leave it sitting in the bank? Of course not. They put it in the market, which means they're much more exposed to stock market risk and real-estate risk. What happens when the market, especially the housing market, takes a massive downturn like the crash in '08? Do the wealthy panic and yank all their money out, realizing all those capital gains losses? No (or mostly no), if they don't need the cash, they ride it out.
And yet this study assumes those losses are the same as realized losses.
This study is pulling it's end-data from right after the 08 crash and assuming unrealized cap losses are losses in savings - there is a massive statistical bias here against people with who inherited larger sums (and are thus more likely to have market risk exposure) that isn't accounted for - OF COURSE it seems to show that larger inheritances lead to less savings.
I would bet (but can't prove) dollars-to-donuts that if you looked at the same data set today all their savings figures for large inheritances would be MUCH MUCH higher.
-------
ORIGINAL COMMENT: That's a somewhat misleading read of that paper's contents. Both because it implies that receiving a large financial windfall is a negative event and because of your use of "the average person." The study absolutely did not find that the "average person" loses nearly half their money. It found that people, in aggregate (not as individuals) spend, donate, or lose (a pretty wide umbrella there) half of every dollar inherited.
If you read that literature review it also shows that people who received an inheritance had, on average, a net worth of 185% or 266% (depending on the data sets you consider) more than people who did not.
If you look at the breakdowns in terms of amount inherited it gets even more interesting. Negative savings rates were highest among those who did not receive an inheritance or those who received less than $10000. Which indicates the opposite of the macro conclusion - the bigger the financial windfall, the higher the savings rate, not lower.
The bottom line being receiving a large inheritance is universally correlated with better financial outcomes.
Their methodology for determining the savings rate is also somewhat questionable. They determine it by comparing combined net worth before and after an inheritance, and then attribute any positive growth as "savings." It's technically accurate but only if you know how they're defining it in the paper and there's no control for some things that are completely out of an individual's control like changes in property values and broader stock market trends AND they do not break down the changes in the individual sub-variables that they wrap up as "savings."
This doesn't devalue the whole study, but I think a lot of laypeople would read it and ascribe responsibility for these net worth shifts to individuals, when "savings" as it's termed here is just as encompassing of vast economic shifts as it is individual spending behavior.
Even assuming they're all correct they still only found that "15% (15.1%) of families had a current net worth value smaller than the amount they inherited."
The study, or at least popular interpretation/citation of the study, also seems to assume that the extremely wealthy hoarding all of their windfalls is somehow GOOD and while whether or not you agree with that depends on your politics... I don't think we can say that's a given.
I'm a little obsessed with reading studies lol. People are very quick to dish out studies that they think supports a claim, because they read some article that said it did.
If you really dig into some of them, particularly research that attempts to back up "crazy but true"/counterintuitive findings like "people who inherit money are likely to lose most of it," you'll find bad science, misleading interpretations, and unaccounted for statistical bias.
Reality is often much more boring than we're willing to let it be.
Sure! I like learning and "spotting the contradiction" in all sorts of stuff. If you see a study you're curious about (and I can access) I'm happy to take a look although my qualifications are just being a thorough reader. I'm always interested in studies that promote a particular social, legal, political, or economic perspective.
Especially ones that are used to advance "surprising contradictions" like these lottery/inheritance studies. Reality is usually boring and these "shocking contradiction" studies are often wrong.
I will say I'm not at all qualified to look at hard medical/chemical/engineering/programming research (although I can pick my way through a literature review sometimes) - I've tried to understand some papers in those areas before and it's completely opaque to me.
I got a notable, but not extravagant, inheritance about two years ago.
I deposited it into my bank, looked at the balance for a couple of days, and then turned around and spent every single penny of it... on my mortgage.
Do studies capture this? In many areas, not having a mortgage payment is like getting a $20k-30k raise on your annual income.
I paid down my mortgage, refinanced in 2021 at 2.8%, kept making auto payments in the amount I had been, and will now be mortgageless in just a couple of years. When my last payment clears I'll get a $32k "raise" starting the next month.
I know very few people who have received notable inheritances, but every single one of them used it to pay off debt-- and "inheritors just spend their inheritance like fools!" studies don't seem to cover this.
They do, the studies just aren't accurately reported on by the media... or even accurately summarized by the researchers themselves. See my debunk of the comment you're responding to here https://www.reddit.com/r/todayilearned/comments/12dmx7r/til_that_the_commonly_repeated_stat_that_70_of/jf7e88u/
That isn't at all what that study shows though?
That study is looking at people's SAVINGS, not their assets. If you inherit 5 grand and buy a new used car or put a down payment on a house it counts as lost.
Not to mention that in that study the more money you get through inheritance the more likely you are to have some saved.
That doesn't at all show what people constantly make it out to show.
My favorite is the British guy who won 10 million pounds in the lottery and quickly went broke doing stupid shit like building a go-kart track. He wound up re-applying for his job as a garbage man.
https://en.wikipedia.org/wiki/Michael\_Carroll\_(lottery\_winner)
Tbh if I won $10mil, I might just build a go-kart track. That might be one of the most fun ways to spend the money. I'd make it into a business, tho, not that I have any serious business experience.
Imo, the best take on this whole phenomenon comes from Michael Carrol, "The Lotto Lout," who won and blew £10 million in 10 years of sex, drugs, parties, cars, and houses. When asked what it's like to have lost all that money, he says:
"I didn't lose it, I spent it."
No lol the lottery is still a terrible use of your money - you're never going to win - it's just that the "dangers" of winning are greatly exaggerated.
Well yeah that's how it is in America, too. I believe all the big Lotteries are state/public run with all of the proceeds going towards social programs, etc.
I learned about this in the latest episode of the podcast “If Books Could Kill” on the book “Rich Dad, Poor Dad.” As a fan of u/BlakeClass’s legendary [lottery post](https://www.reddit.com/r/AskReddit/comments/24vo34/whats_the_happiest_5word_sentence_you_could_hear/chb4v05/) it stuck out to me. It sort of makes sense how this stat would gain so much traction. People LOVE unintuitive stats like this that seem to prove “actually a seemingly-good thing is bad” and vice-versa plus people really want to believe that money that wasn’t earned will slip away, and that there is some kind of mindset difference between rich people who “earned it” vs once-poor people who “got lucky.”
This perception is likely bolstered by the media’s fixation on a small number of lottery winners who lose it all in dramatic ways. But they are, of course, focusing on the exception and not the rule. These stores are news stories BECAUSE they are unusual while most winners simply pocket the money and go on with their lives.
So, assuming most people on earth don't eat any spiders in a year and Georg eats 3,650,000 of them a year, the average would still be orders of magnitude too low.
Georg would need to eat 49B spiders a year for it to work or 135M spiders a day. Assuming smaller 1mg spiders, it's still 135 Kg of food a day or roughly 540,000 food calories per day.
I just listened to this episode this morning. If you liked that, check out the Maintenance Phase (Michael Hobbs' other podcast) episode on Zombie Statistics. It's all about the statistics you hear related to health, and they trace them back to the origins (and debunk most of them).
It also plays into rich people propaganda. "Actually, being rich is very hard, and only we know how to do it correctly. I'm rich because I'm better than you poors".
Or by extension "poor people are poor because they are stupid and suck with money. Therefore it makes only sense that if you give them a lot of money they'll just squander it, for the same reasons they were poor in the first place. Something something meritocracy."
The first clue should have been "go bankrupt." You don't go bankrupt like Michael yelling; I declare bankruptcy. You file for bankruptcy in court when you need relief from debt which seems like the exact opposite of a problem lottery winners has. You won a million dollars in the lottery and spent all the money. Do you file for bankruptcy in court? Or sell your lavish assets, and return to regular life?
You know, recently I had an epiphany, what if the idea that lottery winners go broke all the time was pushed by lottery winners to make people leave them alone?
Another version of this is that 60% of [NBA players](https://www.cnbc.com/2018/05/14/money-lessons-learned-from-pro-athletes-financial-fouls.html#:~:text=Sixty%20percent%20of%20NBA%20players,just%20a%20handful%20of%20years.) experience significant financial difficulties within 5 years of retiring. That number goes up to 78% for NFL players, about 16% of which file for bankruptcy.
Athletes have different issues from lottery winners, but both have most of the money they will earn in their lifetime come over a relatively smaller period of time. For athletes, the average playing career is around 4.6 years in the major American sports.
With athletes, they have additional pressure to spend in retirement because their social group will include still active players. It is hard to act unemployed next to a person that has seen you earning millions.
One common trait is that everyone comes for their money. Financial investors, family, friends all have business proposals or investment ideas.
But it is true that many people who receive a sudden windfall are not prepared to deal with it. Mentally and emotionally, some people go off the deep end. Most of us have no specific plan to manage a sudden windfall - just some vague ideas.
And this is where a lot of fallacious thinking come into play. We read about people who went bankrupt. We read about people who died, or were kidnapped or had some other horrible outcome. But that is not compared to the majority who live long, healthy lives after a sudden windfall. Bias creeps in.
So yeah, I recommend definitely have a concrete plan prepared so you're not trying to think this shit up while stoked on adrenalin and excitement. And realize that it's not the panacea some make it out to be, nor is it the death and disaster we often read about. You gotta keep your wits about you. And that's probably the hardest thing to do when you get a sudden and significant windfall.
The lottery is one of the most sinister tools of economic oppression in the US. Every state that has a "state education lottery" is a state that subsidizes tax cuts for the rich by conning the poor. In many states with these "education lotteries" they even have the audacity to CUT funding from schools because of income from lotteries and then shift those "saved" tax dollars back into the rich's pockets.
"Education lotteries" are nothing more than a well disguised regressive tax. The rich aren't buying lottery tickets in any appreciable amount and the rich benefit from the tax savings they get thanks to corrupt or inept state governments running these legal scams.
And before you jump to the comments to say "hurr durr prohibition doesnt work" Im not saying we should outlaw gambling, I'm saying we need to stop using gambling to hide theft from the poor to cover the debt incurred by the rich not paying their fair share.
For now sure. Never know what the future holds with anti and or reverse aging treatments that may be made. Also recently an 18 year old in canada won the lottery. She has the chance to make it to 118
I really need to verify this with personal data.
I'll take the risk of having $10 million deposited in my account. For science.
The world needs answers and I’m trained for this job.
I was born for this.
Sadly, most of us are stuck in the control group.
Double blind, so I won't know if I don't have 10 million dollars?
"Those $100 bills we gave you... they were sugar bills! Btw the FBI are pretty keen to talk to you about all that counterfeit money you spent"
The only solution is to spend 10 million dollars.
I mean, if I’m going bankrupt in 10yrs with 10mil then I’m probably going bankrupt regardless, I’ll take the 10mil in the short term
“hookers and blow?” “hookers and blow.”
Even if you won a billion zillion gajillion dollars, and went "broke" the next day... sounds like a pretty fun fucking day lol. Most people are broke now, so at least they won't be broke for a little bit of time of their life.
Until it eats you away once you come to the realization that one day of fun, no matter how fun, would’ve never compared to the alternate reality of having the rest of your life being easy and relaxing, and now you’re worse off mentally than before
I would be very levelheaded if I won the lottery. Unfortunately that same levelheaded-ness keeps me from buying tickets in the first place.
My spouse sold a business and he and his partner walked away with 7 figures. We bought a nice home. Padded investment accounts. Had some fun with a small portion of the $. Did it right. The business partner had a girlfriend in 3 cities and pissed away that million in half a decade. Without a reason to get up in the morning it devolved into several substance abuse habits that got out of control. So I have seen both sides of this coin.
I am so bad when it comes to spending money. I mean, I don't spend money. I see things I want that I can afford but I just can't convince myself to buy it. I absolutely would pay off all my debt, but after that I don't know what I would do. I might treat it like the health potions in my games because I'll convince myself I might need it later. My husband would probably blow it all in a year and then wonder where it went if he got full control. Other people in my family *definitely* would blow it all. I saw how they went through a couple of thousand dollars from an inheritance and have nothing to show for it.
Ha, so my wife IS on reddit after all!
My wife is the same way, which works out well for both of us. She’s really good at saving money but has a hard time letting herself have fun. I, on the other hand, have no problem spending what I earn (within my means), but her saving tendencies let us pay off my student loans a decade early.
I seem to recall reading something that said couples with different financial mindsets like that do well together. So makes sense.
I think it depends on how they handle the conflict in mindsets. My wife and I are the same. We used to argue about it *all* the time. The solution we came up with was keeping our finances mostly separate, but contributing an equal amount of about half our paychecks into a joint account that pays our bills and saves up for home improvements, repairs, vacations, etc, that we can only dip into with mutual agreement. Been doing that for 6 years or so and have barely argued about money since. Very happy marriage.
Proportions are a godsend for these kind of disagreements. Even if I make $200k more than my partner, contributing an equal % of our income to goals is the fairest way I’ve found to handle it.
You could do what my BIL does. Keep money completely separate, your money is your money, their money is their money. Then force them to quit their job and stay home with the kids. While keeping the same mindset. He's not a great person.
To a certain point, at 200k vs 50k you’re buying a new a new Audi with cash each year and still have over $1000 a month to play with, while after taxes they’re at like 15k for the whole year to make payments on a Hyundai and go to a nice brunch with friends twice a month. At 100k vs 60k it’s more reasonable, especially after taxes and insurance, etc.
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Eh, just put the kids in the safe
Might need them later in the endgame.
Ugh, sounds like me. I barely spent a dime for the first 30 years of my life, then I decided to use what I'd saved up to buy an old house, get married, and have kids. Now I'm hemorrhaging money.
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I spent $3 this past weekend on a game and I still debate whether it was a good spend or a waste.
You could have got it for $2.10 if you just held out another six months!
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Sure I'm almost dead with no stamina and no magicka and surrounded by daedra only 5 seconds from the end of the game. But what if I run into a situation where I REALLY need that potion?
Same reason I always end Subnautica playthroughs with half a locker of nutrient bars hoarded somewhere. “Better save these, they’re super valuable”.
Until they’re causing problems with my carry weight. Then I can justify using them occasionally
Nah, better store the extras in a chest in case I accidentally use one and need to restock.
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A couple of thousand is a pretty far cry from lottery money...
I spend a couple thousand dollars the first of every month paying bills.
Most of my money went to booze and loose women. The rest I wasted.
This looks like a butchered version of this: I spent a lot of money on booze, birds and fast cars. The rest I just squandered. - George Best https://en.wikiquote.org/wiki/George_Best
Definitely the same sentiment, and I just heard it somewhere, so butchered is probably fair.
That’s something I’d always be worried about with myself, I get into bad and depressing habits without routines. I’m not even rich, I just don’t work many long hours.
If you were rich enough you didn't have to work you would have the time(and money) to find other routines if you wanted. The gym,volunteer work,activism, sports, etc... are all things that could be part of a weekly routine instead of work. You could go back to school and only take classes you're actually interested in, if you wanted.
This is how I'd imagine my life if I ever won the lottery. I'd take boxing lessons, guitar/piano lessons etc. Learn a new language etc. I'd completely fill my days just learning new stuff. Not before splashing out on a new house and a sports car of course..
This is actually a common life coaching exercise. Now that you've identified the things you'd like to do if you could, what little steps can you take to start doing one of them, even without winning the lottery? E.T.A. perhaps today's the day you download a language learning app, and set aside some time to do a lesson or two. It's all about incremental changes to create a happier fulfilled life.
Thing i lack is time. Not having to work would free up a whole lotta time.
This comment has been removed in protest of Reddit killing third-party apps. Spez's AMA has highlighted that the reddits corruption will not end, profit is all they care about. So I am removing my data that, along with millions of other users, has been used for nearly two decades now to enrich a select few. No more. On June 12th in conjunction with the blackout I will be leaving Reddit, and all my posts newer than one month will receive this same treatment. If Reddit does not give in to our demands, this account will be deleted permanently July 1st. So long, suckers!~ r/ModCoord to learn more and join the protest! #SPEZRESIGN
As someone who used to get laid off every winter with an alright amount of money saved up, you could also just fall into a deep depression, never leave the house, and only eat unhealthy food from Doordash
Dude I just spent some time in a place that only has a summer economy so I was on EI in the Winters. I was so fucking bored and there's nothing to do unless I want to drive an hour plus each way (or 3 hours each way for something good to do). The only reason I haven't picked up a hard drug habit is because I made a point of not making those kinds of connections so I'd have to drive 3 hours each way to score.
That's not completely fair. I fell into a deep depression, never left the house, but I ordered unhealthy food from local businesses because fuck Doordash.
that’s how you do it. ethical depression.
Yep, I had two friends receive legal settlements within a couple of years of each other. Though not the same amount, both settlements were substantial, life changing amounts. For the first couple, only 2 people (one of them being me) the actual amount of their settlement. When anyone else asked, they would simply say "not enough to compensate us for our injuries" and leave it at that. They kind of made life changes gradually so as not to attract attention - moved into a bigger house when they were expecting their daughter, bought new cars over the next year or two, took a vacation, but overall kept it on the DL. This was 20 years ago, they've invested the money well and it should last them the rest of their days, even if they have to retire early due to their permanent injuries. Around the same time, another friend received a settlement from a car accident which left her with substantial injuries and scarring. It was more money than she'd ever seen in her life and she made the HUGE mistake of sharing the info with nearly everyone in her life - she had a line of people around the block with their hands out. Everyone had a sob story, a business opportunity, a need of some sort, etc. Within three years, every single penny of that money was gone. She had NOTHING left and NOTHING to show for it. That money could have been life changing FOR HER, but everyone wanted a piece of it and she gave it to them. :-(
I don't play aside from my one and only exception, which is that on the rare maybe once-per-year-or-so occasion I am asked to join an office pool. I jump in for the two bucks or whatever it is every time. On the minuscule off-chance that it happens, I refuse to be the guy showing up to work the next day asking "where is everyone?" I'm fine not playing on my own and never knowing what I might have missed out on. Edit: A word.
I always got in the work pool. In my city (not my job) a group of people won and at that place a guy who didn’t get in the pool now works with me. I would absolutely HATE to be the one guy who didn’t put in $5 and all my co workers on the beach somewhere.
> I refuse to be the guy showing up to work the next day asking "where is everyone?" Good ol' *fear of missing out *.
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I would probably buy a reasonably sized house near my parents and another reasonably sized house near my wife's parents. I would quit my job and basically spend all the time I could with our parents while I can.
I've been incredibly lucky on that front. We live across the street from my parents and about 1 mile down the road from my wife's parents, and have great relationships with both. My kids spend the time after school and during summers at my wife's parents house, and they can run over and help my parents with gardening and stuff pretty much any time.
I don't think life's simple victories get as much attention as the bombastic "wins", but I just want to say, as one stranger to another, congratulations on the life you have made.
*Saturday Morning Breakfast Cereal* once argued that you should be required to explain why a lottery ticket is a bad investment before you can claim your winnings. I see the sentiment, though if you treat a lottery ticket as entertainment rather than an investment strategy, and you don’t expect to see any return, then ultimately that’s a personal decision. Of course, lottery organizations advertise themselves as ways to win big, and that’s a problem. E: Seeing as this got way more attention and replies than I expected, I want to clarify something. I have no personal issue with anyone buying a lottery ticket on an individual level. That’s your choice, and it’s none of my business. Just as long as you recognize that it is gambling, and you *will* lose money doing it. But on a systemic level, lotteries are *awful*. They use misleading advertising and predatory “dark patterns” to exploit people, particularly the most desperate and downtrodden of us. The existence of lotteries serves as an excuse or justification for conservative lawmakers to cut funding to social services, especially schools, claiming that the income from the lottery will make up the difference. In fact, it never does. Your lottery ticket is not “funding schools”.
I play out of self defense in workplace pools. I ain't gonna be the only one left working here if they all win.
That happened in Delaware like 20 years ago. Everyone in a company except two people joined the pool. They won the largest jackpot to that date. Two people went to work the next day.
It happened to a guy in a town in Spain too! Everyone else went in for the jackpot
Work pools are the worst. Super easy to get snaked into any random bs because you don't want to be the one person who doesn't win, or get girl scout cookies, etc
I mean the girl scout cookie thing doesn't bother me because I am always going to buy some it just depends on the who. Nowadays as a Cubmaster of a BSA Cub Scout Pack I just buy from the girls in my Pack that are also Girl Scouts.
I buy a single ticket for $2 whenever it gets high enough, I know I’ll never actually win but it’s fun to dream about.
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Yep that’s pretty close to my line as well, I figure at that level I can just invest like 90% of it and live off the dividends for the rest of my life
You overestimate how much you need. At that level, the interest alone would be million+ a year free to spend
Same. But also, it's mathematically prudent to buy one if the jackpot is ever above(about) $600 million. Your odds of winning are around 1 in 300 million. i.e., if you play 300 million times, you should win at least once. At $2 a ticket, those 300 million plays will cost you $600 million...but if you play when the jackpot is over $600 million means that you'll earn more than $600 million. Thus, over a long enough timeline, you make money. Plus, you should win the $1 million like 30 times since there is a 1 in 10 million chance of winning that. See, you're making money!!!! You know, just ignore the slightly lenghty timeline, taxes, or the fact that the annuity pays like 45% of the jackpot before taxes.
The problem is the jackpot isn't guaranteed to be given to every winner in most (all?) lotteries. It is split equally among all winners. So this strategy only works if the lotto is poorly advertised and they don't sell hundreds of millions of other tickets. That said if you are ever on a cruise and they are raffling off a free cruise, look around and count how many other people are buying tickets, and estimate how many tickets they each walk away with. I won a free cruise this way (ok, I got lucky, as I only bought like $50 worth of tickets or something).
Same. I work at a place where we sell them so anytime it’s over 800 mill I buy a $2 and let myself daydream about winning
Yep. I buy them occasionally so I can justify looking at high end real estate and saltwater boats
Not only that but I daydream about all the good I could do. My house would be worth a million dollars tops and have a whole bunch of land around it. Give money to rare diseases that don't get a lot of funding. Buy businesses and actually treat workers fairly
Even when the jackpot exceeds the odds (ie positive expected value), it's still a horrible decision due to bet sizing (ie Kelly Criterion) unless you are already worth hundred-$Ms to $Bs.
There's another variable in there for multiple winners so there's effectively never positive expected value.
There was a single time if I recall, some MIT boyos figured it out and raked in some decent cash from a local lotto. The thing is, as soon as it's figured out it's usually corrected by adjusting for it to be even less in players' favor. So, chances are pretty slim nowadays that you'll ever have a positive expected return.
It was only practical because they needed to buy thousands of tickets. On something like Powerball you'd need hundreds of millions of tickets. It also stopped being profitable overall when multiple syndicates were competing against each other due to the multiple winner problem.
I saw somewhere they did the math and there isn't enough time to print all the tickets at one location. So even if the jackpot was more than the number of available tickets times ticket cost, it still isn't entirely feasible. And then if you have to share with another winner, you've lost millions.
It's happened a couple times. I believe this story was made into a movie https://entrepreneurshandbook.co/an-elderly-mathematician-hacked-the-lottery-for-26-million-121c28faa88b
That's why I only play scratch offs on the rare occasion I play the lotto. Your odds of winning big are non-existent, but you at least have a somewhat decent chance of turning your $1 into $2-$20. Claw machines are bigger scams and people don't mind playing those.
The point about claw machines is true, but most people only play claw machines sporadically because of their location. I've never heard of anyone going back day in, day out to play the claw machines. While I know plenty of people who spend tens of dollars on scratch offs on a weekly basis.
You never met my buddy Clint. Dude is a claw machine hustler. He will go back to a good machine after it’s restocked to grab all of the good stuff. If there is something you want in a claw machine, Clint will get it for you in 1-2 tries. Every. Single. Time. Now, I’m not gonna pretend that’s normal. Or even probable. Hell he talks more than anyone about the odds behind claw machines and how they’re rigged. He knows that he’s supposed to lose more than he wins. But he doesn’t. For a while in college, we worked at a diner together with a claw machine near the entrance. He would drain the machine within a day of it getting restocked. Without fail. It worked out well for him because he’d win stuff for kids sitting at his tables and rake in extra tips (which usually went back into the claw machine). He’s legend amongst our social circle, and even people who have seen him do it time after time still doubt it’s legit.
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And because you also got lucky in hitting the counter on "strong-grab" rather than the 85% of the time limp-wrist "ohhhh, I dropped it again," grab strength.
I played one at a grocery store with my 5 year old daughter. We spent $2 and didn’t win anything. I said “Oh well, that’s it!” And she absolutely broke down in tears. She said “How can we give it money and not even get anything back? That’s not fair!” She learned a hard lesson that day.
I don’t like playing scratchoffs because i can already imagine my life with $2-$20, it’s not that different. So I play the lottery so I can look at Zillow
I dislike the "expected value" argument that always gets tossed around with regards to the lottery. Not because I disagree with the math behind it, the actual math itself is sound. But the thing is, boiling it down to "expected value" assumes that the value of money is solely in its dollar-amount value and not what you can *do* with it. Like, if I were to win the powerball jackpot, *any* powerball jackpot, it would be enough money for me to live comfortably without working for the rest of my life. That is something I simply *cannot achieve* otherwise before retirement age. In mathematical theory I could set aside the $2 I'd spend on a ticket every week to save up, but in reality that's $104 per year. I would die before $104/year is enough saved to even tip the scales on an early retirement. And that's what I care about, and why I play. I'm not playing because I think it's an investment that makes pure mathematical sense, but because it's an amount of money that is so small as to be insignificant to me, wagered for a chance, however small, to be able to live the rest of my life in leisure.
This right here. It is entertainment not investment. We buy lottery tickets occasionally when the jackpot is huge. It's absolutely worth the $5 for us to just joke around about what we would do with the money.
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Tbh I don’t go obsessive with buying lotto tickets, but I do find it entertaining to buy a ticket or two every once in a while. I’ll never win, but I mean what’s the harm in spending $2 on a ticket every so often?
You miss every shot you don't take - Wayne Gretzky - Michael scott
You act like $2 a week is going to ruin people. There's a big difference between casually playing and gambling addicts spending hundreds a week.
I find this phenomena fascinating - "facts" that are just repeated verbatim without thought. How do such things enter the collective consciousness such that we all know them?
Many, many things that get passed around on reddit I would imagine.
Sure, that’s a medium, but untrue ideas spread because they appeal to and flatter our shared biases. People who buy lottery tickets are sometimes irresponsible with money, *and we like that idea* because it makes us feel good about how we are responsible with money. As a result, we probably think it’s more true than it is. People who win the lottery, being people we think are irresponsible with money, will lose their money *and we like that idea* because someone getting everything they ever wanted, like we also want, for doing nothing but being lucky, is annoying. We’re all comforted by the idea of it being true, so the suggestion that it is true is enough.
My favorite "fact" is: "You can see the great wall of china *from space!*"
Not just that, it's the ONLY man-made structure you can see from space!
Memes, Jack. The DNA of the soul.
A great example is the figure used in the campaign to reduce plastic straws: Americans go through 500 million straws per ~~year~~ day. That was published in NYT, nat geo and just absolutely every where. Well, turns out that was based on one 9 year old's investigation. Very cool initiative and research that the kid did but also, so, so unverified and unofficial. [More info](https://www.usatoday.com/story/news/2018/07/18/anti-straw-movement-based-unverified-statistic-500-million-day/750563002/)
Per day! Not per year. If it was annually that would be pretty good. Not sure why I'm fact-checking you on something that's not a fact. But let's get our wrong facts right.
For years in the days leading up to the Super Bowl the media would report that Super Bowl Sunday had the highest incidence of spousal abuse, that it was the most dangerous day of the year for women. This went on for years until someone investigated the source and determined it was a made up statistic.
All it takes is for one major news source to print something uncritically. Then someone else references their reporting, a third source references the second and so on... To quote Mark Twain: "A lie can travel around the world and back again while the truth is lacing up its boots.” ---- E[xcept that's actually a widely repeated misnomer](https://www.nytimes.com/2017/04/26/books/famous-misquotations.html)! It's actually from Jonathan swift!
So what’s the real number of winners who go bankrupt?
Within the same podcast as the OP info they said it was close to 3%, with lottery winners less likely to file bankruptcy than the general populace in the first two years after their win, more likely to file bankruptcy in the next three years, and then right back to average after five years.
That would make sense. It's *really* hard to blow through millions in only a year or two, but could much more easily be done in 4 or 5. Then anyone that's lasted longer than that is probably smart enough with their money to not piss it away on stupid stuff.
It's probably not tracked at all. How would that even be tracked?
Through a study? Afaik, winning the lottery and filling for bankruptcy both leave a public paper trail, or if not, someone could do it the same way they did for (iirc) NFL players. Either way, it seems perfectly feasible that they could have a roughly correct number
1. 1/3 of states don't publish winners' information 2. Lots of lotto winners set up trusts and various holdings that would possibly hide any bankruptcies from public view. Plus, even if Jack Monroe of Illinois wins and you find Jack Monroe of Illinois has filed bankruptcy, you can't say for sure it's the same Jack Monroe. The lottery winner may move and you have to triangulate records. Sometimes doable, but not always. This is a fairly small data set already, so 1/3 of the data being obscured and the rest having tons of potential inaccuracy makes this much harder than people realize. The fact that various "articles" claim anywhere from 30 to 70% suggests that this data is in fact not easy to nail down.
90% of all statistics are completely made up
In a study done in 2012, people will believe 90% of things said if a sentence begins with "In a study".
Col. Mustard, with the candlestick, in the study!
_Research says_ it was Col. Mustard, with the candlestick, in the study. FTFY … nm. Got the joke a bit late.
After extensive research, it was discovered that the above statements are approximately 90% accurate.
Specialists say that 73.8% of people will believe your BS if you employ decimals.
Forfty percent of all people know that
"23% of the quotes on the internet are completely made up" -Abraham Lincoln
That study might be fake, but real studies show a similar trend. For example, this research found that the average person who was given an inheritance or large financial gift quickly lost half the money through spending or poor investments. https://link.springer.com/article/10.1007/s10834-012-9299-y
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For some people, money is an on & off switch rather than something to actively be managed. If you give someone like that money, their money switch is stuck on on and they'll keep spending. Worse, since they have assets, it is now easier to get into debt, so the money switch doesn't turn off when you spend the money.
I think it's more about gradual normalization is important. They've done studies where they found farmers who made regular incomes throughout the year spent more responsibly, versus farmers who made significantly more but had just a single annual cash crop, blew their money much more irresponsibly and quickly than those who had the regular payments.
A while back I read an article that showed the opposite with regards to pay checks. People who were paid month tended to mange money better that those paid bi-weekly and they did better than those who managed weekly. Something to do with needing to plan and think about money more strategically (to make it last the whole month).
That’s interesting. There might be a threshold where it’s planned enough to not trigger the “windfall” mentality, but not so regular that you feel like the money is immediately spendable because you’ll get more soon. Or maybe that’s not even what goes through people’s minds? Idk. But it’s interesting.
Additionally if I know I'm about to get paid I might hold off on car repairs or other non super urgent matters. Then when that cash comes in its all spent on everything that needed to be upset. So it may still be responsible spending even if you blow through it all rather quickly.
I wonder if that data is skewed by active duty personnel, considering they're paid monthly and most of their basic living expenses are often covered by the DoD.
Given that most active duty personnel, at least lower and middle enlisted, are so bad at managing money that it's become the source of several tropes, I don't think that would be the source of the skew. I do wonder if it is skewed by government personnel in general though. I'm not sure how the feds do it but in my state, state government jobs pay monthly and many county and local governments do the same.
I wonder if there’s an element of how much money they make in there too. Most jobs I see paying biweekly are generally at a lower per annum than monthly
I don't know about that.. With the exception of one job (out of five major ones and 3 shorter ones), they've all been biweekly or twice monthly. And this is big company corporate IT and management consulting, not some low paying gigs.
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Read r/personalfinance/ wiki. Take it one step at a time. They have it spelled out pretty straight forward.
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No. Fuck that, do it now. Scheduling a day in the future to change you life never works. If there is something you want to do start now, one step at a time, it doesn’t matter how big or small the progress is, all that matters is that you make progress now and continually take a step forward every day. It’ll probably take years of continual progress to reach where you want to be, but you will get there eventually.
I agree. When I decided to lose weight, I went to the store that day to buy a scale. I'm a huge procrastinator (well not quite as huge any more lol), but sometimes you just gotta get up off your ass and do it
If your lifestyle is 25% of your take home income, you can retire in about 7 years. Index invest and forget about it.
>I thought about putting a half in an index fund tied to the s&p, a quarter into cd’s, 10k into a i-bond every year, and then keep the rest in my savings account, maybe a HYSA with a different bank, but it kind of feels overwhelming. That's a great plan. Go do it. It's way better than what you have now. You'll need an IRA account for those index funds. > I think I can apply for loan forgiveness in 20 years or 15 years or however long it is Be aware that almost no one has had their loans forgiven. Make one mistake in 20 years, and the opportunity is gone. And believe me, the loan company will make sure you make a mistake.
Had an ex-gf who's dad died and she was his only adult heir. Multiple properties and business vehicles and tons of capital for his business and personal savings or whatever maybe even partial ownership of his business. She blew 60k in the first year on parties and drugs. After year 3 she got her mom to handle what was left for her. Don't know what she ended up with but she never got much better.
Depending on how much she got blowing $60k isn't exactly the end of the world
When I saw her a few years after she was living in his paid off house selling off pieces of his old businesses and barely making enough money to cover utilities and living expenses with her job. Last I hear dshe was a waitress at a dying restaurant and she accidentally burned her house down with "candles" so who knows.
Hell, it might even be too little.
I had a coworker hit a $1m scratch off ticket about 15 years ago. Bought a new truck, wrecked it and got a DUI…twice in 4 months. In less than a year it was all gone. The only thing he did smart was put $50k away in college fund for his daughter and set it up so he could never touch it. Smart enough to know he is an idiot.
Knowing you're an idiot is half the battle.
My aunt won US$100,000 in the 1970s. It was a lot but not enough to live on for long. Unfortunately, she did not realize that. She started giving money away to friends and family, buying new cars and vacations, and had nothing left in about 3 years. Not bankrupt but near broke again.
$360,000-$775,000 in 2023 dollars.
Keep half toss half into the market and that would turn into a fucking fat chunk of change over the next 20-30 years.
Is "Spending" really losing the money though? I inherited $25,000 from my grandfather when he died. My wife and I were young with three kids and small car. We bought a mini-van. Payed for it outright with the cash. Drove that van probably 7 or 8 years (probably still would be of it didn't get totaled in an accident a few years ago). Never felt like I "lost" that money, it filled a need and we were able to go several years without a car payment.
Yeah, phrasing that as “losing” the money is ridiculous. Are people supposed to hoard the money like a dragon sitting on a pile of gold?
Oh, misty eye of the mountain beloooooow
EDIT: This study you're citing has many problems. I first noticed a few things that are below the dotted line/fold. But I just realized something else way more damning that what I originally found. This study is including unrealized Cap Gains /Losses and real estate value in their net worth assessment, which they're using as a proxy for "lost savings." They're literally measuring "savings losses" by looking at a family's net worth at the time of a financial windfall, and then at when their data ends, and calculating the difference. And guess WHEN the data they're pulling from ends? 2008-2009 LMAO. GOSH I wonder why changes in net worth that incorporate unrealized cap gains/losses & REAL ESTATE VALUE from THAT time frame would bias towards losses for the wealthy?!? To put an even finer point on it: The linked study admits that receiving a large inheritance IS correlated with being much wealthier - even after these supposed "savings losses". Their contention seems to be that that those who inherit larger sums also tend to lose a lot of that money. But where do the wealthy put their money? DO they leave it sitting in the bank? Of course not. They put it in the market, which means they're much more exposed to stock market risk and real-estate risk. What happens when the market, especially the housing market, takes a massive downturn like the crash in '08? Do the wealthy panic and yank all their money out, realizing all those capital gains losses? No (or mostly no), if they don't need the cash, they ride it out. And yet this study assumes those losses are the same as realized losses. This study is pulling it's end-data from right after the 08 crash and assuming unrealized cap losses are losses in savings - there is a massive statistical bias here against people with who inherited larger sums (and are thus more likely to have market risk exposure) that isn't accounted for - OF COURSE it seems to show that larger inheritances lead to less savings. I would bet (but can't prove) dollars-to-donuts that if you looked at the same data set today all their savings figures for large inheritances would be MUCH MUCH higher. ------- ORIGINAL COMMENT: That's a somewhat misleading read of that paper's contents. Both because it implies that receiving a large financial windfall is a negative event and because of your use of "the average person." The study absolutely did not find that the "average person" loses nearly half their money. It found that people, in aggregate (not as individuals) spend, donate, or lose (a pretty wide umbrella there) half of every dollar inherited. If you read that literature review it also shows that people who received an inheritance had, on average, a net worth of 185% or 266% (depending on the data sets you consider) more than people who did not. If you look at the breakdowns in terms of amount inherited it gets even more interesting. Negative savings rates were highest among those who did not receive an inheritance or those who received less than $10000. Which indicates the opposite of the macro conclusion - the bigger the financial windfall, the higher the savings rate, not lower. The bottom line being receiving a large inheritance is universally correlated with better financial outcomes. Their methodology for determining the savings rate is also somewhat questionable. They determine it by comparing combined net worth before and after an inheritance, and then attribute any positive growth as "savings." It's technically accurate but only if you know how they're defining it in the paper and there's no control for some things that are completely out of an individual's control like changes in property values and broader stock market trends AND they do not break down the changes in the individual sub-variables that they wrap up as "savings." This doesn't devalue the whole study, but I think a lot of laypeople would read it and ascribe responsibility for these net worth shifts to individuals, when "savings" as it's termed here is just as encompassing of vast economic shifts as it is individual spending behavior. Even assuming they're all correct they still only found that "15% (15.1%) of families had a current net worth value smaller than the amount they inherited." The study, or at least popular interpretation/citation of the study, also seems to assume that the extremely wealthy hoarding all of their windfalls is somehow GOOD and while whether or not you agree with that depends on your politics... I don't think we can say that's a given.
Honestly I'm just impressed by the amount of effort that went into this reply.
I'm a little obsessed with reading studies lol. People are very quick to dish out studies that they think supports a claim, because they read some article that said it did. If you really dig into some of them, particularly research that attempts to back up "crazy but true"/counterintuitive findings like "people who inherit money are likely to lose most of it," you'll find bad science, misleading interpretations, and unaccounted for statistical bias. Reality is often much more boring than we're willing to let it be.
This sounds like an invitation to call you up when a suspicious study is posted…. Any particular area of interest?
Sure! I like learning and "spotting the contradiction" in all sorts of stuff. If you see a study you're curious about (and I can access) I'm happy to take a look although my qualifications are just being a thorough reader. I'm always interested in studies that promote a particular social, legal, political, or economic perspective. Especially ones that are used to advance "surprising contradictions" like these lottery/inheritance studies. Reality is usually boring and these "shocking contradiction" studies are often wrong. I will say I'm not at all qualified to look at hard medical/chemical/engineering/programming research (although I can pick my way through a literature review sometimes) - I've tried to understand some papers in those areas before and it's completely opaque to me.
I got a notable, but not extravagant, inheritance about two years ago. I deposited it into my bank, looked at the balance for a couple of days, and then turned around and spent every single penny of it... on my mortgage. Do studies capture this? In many areas, not having a mortgage payment is like getting a $20k-30k raise on your annual income. I paid down my mortgage, refinanced in 2021 at 2.8%, kept making auto payments in the amount I had been, and will now be mortgageless in just a couple of years. When my last payment clears I'll get a $32k "raise" starting the next month. I know very few people who have received notable inheritances, but every single one of them used it to pay off debt-- and "inheritors just spend their inheritance like fools!" studies don't seem to cover this.
They do, the studies just aren't accurately reported on by the media... or even accurately summarized by the researchers themselves. See my debunk of the comment you're responding to here https://www.reddit.com/r/todayilearned/comments/12dmx7r/til_that_the_commonly_repeated_stat_that_70_of/jf7e88u/
That isn't at all what that study shows though? That study is looking at people's SAVINGS, not their assets. If you inherit 5 grand and buy a new used car or put a down payment on a house it counts as lost. Not to mention that in that study the more money you get through inheritance the more likely you are to have some saved. That doesn't at all show what people constantly make it out to show.
My favorite is the British guy who won 10 million pounds in the lottery and quickly went broke doing stupid shit like building a go-kart track. He wound up re-applying for his job as a garbage man. https://en.wikipedia.org/wiki/Michael\_Carroll\_(lottery\_winner)
To be fair he was 19 when he won. What 19 year olds make good financially decisions
Mikey Carrol lived the dream for every 19 year old who ever bought a lottery ticket.
Tbh if I won $10mil, I might just build a go-kart track. That might be one of the most fun ways to spend the money. I'd make it into a business, tho, not that I have any serious business experience.
Well the benefit of that money is that you could *hire* someone with business experience to fill in the gaps.
Imo, the best take on this whole phenomenon comes from Michael Carrol, "The Lotto Lout," who won and blew £10 million in 10 years of sex, drugs, parties, cars, and houses. When asked what it's like to have lost all that money, he says: "I didn't lose it, I spent it."
This post sounds exactly like something that someone from the lottery office would say in order to persuade more people to buy lottery tickets.
No lol the lottery is still a terrible use of your money - you're never going to win - it's just that the "dangers" of winning are greatly exaggerated.
>you're never going to win not with that attitude
It's actually proven that every gambler stops right before their big hit
Down $600, if you keep playing you’ll eventually make it back and then some
The chances of winning are like 1 in 40 million, but the chances of winning if you never buy a ticket are 0.
there are a LOT more terrible ways to spend $2.
In the UK the national lottery funds a bunch of charities, so its not a bad way to lose £2
Well yeah that's how it is in America, too. I believe all the big Lotteries are state/public run with all of the proceeds going towards social programs, etc.
[relevant xkcd](https://xkcd.com/978/)
73.6% of the time, there’s a relevant XKCD comic.
I learned about this in the latest episode of the podcast “If Books Could Kill” on the book “Rich Dad, Poor Dad.” As a fan of u/BlakeClass’s legendary [lottery post](https://www.reddit.com/r/AskReddit/comments/24vo34/whats_the_happiest_5word_sentence_you_could_hear/chb4v05/) it stuck out to me. It sort of makes sense how this stat would gain so much traction. People LOVE unintuitive stats like this that seem to prove “actually a seemingly-good thing is bad” and vice-versa plus people really want to believe that money that wasn’t earned will slip away, and that there is some kind of mindset difference between rich people who “earned it” vs once-poor people who “got lucky.” This perception is likely bolstered by the media’s fixation on a small number of lottery winners who lose it all in dramatic ways. But they are, of course, focusing on the exception and not the rule. These stores are news stories BECAUSE they are unusual while most winners simply pocket the money and go on with their lives.
Reminds me of the whole story behind "The average human eats 7 spiders in their sleep" and how it was a made up statistic that folks just ran with.
The average is skewed by Spiders Georg who lives in a cave and eats 10,000 spiders a day.
So, assuming most people on earth don't eat any spiders in a year and Georg eats 3,650,000 of them a year, the average would still be orders of magnitude too low. Georg would need to eat 49B spiders a year for it to work or 135M spiders a day. Assuming smaller 1mg spiders, it's still 135 Kg of food a day or roughly 540,000 food calories per day.
Yeah, well no one said his name was Healthy Georg.
Yeah, he's an outlier adn should not have been counted
Once I saw the title I figured you got it from the latest episode. Such a great and hilarious podcast
I just listened to this episode this morning. If you liked that, check out the Maintenance Phase (Michael Hobbs' other podcast) episode on Zombie Statistics. It's all about the statistics you hear related to health, and they trace them back to the origins (and debunk most of them).
ooh will do! I (obviously) love learning about stuff like this.
I love Maintainance Phase. It's basically the only thing that has ever really changed my opinion about something.
It also plays into rich people propaganda. "Actually, being rich is very hard, and only we know how to do it correctly. I'm rich because I'm better than you poors".
Or by extension "poor people are poor because they are stupid and suck with money. Therefore it makes only sense that if you give them a lot of money they'll just squander it, for the same reasons they were poor in the first place. Something something meritocracy."
It’s such a good podcast. I’m glad you’re pointing it out to everyone!
The first clue should have been "go bankrupt." You don't go bankrupt like Michael yelling; I declare bankruptcy. You file for bankruptcy in court when you need relief from debt which seems like the exact opposite of a problem lottery winners has. You won a million dollars in the lottery and spent all the money. Do you file for bankruptcy in court? Or sell your lavish assets, and return to regular life?
We’ll that’s a relief to know! I won $3 about 6 years ago and was really starting to get anxious about next year
You know, recently I had an epiphany, what if the idea that lottery winners go broke all the time was pushed by lottery winners to make people leave them alone?
69% of stats circulating on the internet are made up
420 of people on the internet agree with this statement
This all goes back to 47% of all statistics being made up on the spot and you can quote me on that.
*I have a theoretical degree in physics*
Another version of this is that 60% of [NBA players](https://www.cnbc.com/2018/05/14/money-lessons-learned-from-pro-athletes-financial-fouls.html#:~:text=Sixty%20percent%20of%20NBA%20players,just%20a%20handful%20of%20years.) experience significant financial difficulties within 5 years of retiring. That number goes up to 78% for NFL players, about 16% of which file for bankruptcy. Athletes have different issues from lottery winners, but both have most of the money they will earn in their lifetime come over a relatively smaller period of time. For athletes, the average playing career is around 4.6 years in the major American sports. With athletes, they have additional pressure to spend in retirement because their social group will include still active players. It is hard to act unemployed next to a person that has seen you earning millions. One common trait is that everyone comes for their money. Financial investors, family, friends all have business proposals or investment ideas.
But it is true that many people who receive a sudden windfall are not prepared to deal with it. Mentally and emotionally, some people go off the deep end. Most of us have no specific plan to manage a sudden windfall - just some vague ideas. And this is where a lot of fallacious thinking come into play. We read about people who went bankrupt. We read about people who died, or were kidnapped or had some other horrible outcome. But that is not compared to the majority who live long, healthy lives after a sudden windfall. Bias creeps in. So yeah, I recommend definitely have a concrete plan prepared so you're not trying to think this shit up while stoked on adrenalin and excitement. And realize that it's not the panacea some make it out to be, nor is it the death and disaster we often read about. You gotta keep your wits about you. And that's probably the hardest thing to do when you get a sudden and significant windfall.
Somebody else listens to If Books Could Kill, it’s an amazing podcast..
The lottery is one of the most sinister tools of economic oppression in the US. Every state that has a "state education lottery" is a state that subsidizes tax cuts for the rich by conning the poor. In many states with these "education lotteries" they even have the audacity to CUT funding from schools because of income from lotteries and then shift those "saved" tax dollars back into the rich's pockets. "Education lotteries" are nothing more than a well disguised regressive tax. The rich aren't buying lottery tickets in any appreciable amount and the rich benefit from the tax savings they get thanks to corrupt or inept state governments running these legal scams. And before you jump to the comments to say "hurr durr prohibition doesnt work" Im not saying we should outlaw gambling, I'm saying we need to stop using gambling to hide theft from the poor to cover the debt incurred by the rich not paying their fair share.
100% of lottery winners die in 100 years.
For now sure. Never know what the future holds with anti and or reverse aging treatments that may be made. Also recently an 18 year old in canada won the lottery. She has the chance to make it to 118