Perhaps you are thinking that with the current economic slump, now would be a good time to invest in a few lottery tickets to get hold of some real money. Of course if you took a realistic look at the odds, it would be clear that the promoters are the ones looking to make some real money, money that is currently yours.
Even in the gambling world, lotteries are a bad bet. Would you play poker where the house reached in a grabbed half of every pot? No, of course not. But that’s what you get with lotteries. In my state, if you added the cost of operation to what is diverted to education and other purposes, about 50% is given away to somebody else before the numbers are drawn.
Then in some games the odds for the big pot may be as much as 175 million against winning. This is not good. You need to decide whether you are gambling to make money or for excitement.
Think about this alternative: If you are buying $10 a week in tickets, put the money in an investment that makes 4% a year. Historically, that would be a low rate but these days all rates are low. After 10 years you would have over $6,000 and in 20 years it would be over $15,000. Do you know anybody personally who has won a jackpot like that lately?
OK. If you are a gambler
you understand the idea of hedging a bet.
So here’s your hedge: Buy one
ticket a week and put the other $9 in the same investments. If Lady Luck is going to give you the big
jackpot, one ticket it plenty. As remote
as the odds are, additional tickets don’t really make much of an
improvement. And what you are really
getting is not a legitimate chance at riches but a license to dream
about what you would do with a lot of money.
With the $9 a week investment, you would have about $5600 after ten
years and nearly $14,000 after twenty, still far better than anything you are
likely to win.
Carefully and deliberately saving money over a number of years really is one of the places where things come from.
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