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Anyone buying powerball lotto?
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06-04-2008, 11:45 AM | #1 |
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Anyone buying powerball lotto?
SOrry for off topic, anyone buying today for tonight draw?
I have never buy any lotto, and i would like to try tonight there is 1-45 numbers, can anyone supply me your best number please Let me know your 6 numbers please cheers |
06-04-2008, 05:15 PM | #2 |
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No numbers are good and your better off keeping your money.
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06-04-2008, 09:55 PM | #4 |
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With odds of winning like 27,489,577 to one, for every game played... it sure is a LUCKY person who wins... still, ya gotta be in it to win it.
However, I will be keeping my hard earned cash thanks.
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06-05-2008, 05:15 AM | #6 |
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If I win I'm buying an M3 fully loaded tommorrow.
oh hang on a boxter s hmmmm
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06-05-2008, 07:27 AM | #7 |
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They had a documentary on picking "better" numbers the other night on Discovery. What they were saying actually made sense, but I would think the ods still weren't so good, so I would be better off spending that on a motorway toll lol
I would be spending it on real estate, then maybee a lambo with the spare change lol
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06-05-2008, 08:12 AM | #8 |
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WOOOOOHOOOOOOOOO!!!!!!!!!!!
I WON DIVISION ONE!!!!!!!!! PART SHARE OF $50 MILLION HERE I COME!!!!!!!! Oh wait.... I didn't buy a ticket. Lotteries are a tax on people who can't do maths. Write that down.
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06-05-2008, 07:30 PM | #9 | |
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As for spending it on real estate, if your cost of debt to fund a property is around 10% at the moment with inflation riding close to 4% the return you will need is quite large (also noting the low to negative growth in real estate values and the real possibility of further interest rate rises) and not going to happen. A wiser investment would be to invest in an index fund or into a diversified bond fund if a steady income stream and capital growth is what your after. (That said this is not financial advise that takes one's financial circumstances into account and i would urge people to talk to their own financial advisor, namely one who charges by the hour, not one who charges by commission)
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06-05-2008, 07:31 PM | #10 | |
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Please post this sort of thing in the designated Official Off Topic Thread.
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06-05-2008, 09:19 PM | #11 | |
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06-05-2008, 11:22 PM | #12 | |
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If someone is buying a property for a little cash to live in and not as an investment, i'm all for debt free, having non-deductible debt against a place of residence is one of the dumbest things i know of. If someone is looking as an investor, debt is a valuable tool to increase returns overtime, primarily as it is a very effective tool for increasing returns especially given it is a great way to reduce the tax bill and construct a efficient investment portfolio. That said any investment that is earning a rate of return above the cost of debt (which should be similar to what you can invest your cash at) will be enhanced by the application of a modest amount of debt to the portfolio. That said any poor investments that are earning below the cost of debt or the cash rate of interest should never be geared up as the debt will erode returns. That said anyone holding such assets is a goose primarily as they would've been better off with their cash in a term deposit.
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06-06-2008, 01:40 AM | #13 |
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Hey I got 3 numbers, $11.20 YEAHHHHHH
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06-06-2008, 02:30 AM | #14 | |
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06-06-2008, 02:52 AM | #15 | |
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I'd just invest half of it, and live off the interest of the interest of the other half. |
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06-06-2008, 03:08 AM | #16 | |
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Debt is a great way to minimise your tax bill, plus if you were earning a return on that $58mil you'd be in the top tax bracket forking out 45% or whatever it is these days. So i think you would be inclined to investigate all methods to get that bill down.
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06-06-2008, 04:15 AM | #17 | |
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06-06-2008, 05:30 AM | #18 | |
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Oh hang on, I don't have extended leather or a ski bag ... not fully loaded |
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06-06-2008, 11:24 PM | #19 | |
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[Apologies in advance to hard core corporate finance types, what follows is a simplification of the extremely complex] I agree with everything BMW//MPOWER said, though another angle on it is that "cost of funds" if you are not using debt, is the opportunity cost of funds. Meaning that what potential opportunity for a future return are you giving up for each dollar that you invest in your intended project. In this instance you would look at the achievable risk-free return you could otherwise achieve on those funds. So for example, at the moment, you can easily get 8.4 to 8.6%pa term deposits with banks. This isn't exactly risk free, but a good proxy. In this instance, your cost of funds is approx 8.6% So an investment in property would have to return your opportunity cost plus CPI at the very minimum in order to consider it to be a good use of your funds. So far, so good, but this isn't really the whole picture. What is missing is risk. Investments all carry some level of risk. The higher the risk the higher the return should be, so your real cost of funds is the opportunity cost plus the CPI plus the risk loading compensating you for the inherent risk in the investment. Determining that these risk loadings are is an profession in it's own right, but you can get a good proxy by looking at the average returns of similarly risky investments. But wait there's more, you also have to consider the relationship between debt and risk... As has been said previously, "good" or deductible debt increases your returns because it increases the level of risk. The problem occurs when deductible debt is used to increase risk unintentionally, as has been the case with investors who have been caught up in the various debt based collapses of companies recently. It works like this... If you accept that broadly speaking, risk, in this context, is the certainty of the cash flows from the investment. So a low risk investment is very certain to return the planned cash flows, ie term deposits have a rate, a time frame and are guaranteed by the capital of the bank, blue chip companies are considered lower risk due to their prooven performance. However higher risk investments have more volatile cash flows, think emerging industry, or speculative companies. An investment's risk profile can come from many areas - the market (tech stocks), the regulatory framework (eg stem cell research), dependance on external factors (eg farming). When an investor evaluates a potential stock they assess what that particular firm's risk profile is, it is known as their "beta", the level of return expected is linked to this risk profile. If the company underperforms, it's stock price will tend to fall in order to re-price it to a level that get's back to it's risk profile or beta. A company that overperforms will tend to see it's stock price increase to reflect this performance and bring it back into line with it's beta (this overperformance is known as the "alpha" return). These price adjustments aren't mandatory, they are a function of the price that buyers are willing to pay for that stock on the market. So when announcements are made professional traders get their calculators out and determine what the stock price should be (there is a standard formula), so subsequent buying and selling bid the price to the new level. How quickly this happens is a function of how efficient the market is at disseminating and absorbing information, ie how quickly does news travel, and investors react. So called value traders look for stocks with good "tracking error", ie they are looking to buy stocks that are priced below what their risk profile would predict, because these are likely to produce higher returns, and will tend to avoid stocks that are overpriced based on their risk profile vs performance. So back to debt... a company that enters debt, or gearing, increases it's risk profile automatically. This is because it gives up control over some of it's future cash flows and is more at the mercy of external risks such as interest rate shocks, and lack of liquidity - Centro is probably the most obvious example of a company that increased risk through debt. Doing this isn't a bad thing, as long as management and the investors are aware of the risks and manage them appropriately. Paraphrasing a comment from the Centro chairman shortly after their issues arose was that Management and the Board had underestimated the increased level of risk they were undertaking with their increased financing levels, because they assumed that the high levels of liquidity (availability of funds) would continue indefinitely. Investors can also use debt to increase the risk and therefore the return (through tax deductions) of an investment when using debt to purchase an investment. So say you wanted to buy a blue chip stock but had a higher appetite for risk you could use debt to achieve that... another way would be to simply buy an investment with higher inherent risk levels, but anyway... So here is the problem... think of Centro investors who used debt to get into that investment, they were unwittingly increasing already high levels of risk. So what is the lesson in all this? Well, debt can be a good thing when used appropriately, and when applied to the right investments. This principal works the same whether looking at a potential investment property, a stock, or the purchase of a franchise business. You weigh the risk of the total transaction (including your debt), see if the return rewards for the level of risk taken, and most importantly of all determine if this level of risk is acceptable to you. This last point can not be stressed enough. Financial planners have tools to determine what your real level of risk appetite is, good ones will match that appetite to appropriate investments. I can not urge people who have sums of money to invest enough to see a good financial planner. So coming back to Poweball, the risk is extremely high - you are most certain to loose your money, but the returns are potentially high which compensate for this risk. But ultimately this high risk is mitigated somewhat by the small initial outlay (equate to a stock price here), so each investor has to weigh the cost of the ticket, against the risk of loosing their money, versus the potential return. Obviously there are many people prepared to take that risk, the last question is (tongue in cheek) should you borrow to buy your ticket? Disclaimer: I am not a planner, but I do work in the Funds Management industry. My post is for information only and does not take into account your personal circumstances, seek the advice of a professional before making any investment decision.
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