What if somebody told you that, simply by filling out a bracket for the NCAA Men’s basketball tournament, you could win 1 billion dollars?
Pretty neat, right?
But what if they told you the catch was, you had to be perfect?
That’s right — the only way to win the billion would be to accurately predict the outcome of all 63 March Madness games.
That stipulation might give you some pause initially. It’s hard enough to pick the Final 4 after all, never mind every single winner of every single game.
But then you think: hey, why not give it a go, especially if it’s free to play?
Worst-case scenario, you don’t win. Best case scenario, you could afford to buy that professional favorite sports team you’ve had your eye on.
The Odds of Winning the Billion Dollar Bracket
Warren Buffett, multi-billionaire business mogul, offered up such a promotion, launching the Quicken Loans Billion Dollar Bracket.
Anybody with a 100% accurate tourney bracket would instantly win a billion dollars of Buffett’s money.
This, as one might surmise, did not happen — after a mere 25 games, every single contestant had been eliminated.
Even after ONE game 84% of brackets were busted, thanks to 11-seed Dayton slipping on Cinderella’s glass slipper and chucking 6-seed Dayton from the tourney.
Just about anyone left after that lost out just a few games later, when 14-seed Mercer stole the slipper and broke the hearts of the 97% who had picked their opponents, the third-seeded basketball powerhouse Duke University.
After all that mayhem and destruction, there were a mere three perfect brackets left. All three were squashed by 8-seed Memphis besting 9-seed George Washington.
While technically not an upset, it was certainly enough to make the Final 3 very upset indeed. Buffett’s billion was safe.
Although really, it was safe all along. The odds of achieving a perfect bracket were not good, to say the least.
With 64 teams in the running for the NCAA Championship, there are 9,223,372,036,854,775,808 possible brackets that one can fill out (for those unaware of what to call such a big number, that would be 9 quintillion, 223 quadrillion, 372 trillion, you know the rest.)
Only one of those brackets can possibly be perfect, something nobody has ever pulled off.
Luckily for a few of us, there is a second prize. Buffett is also offering $100,000 to the top 20 non-perfect brackets.
The odds of winning are still very, very low, but selecting a really good bracket is a lot easier than selecting a perfect one.
Plus, who would say no to an extra 100 grand in their pocket?
What We Can Learn from This Gamble
Warren Buffett has made an incredibly intelligent gamble, one any of us could learn from.
He’s not putting up money he can’t make back, for one thing — the man makes $12.7 billion a year, meaning that even if somebody won the Bracket Challenge, Buffet would recover the money in under 30 days.
As far as the second prize goes (which is guaranteed to be dished out,) 100 grand for 20 people equals $2 million.
A man with a $12.7 billion salary earns — no joke — $1.5 million per hour.
Any of us could and should gamble this way, even if we don’t make $12.7 billion a year.
Never gamble more than you can afford to lose, even if that means foregoing the sexy high-stakes poker table and spending the night playing the penny slots.
Always go into a gamble planning on losing money, because the odds are good that you will. That’s why they call it a gamble.
In addition, Buffett’s Bracket Challenge offers a second lesson: make sure something’s in it for you.
He’s not just giving out money just for fun, he’s also building his brand and business.
The contest offers very good exposure for his main business, Berkshire Hathaway.
By offering up so much money in a fun and friendly manner, Warren Buffett’s positive image rises significantly, as does his company, which is normally a faceless conglomerate with ownership in just about every facet of your life somehow (do you have Geico Insurance, eat at Dairy Queen, enjoy Heinz ketchup, drink Coke, or wear Fruit of the Loom anything? Buffett thanks you for your business.)
While you likely don’t own as much of the world as Buffet, the point is to not go into gambling without a contingency plan.
Buffet will not lose his shirt after the Champs cut the nets, and he’s improving his reputation among customers and investors alike.
Gambling while having fun, making friends, and covering your own financial behind in the process?
No matter which team you root for, that sounds like something everyone can get behind.
Mary Hiers is a personal finance writer who helps people earn more and spend less.