Don’t Feed the Alligators

There was a time when I believed the old axiom:

“The lottery is a tax on people who are bad at math.”

I understand the math, and I have for quite some time. But a few years ago, I started watching poker on TV. I especially enjoyed The World Poker Tour. I’ve never played poker, but certainly learned a lot about the game by watching.

Two interesting concepts that caught my attention are:

pot odds — the ratio of the current size of the pot to the cost of a contemplated call.

and

equity or expected value — the product of the expected odds of winning the pot and the amount of money in the pot.

Looking at these terms with respect to the local jackpot game yields the following:

Another way to analyze this is by looking at the history of the pot:

So you can see that as the prize goes up, both the equity goes up but the pot odds go down. The bottom line here is that betting $1 can net you a very large sum of money. How can I afford not to play even though the odds of winning are still very clearly astronomical.

So why do I play? In a word: Hope. It is unlikely that I will ever get to a point in my life where I won’t have to worry what anything costs just by using my head and working hard. It could happen, but it’s probably no more likely than winning the lottery. But all of us still like to dream about what life would be like if we could get up every morning and have our own agenda, rather than carrying out some else’s.

So to balance the mathematician in me who knows that this is a sucker’s bet with the child in me who still hopes that life could change in the blink of an eye, I have a simple set of rules that I follow for playing:

1. I don’t play until the prize reaches at least $50 million. I figure that the actual lump sum cash payout of $50M is about $30M. After taxes this is probably only worth something like $20M, and then in order to make this money last I can spend somewhere between $500,000 and $1M per year.
2. I play $1 for the first $50M and then $1 for each $50M (or fraction) for any amount over $50M. So Tuesday’s jackpot is $95M, so I bought 2 tickets.

That’s it.

What would I do if I won? First, I’d photocopy the ticket. Then I’d carefully drive to my local bank, open a safe deposit box account, and deposit the ticket inside. Then I’d find a REALLY good lawyer who could advise me on the best way to collect my prize while revealing as little as possible about myself. I have considered waiting something like 3 to 6 months so that any media hype over the drawing dies down.

After collecting the prize, I would ask my closest friends and family what I could do for them that would be fair and make them happy. Then I would try to accommodate their requests to the best of my ability and prudence. I would put the balance of the money into various investments. Next, I would look for a nice home, and finally I would look to start or buy a business.

How about you? Do you play the lottery? What would you do first if you won?

This post is for all those scrapbookers out there who are also trying to watch your spending, which can at times seem impossible with the myriad of tools, papers, embellishments available. Since we try to keep on a fairly strict budget and scrapbooking falls into the discretionary category, I have become the Queen of frugal scrapping. It’s not necessary to sacrifice style to cut costs and listed below are some tips for scrapping on a budget.

Throughout this post I have incorporated some examples of layouts from my own collection, so you can see these techniques at work. Hope you enjoy the layouts and tips and can start saving money while still having a great time scrapping and preserving your memories.

Save your scraps.

Each piece is precious. Ok, you don’t have to save every piece, but if it’s bigger than a 1″ x 1″ square it’s worth saving. If you have a good system to organize your scraps by color or theme you can use them later to make cards, punches and small die cuts. A technique I love is color blocking and it is also a great way to use old scraps. Also if you only have one piece of patterned paper using it in blocks can be very efficient and a great way to incorporate a lot of photos. You can also use one smaller piece on a plain background if you don’t have a full 12×12 sheet. Sometimes this is all the pattern you need for your layout. Read the rest of this entry »