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What I Will Do With My $586 Million
The MegaMillions lottery jackpot is $586 million. That’s, um, a lot of money, even after I go through the mental process, like a good conservative, of calculating what the all-cash payout might be (roughly $250-$300 million) and the cap gains taxes (let’s say 30%?) netting me (back of the envelope) $200ish million.
So, really, the only question is this: what should I spend my $200 million on?
Candy, probably.
I don’t mean actual candy, I mean metaphorical candy. Grown-up candy: things like Paris apartments in the 7th arrondissment, a place on Hobe Sound, stuff like that. Maybe I’ll invest in a center-right web-based conversation site and…..
Oh, wait.
Look, I know the odds of winning this thing aren’t great. (I also know that I am going to win it.) But it’s fun, in a limited and highly-curtailed way, to daydream a bit, even though we’re all smart here at Ricochet and we all know that these lottery things are, basically, scams. “Idiot taxes,” a friend of mine calls them. But if you don’t have $200 million and there’s a way — even a statistically impossible way — to get $200 million, it’s only natural to spend a few moments deciding between the rue de Varenne and the rue du Bac.
Here’s what I’d like to know, though: if you do have $200 million, do you still daydream about getting another $200 million? According to Tom Corely, the author of Rich Habits: The Daily Success Habits of Rich Individuals, you do not.
What do rich people do? They get up early, they eat right, they make to-do lists, and they set long-term goals. From Yahoo Finance:
Early RisersCorley found that rich folks often take advantage of those wee morning hours. Specifically, 44% wake up three hours before their 9-to-5 job. In those hours they focus on self improvement, reading educational material, like trade journals or industry blogs. They’ll squeeze in a workout, too, which Corley says leads to a more productive day at work.
Keep a Running List of TasksOnce they reach their offices, the wealthy don’t waste time. Most maintain a daily to-do list and check off 70% of their tasks each day. And they’re not just obsessed with short-term plans. Seventy percent of the wealthy surveyed set long-term goals, as well.
No Long LunchesTaking a long, leisurely lunch isn’t a wealthy habit, either. Instead, 55% network, wheel and deal between bites.
Calorie CountingSpeaking of eating, rich folks are big calorie counters. Corley found most wealthy people limit alcoholic consumption and keep junk food snacks to just 300 calories per day, not just so that they can fit into their skinny jeans. “Wealthy people are healthy people. To wealthy people being healthy is about making more money,” says Corley.
No GossipingConsider this before spreading the latest workplace rumors: 79% of low-income people admit to gossiping, compared with just 6% of wealthy individuals.
In other words, they focus on the life they’re living, not the life they’ll have if they win MegaMillions, which they know isn’t going to happen. Is there a conservative message in this? We already know that to keep out of poverty, you really only have to do three things: finish high school, have children in wedlock, and get (and stay) married. If you do all of those things in addition to the items above, maybe you won’t need to win the lottery.
I’m buying a ticket anyway.
Also, Corley adds one more thing to his list:
Limited InternetFinally, when it’s time to punch out at the end of the day, how do you unwind? Head to the bar? Veg out in front of the TV? While most wealthy folks reported activities such as networking, volunteering and socializing, Corley found a majority of those struggling with their finances spent more than an hour on recreational Internet use, and were twice as likely to hop on Facebook every day.
Ahem. Is this a good time to remind you to join Ricochet?
Published in General
Let’s really think about it analytically:
[SNIP] Now, imagine this player investing $2 per weekday (~$500 per year) in an S&P Index fund over 20 years. Assuming a return of 7%, the person would have about $22,000 at the end of the period.
Is this disparity of result utterly trival?
Let’s think about it realistically. No one is going to set up an S&P Index fund with those funds. The $2/wk will be blown on some other entertainment. That’s why it has an essentially zero impact. ·59 minutes ago
No one? Really? People invest small amounts per period all the time. My point was that the lottery is not, as you say, “common sense”, the investment is not “zero”, and the odds are not “in your favor”. That is exactly the kind of flawed thinking that causes people to waste money on the lottery, and you are endorsing it. At least if the money is “blown on some other entertainment”, or a doughnut, or a fountain coke, then some value is derived from it. That’s more than one can say about the lottery.
No one? Really? People invest small amounts per period all the time. My point was that the lottery is not, as you say, “common sense”, the investment is not “zero”, and the odds are not “in your favor”. That is exactly the kind of flawed thinking that causes people to waste money on the lottery, and you are endorsing it. At least if the money is “blown on some other entertainment”, or a doughnut, or a fountain coke, then some value is derived from it. That’s more than one can say about the lottery. ·2 hours ago
Edited 2 hours ago
But people do get something from the lottery, else they wouldn’t buy a ticket. It has value – it may not be monetary, but it has a value to those who purchase it.
The economic term for this, I believe, is “jollies”.
Let’s really think about it analytically:
[SNIP] Now, imagine this player investing $2 per weekday (~$500 per year) in an S&P Index fund over 20 years. Assuming a return of 7%, the person would have about $22,000 at the end of the period.
Is this disparity of result utterly trival?
Let’s think about it realistically. No one is going to set up an S&P Index fund with those funds. The $2/wk will be blown on some other entertainment. That’s why it has an essentially zero impact. ·
No one? Really? People invest small amounts per period all the time. My point was that the lottery is not, as you say, “common sense”, the investment is not “zero”, and the odds are not “in your favor”. That is exactly the kind of flawed thinking that causes people to waste money on the lottery, and you are endorsing it. At least if the money is “blown on some other entertainment”, or a doughnut, or a fountain coke, then some value is derived from it. That’s more than one can say about the lottery. ·
Lighten up, Francis.