A Lucky Bet?

This afternoon, I entered my local gas station to purchase gas. While waiting in line for the patron ahead of me to finish, I couldn’t figure out why it was taking her so long to complete her transaction. As I listened closer, I noticed she was purchasing several lottery tickets, which totaled about $11. She walked out the door happy and filled with optimism that today could be her “lucky” day. After she left, I began to question…how many times this week or even this month had she purchased lottery tickets. Or, for that matter, how much do Americans spend on playing the lottery each year?


In 2008, Americans spent roughly $60 BILLION on lottery tickets with the average household spending approximately $525 a year. Since the odds of winning are stacked against you, why play? I know most do it for enjoyment, but I ask you to take a critical look at this spending habit—yes, I consider it a habit.

Consider the following example:

If you saved $44 a month ($525 annual lottery expenditure/12 months) and invested it in an asset that produced a 5% annual, average rate of return you would have $18,085 in 20 years! I don’t know about you, but that sounds like a safer gamble.


Even more disturbing were the demographics of lottery ticket purchasers. Hispanics, Asians, and African Americans spent more on lotteries as compared to Caucasians. Also, those with a reported household income below $13,000 spent 9% of their money on lotteries as compared to only 0.3% of those with household income of $130,000. What do the rich know that they aren’t telling you? GAMBLING DOESN’T PAY! They know that their financial interests would be better served by investing the money in a manner that actually provides a return (surprise, surprise).


What happens to the money that nobody wins? Last year, roughly $18 BILLION of YOUR money went back to the government to fund scholarships, education funds, senior programs, and more. As yourself the following question—Did you intend to pay the government before paying yourself and your family? If so, I applaud you for being so civic minded and putting the needs of strangers ahead of yours. Now, please don’t mistake my sarcasm for anti-philanthropy talk, but some of us need to remember the old adage “PAY YOURSELF FIRST”.


We have to start thinking like the rich in order to improve our financial future. If you don’t have enough education about personal finance—seek out someone who is knowledgeable, grab a book from your local public library, or do some internet research. The information is at your fingertips.


Most importantly, keep in mind that there is no magic potion, shot in the arm, or “get rich quick pill”. Building a wealthy future takes time. So, the next time you head out to pick up some lottery tickets, please ask yourself if there is a better use for your money. If so, don’t buy it. But, I will bet you 9 times out of 10 you can always find one. Now those are odds you can take to the bank!


Reference: “Q&A with The Lottery Wars author Matthew Sweeney”. Brad Tuttle. 61909. http://money.blogs.time.com/2009/06/16/qa-with-the-lottery-wars-author-matthew-sweeney/#ixzz0a4uzo1JI