The Powerball Jackpot Is at $650 Million — Should You Buy a Ticket?

powerball jackpot

$650 million. Or, about $16.25 million per year, according to USA Mega.

That’s what you’d take home if you won the Powerball jackpot this week — the second-biggest in history.

If you’re like the average person, who has $37,172 in student loans, that could pay off your loans 437 times over. In a single year. Seems like a no-brainer to buy a ticket, right?

Your chances of winning the Powerball jackpot

Now that you’re awake, I’ll hit you with some more numbers — although you might not like these as much.

First, your odds of winning the Powerball jackpot: about one in 292 million.

Which makes it much less likely than, for example, your odds of:

Or, as these cheeky tweets express:

Exactly. So even though it’s incredibly tempting, I wouldn’t advise spending your hard-earned money on Powerball tickets.

Smarter ways to spend that $20

Let’s say you wanted to buy 10 tickets at $2 each. If you could find that $20 today, chances are you could find it next week, too.

And, since good finances are really about habits, why not use the Powerball jackpot as an excuse to create a new one?

“With a one in 292,201,338 chance of hitting the Powerball, I can think of several better options than spending $20 on tickets,” said Matthew Deitel, a research and investment strategist at Dunham & Deitel Wealth Management.

“The one that makes the most sense is putting that $20 a week into a Roth IRA or investment account. Just set it and forget it, and after 30 years you will have a nice bucket for your retirement — from money you thought you could live without at the time.”

1. Fund a retirement account

He’s right: Whether or not you’re investing lottery winnings, you need to be thinking about your future.

With that $20, you might not be able to use a traditional wealth advisor — but you could open a Roth IRA with a robo-advisor such as Betterment.

Do that each week, and you’ll have $1,040 by the end of the year.

Do that each year for the next 40 years, and you’ll have more than $170,000.

As Deitel explained: “Most people think that the amount of money put away each month is most important when saving for retirement — but time is even more powerful.”

2. Make extra payments on your student loans

For many of you, paying off student loans is probably high on your list of “what to do with lottery winnings.”

And though the thought is daydream-worthy, it’d be wiser to use that $20 per week to make extra payments.

If you have $30,000 in loans, for example, and pay $80 extra each month, you’d pay your loans off more than two years early — and save nearly $2,500 in interest.

See how much you could save by checking out our student loan prepayment calculator.

Student Loan Prepayment Calculator

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3. Save for your dreams

Think about what you would’ve bought if you’d won the lottery.

A car, a house, a trip?

Now, instead of putting your hopes in an infinitesimal possibility, take active steps to achieve that goal.

Set up an automatic transfer of $20 each week into a savings account. Combine it with an app like Qapital that rounds up and saves your virtual change, and you might have enough for a vacation at this time next year.

After reading all this, are you still tempted to buy a Powerball ticket? Fine, I get that; sometimes it’s fun to dream.

If you do, though, just buy one. Statisticians say buying more doesn’t improve your odds — and then you can still do something smart with the other $18.

Want to get started investing?

Here are the top investing options for 2018!
NameCommissionAccount Minimum 
$4 to $79 a month$0Visit Blooom
0.5%$0Visit Future Advisor
0.15% - 0.35%$0Visit Betterment
0.49% - 0.89%$25,000Visit Personal Capital
0.25%$500Visit Wealthfront
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