There are some people who are professional sweepstakes players, believe it or not. They spend an unnatural amount of time researching and entering sweepstakes. And they can actually make money at this, too. Or at least get a lot of stuff. You might wonder how you can actually “win” at this. It would just seem to be a numbers game where you enter as many sweepstakes as you can and eventually you’re bound to win something. But there’s actually a somewhat unknown rule that the pros use to get an advantage. (one weird trick!)
Most sweepstakes have some sort of condition for getting an entry. Buy a bottle of this, visit such and such place, every order you place on this website, etc. But, in all sweepstakes, there is a way to get an entry without making a purchase or performing some action – it’s legally required. If you read the rules, they will tell you how to get a free entry. Always read the rules. In most cases, you have to send a 3×5 card with your name and address printed on it and they will return you an “entry”. Some sweepstakes limit the number of entries an individual may make, most don’t.
I’ve attempted this technique once a few years ago. A local charity was selling tickets for your choice of two cars. The tickets were expensive, like $150, and the total number of entries was limited – a rare situation and very valuable because you knew your maximum odds of winning. And like all sweepstakes, you could get free entries if you read and followed the rules.
I bought two tickets, to keep up appearances, but I then deluged them with something like 100 requests for entry tickets. They did fulfill my requests, sending thick bundles of tickets in the mail with their drawing receipts torn off. In the end, I estimated I had a 20-25% chance of winning. Does that sound bad? Does it sound better than a 1:2000 chance? (these numbers are all estimated, BTW, don’t try to math them out)
Well, I didn’t win, even with my extraordinary chances. Whatever, it was kind of a fun exercise. The local charity has never tried a car sweepstakes since, so I think I really pissed them off.
So anyway, I got a flyer for another car raffle. $20 tickets, and the rules do say no purchase necessary (as they must), however, they don’t specify how to get those entries. You have to mail the administrator for information. This sounds pretty good, too, because that extra step might turn off casual players. But when I look at the effort vs reward, I’m going to pass on it. Would you pass on a elevated chance to win a $60k truck?
So, first of all, it’s a truck. It’s a stupid, jacked-up, fully customized pickup truck. Not my style, at all. So what! Sell it! Ok, let’s consider that. First, winning the prize is a taxable event. The IRS is going to want their share of your $60k windfall. Let’s generalize at a 30% bracket. So that’s $18k out of pocket right away. You need to have that to claim the truck. Then there’s tax and title. That’s about another $5k. Probably you need to insure it for at least a month until you can sell it. Maybe that’s $100 at most. So in order to get the $60k truck, you need to spend $23k.
So then, your new $60k truck rolls off the dealer lot and immediately becomes a used truck. And it’s worthwhile to note that this is a 2019 model and the drawing is in 2020, making it last year’s model. Everyone knows a vehicle loses an immediate percentage of its value when it leaves the dealer lot. Considering this is also last year’s model, shall we say 25%? Now your truck is worth $45k and you’ve spent $23k to acquire it.
Your truck is worth $45k, but that is not exactly what it would sell for. You’re in a hurry to sell this so you don’t have to keep paying for insurance on it. Will it sell for $40k? Let’s say yes, so we can wrap this up. So you’ve now made a $17k profit on a $60k vehicle. That’s quite a discrepancy.
“You suck. I’d be more than happy with an extra $17k!” Maybe you would. But you also need to consider that you added $60k to your gross income this year with that win. That might push you into a higher tax bracket. That means the money you earn this year is going to be taxed at a higher rate, more than it would have been had you not won. 17k worth of higher taxes? Probably not, but your withholding from your paycheck is probably not going to compensate for that extra, so you better save some of that $17k to cover your tax bill next year.
There’s something to be said for thinking things fully through. In the case of the first drawing for the car, I would have kept and driven that car (not a $60k car, either) and could have absorbed the taxes easily. This $60k truck has a lot of BS accessories on it that are inflating the value that would never make back their cost if it were to be sold. It’s a bad deal all around.
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