Do you play the lottery? I’ve always considered lotteries to be a method of “taxing the poor,” as the saying goes. While no one is forced to play the lottery, those who do are more often than not people who believe society has left them with only one “reasonable” option for becoming financially comfortable — sheer luck against massive odds. Another class plays the lottery: people who pool their money with others in a corporate-type office, dreaming of leaving their cubicles behind.
I admit that since I accepted a new job a few years ago, I have occasionally been contributing one dollar when a co-worker decides the latest jackpot is high enough to justify the group purchase. It’s not often. Perhaps I’ve contributed twenty dollars over the past three years. I never expect this cash outlay to pay off for me, and with this expectation, I have not yet been let down. Why do I bother play, with my full understanding of the odds? Chipping in for lottery tickets with co-workers benefits my team socially more than financially. Is it financially smart? Probably not, but it gives us an excuse to maintain good working relationships with each other. I’m willing to pay twenty dollars over three years for that benefit.
For a group of ten employees at Chubb in New Jersey, pitching in to play the lottery did pay off. They, not we, won the $216 million jackpot for the “Mega Millions” game. After taking the cash payout, each employee will walk away with $14 million. “Walk away” may not be the term they prefer; according to their interview with the media, they will not be leaving their jobs.
If these winners are like many others, they will quickly burn through their new-found wealth, or what is left after taxes. During this process of spending and perhaps investing, I hope they choose worthy recipients and uses for the funds.
When you win the lottery, you are required to speak to the media. With your name in the open, long-lost friends and relatives, charities, and scam artists will be knocking down your door. Here are some basic tips to make sure you aren’t harassed as much as you would be otherwise:
- Change your phone number.
- Hire a lawyer.
- Find a financial adviser through a recommendation from a trusted friend.
- Talk to the a bank to open account within which you can accept a large wire transfer.
- Set aside enough for taxes. Lottery winnings are taxed as regular income.
If you have more tips, share them here with other Consumerism Commentary readers.
Updated September 3, 2010 and originally published March 5, 2009.