Biggest Myths about the lottery BUSTED Is the lottery really what it seems?
You might think it's a harmless waste of money people do for a quick thrill.
Or that it's an addictive money-making scheme that preys on people's hope for a better financial
future.
Well, millionaires, today we're going to go over the five biggest myths about the lottery
and BUST them once and for all!
Make sure you stay out until the end, so you really know what the lottery is all about.
Let's begin with one of the biggest myths.
Lottery Myth Number 5 - Playing makes economic sense when the jackpots get big.
It seems like common sense, right?
The higher your potential winning amount, the better off you are when you go to the
lottery.
Certain writers from different sources such as Forbes and Money.com have previously said
that once, for example, the Powerball winnings reach a given amount, the expected value - your
payout, times the probability that you'll win - logically exceeds the risk price of
the ticket.
But even ignoring your still microcosmic chance of winning, lotteries with massive jackpots
aren't actually all they're cracked up to be.
The first reason for this is since jackpots are paid out as annuities, you don't get the
value all at once.
And if you do choose to get all your money at the same time, you'll only be getting about
sixty percent of the overall prize.
The second reason big jackpots aren't as big of a deal as they seem is that winners pay
severe taxes on that seemingly fantastic payout.
While the exact amount can vary, you're usually paying about 50 percent of that amount in
taxes.
And the third reason big jackpots aren't such hot ideas to go for it is that, well, many
other people will be playing it as well for the same reason.
More people means more numbers played, which means a greater chance that two people will
pick the same set of winning numbers.
That means sharing your already diminished prize.
And since the number of people only goes up after you reach the $500 million jackpot mark,
even on the improbable chance you actually win, your overall value starts going down,
not up with bigger jackpots.
Keep in mind those prizes are growing as many of the biggest lotteries have cut the odds
of winning.
With the new numbers added to the drawing, your chances of winning the Powerball jackpot
are now 1 in 292 million, and the Mega Millions jackpot is now 1 in 302 million.
So yes, your chances of winning big on the lottery are literally lower than your chance
of getting hit by an asteroid.
Lottery Myth Number 4 - Hitting it Big-Will Fix All Your Financial Problems.
Of course, if you could somehow beat the odds and win the jackpot, at least then you'll
be able to wipe out any of your money issues, right?.
According to a Consumer Federation of America survey, one-fifth of all Americans actually
believe that winning the lottery is their most viable way to gather large amounts of
savings.
Similarly, another survey conducted by the investment app Stash concluded that around
40 percent of people consider winning the lottery a decent way to finance their retirement,
with 59 percent of those responders being millennials.
However, when a team of economists tracked the finances of people from Florida who were
financially distressed until they won the lottery, their research produced a sobering
result.
Big prize winners who won between $50,000 and $150,000 were just as likely to be bankrupt
as small-time winners.
Just as revealing is the fact that both groups had practically nonexistent savings and similar
levels of debt.
According to the National Endowment for Financial Education, of those who win lotteries or simply
receive large amounts of money, about 70 percent of them go bankrupt within just a few years.
Lottery Myth Number 3 - There Is No Benefit Whatsoever to Playing the Lottery
On the other end of things are those that think the lottery is actually a societal problem.
"It's an immoral diversion of money that could be better spent," said a Minnesota Star Tribune
editorial, "it's not harmless entertainment."
You'll almost always find a media blast directed at buyers of the lottery whenever a big jackpot
drawing is coming up.
But there are plenty of reasons to play the lottery.
And many see it as their only means of drastically altering their economic circumstances.
Particularly during economic downturns, lottery purchases go up to record levels.
You'll see this even more among the unemployed, people with low education, and those collecting
government benefits.
In fact, in studies that ask people to report annual income (for example, 0-$100,000), people
who feel poor as a result tend to purchase nearly twice as many lottery tickets with
the money they receive from the study as those who feel richer.
Low-income people also tend to use the lottery to buy their consumer goods.
Televisions, refrigerators, washers, and other such items they'd otherwise have difficulty
affording are the most likely candidates.
Another immediate benefit for most players is the quick psychological payoff.
While not as significant as psychological resolutions or actual vacations, the quick
hit of dopamine can help boost their mood for the short term.
And while most lottery players who spend large portions of their income are poor, people
of other income groups also play the lottery recreationally.
And while about 7 percent of Americans reported having gambling issues, it's a recreational
indulgence similar to alcohol for many.
I am sure you've heard some of the myths we have seen so far, but these next two are some
of the most sounds lies about the lottery that people actually believe to be real.
So it is time to stop the lies.
Lottery Myth Number 2 - Winning the Lottery Can't Make You Happy.
At first, all evidence seems to point to the negative side effects of gambling.
As Harvard Medical School professor Sanjiv Chopra said in a recent TED talk, "winning
a $20 million lottery ticket won't make you happier."
He mentioned research suggesting that while positive and negative changes impact short-term
happiness, people naturally tend to revert to their "set point" of happiness over time.
This is only reinforced by the stories of lottery payoffs destroying people's lives.
One example of this is a $300 million jackpot winner who thought the excessive generosity
his win enabled him to bestow on his granddaughter ended up funding a drug habit that eventually
took her life.
BUT WAIT!
Before we continue busting this 2nd myth, make sure to check out more stories like this
one by clicking on the top right corner right now or waiting until the end of this video;
they are truly shocking.
Let's continue...
Even though there have been tragic stories like this one, other studies which examined
the happiness levels of lottery winners suggested it's not all doom and gloom.
One such study, performed by researchers at the University of Warwick, examined repeated
surveys collected from randomized samples of Britons, and some of them received medium-sized
lottery wins of up to approximately $200,000.
Compared to those who either hadn't won or whose prizes were relatively small, winners
of medium-size prizes exhibited greatly improved mental health.
And this trend continued past the usual short-term high; two years after a lottery win, that
same average mood improvement in mental well-being was 1.4 points higher on a 36-point measure
of psychological stress than before.
A 2014 Health Economics study found that lottery winners were happier and, again, less stressed
than before they won.
And Lottery Myth Number 1 - State Lotteries Actually Benefit Public Services
State lotteries generally earmark their revenue when generated for specific purposes, with
the most common being education.
Californian television spots and billboards often flaunt the lottery's benefits for education;
Virginia used to print a similar claim on the back of its lottery tickets.
There was even an address by then-Gov. While introducing the "North Carolina Education
Lottery" in 2005, Mike Easley promised they would "be adding another half-billion-dollar
annually for education."
However, other states, such as North Carolina, are now spending less on education than before
the lottery was implemented (even after adjusting for inflation).
Other studies have found that lottery dollars don't actually increase education spending:
instead, legislators end up redirecting a corresponding amount from money that would
fund schools to other purposes.
One political scientist explained it to NBC News as "revenue substitution," but it ultimately
just comes down to a bait-and-switch on the part of policymakers.
Whether or not it was planned that way from the beginning is anyone's guess, but it's
pretty clear by this point that state lotteries are not benefiting public services.
So those were the five biggest myths about the lottery BUSTED!
Which one caught you most by surprise?
Did you already have a suspicion that one was false?
Let us know in the comments below, and be sure to like and subscribe if you haven't
already.
Make sure to watch our Incredible playlist on the most shocking lottery stories.
You won't believe what these lottery winners have gone through.
Do that by clicking the video on your screen.
Until next time, Stay wealthy, and I'll see you in the next video, millionaire!