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Sun Nov 25, 2012, 07:54 AM

No Powerball winner; jackpot goes to record $425M

http://www.stltoday.com/news/local/metro/no-powerball-winner-jackpot-goes-to-record-m/article_8fb24f88-c71a-5f36-8c1f-82b4d948b944.html

No Powerball winner; jackpot goes to record $425M
Associated Press

DES MOINES, Iowa Lottery officials say nobody has won the Powerball jackpot and the top prize will now increase to about $425 million for the next drawing, the largest jackpot ever for the game.

Iowa Lottery spokeswoman Mary Neubauer said sales were strong over the holiday week for Saturday's drawing, which was estimated at $325 million before the numbers were picked. That was the fourth-largest jackpot in the game's history.

Neubauer says the jackpot for Wednesday's drawing could go even higher than the estimated $425 million because sales pick up in the days before record drawings.

The previous top Powerball prize was $365 million, won in 2006 by ConAgra Foods Workers in Lincoln, Neb.

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Reply No Powerball winner; jackpot goes to record $425M (Original post)
jsr Nov 2012 OP
A HERETIC I AM Nov 2012 #1
Sekhmets Daughter Nov 2012 #11
A HERETIC I AM Nov 2012 #14
Sekhmets Daughter Nov 2012 #19
A HERETIC I AM Nov 2012 #21
Sekhmets Daughter Nov 2012 #32
A HERETIC I AM Nov 2012 #33
Sekhmets Daughter Nov 2012 #34
A HERETIC I AM Nov 2012 #35
Sekhmets Daughter Nov 2012 #38
hfojvt Nov 2012 #16
mythology Nov 2012 #18
cherish44 Nov 2012 #41
Fumesucker Nov 2012 #2
A HERETIC I AM Nov 2012 #6
pipoman Nov 2012 #10
Sekhmets Daughter Nov 2012 #13
RagAss Nov 2012 #3
spinbaby Nov 2012 #4
woodsprite Nov 2012 #9
A HERETIC I AM Nov 2012 #12
Thor_MN Nov 2012 #15
RagAss Nov 2012 #23
Thor_MN Nov 2012 #31
Douglas Carpenter Nov 2012 #39
Earth_First Nov 2012 #5
RomneyLies Nov 2012 #7
Earth_First Nov 2012 #8
DLine Nov 2012 #17
liberal_at_heart Nov 2012 #20
TeamPooka Nov 2012 #22
BlueMan Votes Nov 2012 #24
Libertas1776 Nov 2012 #25
darkangel218 Nov 2012 #26
darkangel218 Nov 2012 #27
ecstatic Nov 2012 #28
rdking647 Nov 2012 #29
darkangel218 Nov 2012 #30
midnight armadillo Nov 2012 #36
Pacafishmate Nov 2012 #37
w8liftinglady Nov 2012 #40

Response to jsr (Original post)

Sun Nov 25, 2012, 08:00 AM

1. Cue the DU'ers that will say it is too much in 3, 2, 1.......

I remember the last time it was over 300 mil and there were several that said it was an "obscene" amount and shouldn't be allowed.


I bought a few for last nights drawing and I'll buy a few for Wednesday now.

With the cash value at $278.3 mil, the take home after paying the 35% federal tax would be around $181 million, at least in Florida where there is no state income tax.

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Response to A HERETIC I AM (Reply #1)

Sun Nov 25, 2012, 09:01 AM

11. Every month

I buy tickets for the 9 monthly drawings.... The minimum drawing is $20 million...I could use that.

I'd take the "annuity' myself. The 30 annual payments are guaranteed, can be willed to your heirs, and every year after the first installment, there is a 3% COLA raise. The thought of trying to invest $181 million is daunting, to say the last.

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Response to Sekhmets Daughter (Reply #11)

Sun Nov 25, 2012, 10:08 AM

14. The problem with taking the payments....

Is that the annuity the Powerball buys uses US Treasury bonds. Using even Triple A rated corporate bonds, you can beat the shit out the return they are getting over 30 years. Also when you take the payments you only get one a year and 3 out of 5 big jackpot winners in this country declare bankruptcy within 5 years in large part because they take the payments and they overextend themselves with large purchases.

It may be daunting, but that's why you get competent, professional help if you were to win a sum that large.

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Response to A HERETIC I AM (Reply #14)

Sun Nov 25, 2012, 01:43 PM

19. First I must make a correction...

The COLA increase is 4% a year.

Theoretically you can beat the hell out of that, in practice very few people will beat 1/30th of $425 million + 4%. guaranteed, year in and year out. Remember, you lose roughly 57% to taxes and the reduced amount paid for selecting cash. Not to mention the fact that one must assume part of that 1/30th will end up being invested each year.

I can't speak to the bankruptcy problems of people who think several million dollars equals "unlimited" funds. No Powerball winner has taken the annuity for several years now.

Competent professional help will also eat into your returns. I think good arguments can be made for either situation and people should do what they feel most comfortable doing. If they are lucky enough to win in the first place.

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Response to Sekhmets Daughter (Reply #19)

Sun Nov 25, 2012, 02:27 PM

21. The 4% annual increase is figured into the annuity they buy.

They buy what is known as an "immediate annuity, period certain" with a return of principal provision that has the annual payments structured so they increase each year. They are not making a 4% return. They are making a return equal to the Treasury yield curve At the time they purchase the annuity.

Your 57% statement is somewhat misleading, as the take home pay, so to speak, is the cash option figure ( currently $278.3 million) minus federal and state income taxes. The IRS looks at this as if you had gotten a 278 million dollar raise for one single year. The vast majority of it therefore is taxed at 35%. 278.3 times .35 = 97.405 million in federal taxes. I live in Florida where there is no state income tax so my take home would be roughly $180.9 million. That's about 44% of the jackpot.


BUT

If you stuck that $181 million in a non interest bearing account and just drew on it, you would never pay another cent in income taxes. If you invested in
Municipal bonds, you could live off the interest and again, never pay another cent in income taxes.

The fact that the 30 year treasury currently has a coupon rate of a mere 2.75% ( and this is relevant because, as I said earlier, they buy an annuity that invests solely in Treasuries) means that you can beat the shit out of the 425 million figure over 30 years starting with the $181 mil by investing in a broader portfolio including corporate bonds with a four or five percent coupon.

If the coupon on the thirty year was where it was 6 years ago- 5%. - it might make more sense to take the payments, but just about every annuity company out there can and will beat the Treasury yield curve on a 30 year immediate annuity.

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Response to A HERETIC I AM (Reply #21)

Sun Nov 25, 2012, 05:58 PM

32. Well, there you go....

you're an investment wizard.

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Response to Sekhmets Daughter (Reply #32)

Sun Nov 25, 2012, 06:13 PM

33. I am by no means a wizard.

I just understand how the Powerball annuity is structured and taking it at the current low rates is foolish.

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Response to A HERETIC I AM (Reply #33)

Sun Nov 25, 2012, 08:00 PM

34. OK...a Powerbll wizard then...

Here's my only real question.... If the jackpot is $425 million, is the annual payment 1/30th of that amount?

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Response to Sekhmets Daughter (Reply #34)

Sun Nov 25, 2012, 08:24 PM

35. No.

As you noted, the payment stream increases year to year by 4%, so the first payment is considerably smaller than the last payment.

http://www.powerball.com/pb_contact.asp
Scroll about 3/4 of the way down that page and read the section titled " WHY IS THERE A DIFFERENCE BETWEEN THE CASH PAYOUTS IN THE POWERBALL AND MEGA MILLIONS GAMES?"


And I take it you have some problem with what I have said and that is why you are using the term "Wizard" as a pejorative.

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Response to A HERETIC I AM (Reply #35)

Sun Nov 25, 2012, 09:54 PM

38. I'm not using the word wizard as a perjorative.... No Way

If I had a problem with anything you said, I'd just stop replying. I certainly wouldn't ask any questions. I'm watching my Giants playing against Green Bay...I become distracted sometimes....

I come to DU to become better informed, not to get into pissing contests with total strangers. I do apologize if it seemed otherwise.

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Response to A HERETIC I AM (Reply #1)

Sun Nov 25, 2012, 11:24 AM

16. Okay, here you go

it is fucking obscene.

For myself, I would rather see 300 people win $1,000,000 than ONE person win $300 million.

When I played powerball twice a week, my own hope was to win $100,000. If I won that, I would give two weeks notice at my job and be a free man - at least for a while. There used to be 7 or 8 of those $100,000 winners per drawing.

Then they increased the amount of numbers they use - to make the jackpots bigger. Well, in doing so, they reduced the amount of smaller winners. Now fewer people are winning $5,000 and $100,000.

I find it bizarre that people will buy a ticket to win $300 million, but not to win $10 million. As if $10 million is somehow peanuts. "Meh, the jackpot is ONLY $10,000,000, why bother?" Of course, when the jackpot gets bigger, then powerball inc. gets more free advertising as the big jackpot becomes "news".

The powerball is like a microcosm of the American economy. Fewer and bigger winners, and more losers.

And, of course, the powerball winner gets super-rich without doing one stitch of useful work.

Welcome to the 1%

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Response to hfojvt (Reply #16)

Sun Nov 25, 2012, 11:46 AM

18. I only buy tickets when the value is over 100 million

But that's because under that amount (not accounting for taxes and other winners) the ticket has a negative expected value. If you do the math to include those other factors, the jackpot actually should be well over 200 million. I don't expect to win and I don't buy anything that would impact my ability to pay my bills. It's just spending money for me.

But feel free to continue looking down your nose at others.



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Response to hfojvt (Reply #16)

Sun Nov 25, 2012, 10:44 PM

41. I only play Powerball or Megamillions if the jackpot is over $100 million

I figure if I'm going to beat those kind of astronomical odds of winning, I want it to be BIG! (I rarely play, maybe a single "quick pick" once in awhile as an "Ok throw my name in the hat" type of thing.)

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Response to jsr (Original post)

Sun Nov 25, 2012, 08:05 AM

2. People who are bad at math are going to be paying a lot of taxes next few days

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Response to Fumesucker (Reply #2)

Sun Nov 25, 2012, 08:47 AM

6. I'm not bad at math and as I said above, I'll buy a few for the next drawing.

Of course, the odds are 175.22 million to one, but they are 100% against if you don't buy a ticket. Someone is going to win it sooner or later and I have just as much chance of winning as anyone else.

The people that go overboard and spend hundreds, if not more on tickets are the fools. But to drop a twenty on something like this every 2 or 3 months is no big deal to me.

One issue is that when these lotteries get this high, the likelihood of there being more than one winner grows dramatically.

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Response to A HERETIC I AM (Reply #6)

Sun Nov 25, 2012, 08:59 AM

10. Yep, I don't gamble much

but when I go to a casino I usually play blackjack and take $500 to $1,000..if I loose it I'm done..I have been known to play $2-300 on a single hand. Granted the odds are much better at blackjack, but the rewards are much, much smaller too. Anyway, I haven't been to a casino in 2 years, I can afford to loose $20 or 30 for the fun of considering the what-ifs of winning a fortune like this..for me the fun would be in helping people $100 here, $10,000 there.

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Response to A HERETIC I AM (Reply #6)

Sun Nov 25, 2012, 09:06 AM

13. To date, that hasn't happened with

Powerball.

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Response to jsr (Original post)

Sun Nov 25, 2012, 08:13 AM

3. Better chance of getting hit in the ass with a meteor.

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Response to RagAss (Reply #3)

Sun Nov 25, 2012, 08:39 AM

4. Well, they do say you can't win if you don't play

Whenever the jackpot goes high enough to make the news, we drop $10 on lottery tickets. I figure it's a small investment that yields a pleasant day or two of fantasizing about what we'd do if we won the big one.

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Response to RagAss (Reply #3)

Sun Nov 25, 2012, 08:56 AM

9. But if it's gonna happen to someone or some

group, I'd rather be in then sitting out of it. I'm going
In with some coworkers. I'll also buy 4 tickets for home (one
for each of us). If I didn't go in with the coworkers and
they hit, I'd never forgive myself. The term "left behind"
would suddenly take on a whole new meaning.

First thing I'd do would be hire a lawyer, then set up funds
for our kids and their cousins, and a few non-profits I deal
with (arranged so they couldn't touch the principal?)
I'd also set my inlaws up so they wouldnt have a worry - FIL
was just diagnosed with Alzheimer's this summer, and mom
MIL with macular degeneration and is losing her vision. I
personally wouldn't want to move to FL, but I would buy 3
houses down there, near the inlaws, that relatives could use
when they visited them (one for each of the siblings). We all
visited at the same time this summer and Dad loved it. Keeps
asking when we'll do it again.

.......hmmm, it's nice to dream......

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Response to woodsprite (Reply #9)

Sun Nov 25, 2012, 09:06 AM

12. Going in with a group lke your coworkers is a HUGE mistake in my opinion

as the potential for fraud is large and it doesn't increase your odds of winning at all, really.

Besides, the lure of winning such a large sum is that it might just go to one person. I have no desire to being forced to share with a group of others merely because I put money into a pool and that pool held the winning ticket.

Having said the above, I want to make it clear that I would be very generous with such a sum.

The thing is, many say they would just give most of it away. That's another mistake. What one should do is form charitable trusts in which the money is invested nd the trust gives away the income from the investments. That way the money can make money for ever, basically. if you give it ll away, then that's it. It's gone.

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Response to RagAss (Reply #3)

Sun Nov 25, 2012, 10:47 AM

15. Really? There was a woman that got hit in the hip with a meteor, but no one in recent history

has been hit in the ass. Since I'm pretty sure that there are more than 175 million people that have lived in modern times, I'd hazard a guess that you are wrong.

http://www.history.com/this-day-in-history/meteorite-strikes-alabama-woman

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Response to Thor_MN (Reply #15)

Sun Nov 25, 2012, 02:43 PM

23. Yeh...right...go bet on a horse's head to win the Kentucky Derby...

You can bet that every day for 5,000 years and never come close to winning...and then one day a hurricane with 200 mile per hour winds will come and blow the head to victory...worth the 5,000 years of betting???

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Response to RagAss (Reply #23)

Sun Nov 25, 2012, 04:15 PM

31. The odds of winning the Powerball are somewhere north of 175 million to one.

The earth's population is approaching 7 billion. And not a one of them have been hit in the ass by a meteor. So your assertion that getting smacked on the backside by space debris is more likely than winning the Powerball, is, on the face (or ass) of it, laughable. There are multiple Powerball winners a year... There's no documented ass strikes from space...

I'd bet on winning the Powerball everyday over the odds that you get hit in the ass by a meteor. Neither of are likely to win in oue lifetimes, but I have a much better chance of winning than you. Propose all the unlikely things you want, your statement was incorrect.

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Response to RagAss (Reply #3)

Sun Nov 25, 2012, 10:29 PM

39. But if God wants you to win - the chances are 100%

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Response to jsr (Original post)

Sun Nov 25, 2012, 08:46 AM

5. cue up the lottery sh*t-talkers...

Regressive tax on lower-income families, a tax on the mathematically illterate, etc. ect.



I've got my $5 on it!

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Response to Earth_First (Reply #5)

Sun Nov 25, 2012, 08:52 AM

7. You can't put $5 on the Powerball any more

 

One set of numbers now costs $2, so five sets of numbers is now $10.

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Response to RomneyLies (Reply #7)

Sun Nov 25, 2012, 08:54 AM

8. Yes, you are correct...

Typo.

I've got my $6 on it...

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Response to jsr (Original post)

Sun Nov 25, 2012, 11:37 AM

17. Yes, Im well aware the chance of winning incredibly slim.. But somebody has to win.

Might as well be me and you can't win without buying a ticket. I usually buy a few quick picks when the jackpot is over 200 million. I purchased 4 powerball tickets last night and the guy at the store said he had sold about $6,000 worth of tickets yesterday.

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Response to jsr (Original post)

Sun Nov 25, 2012, 02:04 PM

20. I bought 1 ticket last night

will probably buy 1 ticket for the next one as well.

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Response to jsr (Original post)

Sun Nov 25, 2012, 02:29 PM

22. I'm in one of only 8 states not in Powerball, darn it. I wanted to buy a ticket.

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Response to jsr (Original post)

Sun Nov 25, 2012, 02:53 PM

24. i always buy 2 tickets with the same numbers...

 

if i win and so do other people- i get 2 shares.
if i win alone- i can take lump sum on both, or one lump sum and one annuity.

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Response to jsr (Original post)

Sun Nov 25, 2012, 02:58 PM

25. eh,

i'll gladly take 5 million dollars after taxes. That's 100,000 dollars a year for the next 50 yrs of my life. I think i could survive on that

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Response to jsr (Original post)

Sun Nov 25, 2012, 03:20 PM

26. I predict..

The numbers will be : 5, 17, 18, 29 and 40.

And powerball is 5

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Response to jsr (Original post)

Sun Nov 25, 2012, 03:20 PM

27. :D

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Response to jsr (Original post)

Sun Nov 25, 2012, 03:22 PM

28. Thanks for sharing

I probably would not have even known about it otherwise. I will buy 3 to 5 tickets depending on the price.

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Response to jsr (Original post)

Sun Nov 25, 2012, 03:26 PM

29. when i win...

ill take the 278m annuity. after taxes that will be about 180m or so.

ill invest 75m or so figuring i can earn 6-8% or so fairly easily.
the balance ill donate to assorted charitys. no national ones id rather give to orginazations that make a difference on a local level.
I know Austin pets alive here in Austin wouldnt have to worry about money anymore

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Response to jsr (Original post)

Sun Nov 25, 2012, 03:31 PM

30. Everyone relax, save your money

No need to play, cuz ill be winning

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Response to jsr (Original post)

Sun Nov 25, 2012, 09:24 PM

36. Drop a nuclear bomb on your life?

really, that's what that sort of winnings represents. $1 mil jackpot? I could absorb that without too much trouble - wipe out mortgage, student loan debt, some charitable donations, and a shiny new bicycle or two, with plenty left over for the future. $425 million...naw, I don't need that sort of insanity.

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Response to midnight armadillo (Reply #36)

Sun Nov 25, 2012, 09:37 PM

37. You can send any excess money you may have directly to me for proper disposal. :)

 

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Response to jsr (Original post)

Sun Nov 25, 2012, 10:44 PM

40. Oh,Heck.. I'm playing

and when I win,there will be a lot of people with dental care.
...and I'll buy a house,I guess.

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