The lottery: An “investment” for fools (with bonus lottery simulator!)

Over the years, I've done some foolish things with my finances. I've squandered money on comic books. I've speculated on risky stocks, hoping to make a quick fortune. I've paid a gazillion dollars — or something close to it — in credit-card interest and bank fees. I spent large windfalls on the latest technological gadgets.

No, I'm by no means perfect with money.

One trap I've managed to avoid, though, is the lottery. Playing the lottery has never tempted me. Maybe it's because I know the odds are always overwhelmingly stacked against the player — I know I can't win the lottery, so why bother?

Caveat: That's not to say I've never played the lottery. I used to play Sports Action, Oregon's NFL-based betting game, once in a while. And I've bought an occasional scratch-off ticket. But when I do these things, I consider them one-time entertainment expenses, not paths to riches.

A Fool and His Money…

Not everyone is so lucky. For some, gambling is an addiction. It may start as innocent fun, but it grows beyond that, becomes a financial funnel, draining dollars from their daily lives. And some in dire financial straits may actually view the lottery as an investment strategy!

According to this Wired magazine article:

While approximately half of Americans buy at least one lottery ticket at some point, the vast majority of tickets are purchased by about 20 percent of the population. These high-frequency players tend to be poor and uneducated, which is why critics refer to lotteries as a regressive tax. (In a 2006 survey, 30 percent of people without a high school degree said that playing the lottery was a wealth-building strategy.) On average, households that make less than $12,400 a year spend 5 percent of their income on lotteries — a source of hope for just a few bucks a throw.

Just how foolish is it to play the lottery? It depends on the game you play, of course. I once calculated that for every buck my brother spent on a scratch-off game, he could expect to get roughly fifty cents in return. (That's if he bought a bunch of tickets, of course. If you only buy a few, anything can happen.)

It's even more depressing to take a look at the odds for lottery drawings. Here, for instance, are the odds of winning the Mega Millions lottery. They're not good. You have about a one in forty chance of winning something. Your odds of winning the big jackpot (by matching the five main numbers and the bonus number) are roughly 1 in 175,000,000.

But that's pretty tough to visualize, right? I mean, 175 million is a big number. No worries! Rob Cockerham at Cockeyed.com whipped up a little widget that lets you simulate the Mega Millions lottery. This is a great way to see just how fruitless the lottery is.

I liked Cockerham's widget so much that I asked the GRS technical elves (who live next door to the GRS social media elves) to build one for me. Here, inspired by Cockerham's original, is the Get Rich Lottery simulator. How much can you win? (Note that this widget is a little fussy in Internet Explorer. It seems to work fine in every other browser, though. Go figure.)

In fact, because I'm just that geeky, I wrote down my results for 100 consecutive plays. (I used “quick pick” and “play these numbers 1040” times.) In other words, that's the equivalent of playing Mega Millions twice a week for one thousand years. In a millenium of playing the lottery twice a week, I never once won big. My biggest prize was $500. Other stats:

  • I “invested” $104,000 in the lottery simulator.
  • I “won” $11,554.
  • Thus, my total return was -88.89%.
  • After 100 virtual ten-year periods, the average I had left after putting $1040 into the lottery was $115.54.

My best result? After one virtual ten-year period, I had $386 remaining. I'd love to know how well you do playing with this lottery simulator; post your results to the comments below! Surely somebody out there in the GRS audience can win big!

Note: I'm not a complete stick-in-the-mud. I recognize that for many, the appeal of the lottery is that it's fun. The Mega Millions jackpot reached over $300 million last week, for instance. Kris and her co-workers each pitched in a buck to buy a ticket. This is cheap, harmless entertainment. My beef is with folks who view the lottery as a legitimate path to wealth. Sadly, there are many such people…

Better Bets

Almost anything is a better “investment” than flushing your money down the lottery toilet. In his book Stocks for the Long Run, Jeremy Siegel crunched the numbers to find the historical performance of several common investments. The results? Since 1926:

  • Gold has a real return (meaning: “after-inflation return”) of about 1%.
  • By my calculations (not Siegel's), real estate also has a real return of about 1%.
  • Bonds have returned about 5%, or about 2.4% after inflation.
  • Stocks have returned an average of about 10% per year, and a real return (or inflation adjusted-return) of about 6.8%.

These options are volatile, of course, meaning the returns one year can be negative (though not nearly as bad as playing the lottery), and the returns the next can be positive. If you're looking for a “sure thing”, you're left with so-called safe investments, such as savings accounts and certificates of deposit.

Savings accounts and CDs have paltry returns right now, but they're sure to rise as the economy improves. And even a 1% interest rate crushes an ongoing 88.89% loss on your money. (Not to mention that the lottery numbers I calculated above don't factor in inflation!)

Note: I can't find any data on the relationship between savings-account interest and inflation. If I had to make an educated guess, I'd say that savings accounts return about 1% more than inflation every year, meaning that they're on a par with gold or real estate in the long term. But this is just a guess!

Let's assume you inherit $100,000 and want to invest it. Let's also assume that you're going to put it one investment vehicle and leave it there for thirty years. (And that your returns on this investment will compound monthly.)

    • If you invested in gold or real estate (or a savings account), you might expect to have about $135,000 after inflation.
    • If you invested in bonds, you'd probably have about $200,000 after inflation.
    • If you invested in stocks, your could have over $750,000.
  • But if you “invested” in the lottery, you'd have nothing. After ten years, you'd have just ten bucks left. After 17 years, you'd have a penny — which you'd promptly lose. And again, the numbers for the lottery don't factor in inflation.

So, if you really want to strike it rich, don't play the lottery. Do something boring with your money. Take advantage of the extraordinary power of compound interest to get rich slowly. If you don't have a Roth IRA, start one. Use it to buy indexed mutual funds. If that sounds too complicated for you, then open a savings account.

There's no question: Playing the lottery as a strategy to gain money is a fool's game. Play the lottery for fun if you want, but don't do it because you think it's going to help your financial situation.

Bitter Irony

Many folks win big jackpots, only to lose the money — or their happiness. People are fools to play the lottery, and they often remain fools after winning. Some examples:

A 2001 article in The American Economic Review found that after receiving half their jackpots, the typical lottery winner had only put about 16% of that money into savings. It's estimated that over a quarter of lottery winners go bankrupt. Take Bud Post: He won $16.2 million in 1988. When he died in 2006, Post was living on a $450 monthly disability check. “I was much happier when I was broke,” he's reported to have said. Even when they win, lottery winners often lose.

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Nicole
Nicole
9 years ago

In the book Insufficient Funds, there’s a really fascinating chapter about lotteries that says maybe they’re not so bad. They function kind of like tax refunds for some people. We focus on the big jackpot, but people who play the lottery often get little jackpots. These little jackpots are often enough to buy say, a fridge. And they come with a relatively decent frequency. For people who are incapable of saving– they have no self-control or they have family members who claim their money, the lottery works as a savings account with a negative interest rate. They are essentially paying… Read more »

Nicole
Nicole
9 years ago
Reply to  Nicole

See Jim’s 30 March 2011 at 5:39 pm comment on the third page.

I like nested replies, but is there a way to have both nested replies and the numbers? Sometimes you want to reference someone else’s comment even if you don’t want to reply to it.

Jen
Jen
9 years ago
Reply to  Nicole

I used to play lotto in a small population state, and I always won back at least the cost of my tickets, and sometimes enough to buy an extra dinner out as well. Always. Then I moved to a huge state, and very quickly realized my odds were just so bad, it wasn’t worth it except as entertainment. So I do think Nicole is onto something, but would add the caveat that it depends which lotto you’re playing – the Mega, or a state lotto – and how many other people are playing the same lotto. Additionally, the people I… Read more »

jim
jim
9 years ago
Reply to  Jen

Jen, if you won more than you spent in any lottery then you were just LUCKY. That state may or may not have had better odds of winning but in total the players lose more money than they win.

Chickybeth
Chickybeth
9 years ago
Reply to  Nicole

I do not like nested replies and without numbered comments I now have no idea where I left off reading last night! Grrr. I liked commenting here because the format was different and now I see it’s changing to be a copy of other less interesting blogs. Too bad, blah.

Luke
Luke
9 years ago

One of the ‘lottery losers’ really stuck out for me, as he was much reviled in the UK press:

Michael Carroll (various criminal convictions yada yada), was/is? an obnoxious chav with very little to recommend him to society 😉

I suppose the US equivalent of chav might be trailer trash?

Elle
Elle
9 years ago

I tried the simulator and I “won” $2, giving me a -98% return! Definitely not helpful for my retirement portfolio, LOL.

It makes me feel better about my decision not to play lotto. I’ll stick with investing bit by bit into my Roth IRA.

Jay
Jay
9 years ago

great post. hopefully many will find it enlightening. my only question/complaint is it looks like you ripped off Rob Cockerham’s idea right to a “T”, and added what I assume to be an affliate link (FDIC savings account) when you run the results. While the post refers to his product, you do give people the code to post. Does this include credit to the original creditor? Does it include an affiliate link? Did you get permission (or is he ok with) you using his idea so closely? The danger is that you could be monetizing someone else’s exact creation without… Read more »

Sam
Sam
9 years ago

A long time ago my Mom or Dad told me that the “lottery is for stupid people who like to pay voluntary taxes.” Kind of harsh and really I would change the “stupid” to “uninformed”.

I think the media should be required to disclose the chances for winning the lottery each time they post a story about someone winning $100 million. I also think it is wrong that the government is taking advantage of uniformed people and the people who can least afford it to collect revenue.

Damian
Damian
9 years ago

It would be interesting to see what would happen if you were allowed to spread your risk by purchasing multiple tickets.

I have family that routinely buy say $20 tickets at a time. This ups the chances of scoring a ‘small jackpot’ as Nicole pointed out above.

Personally, I think they would be better off with the single ticket (for entertainment value) and putting the remaining money into a savings account.

Maybe things are different in the US, but it’s difficult to think that it would be impossible to get a ‘free’ savings account, post office savings.

Anne
Anne
9 years ago

Someone will win the lottery, but it won’t be you.

(Paraphrased from Struck by Lightning by Jeffrey Seth Rosenthal)

Raghu Bilhana
Raghu Bilhana
9 years ago


21% (Lets round it off to 25%) of Americans feel that the path to financial freedom and riches is by playing the lottery. Might be that 25% of Americans consider playing the lottery as the only investment strategy.

“Asked the most practical way to accumulate “several hundred thousand dollars,” 21 percent chose winning the lottery, according to a survey by the Consumer Federation of America and the Financial Planning Association.”

aggressive saver
aggressive saver
9 years ago

i’m not a big advocate of the lottery in any way, but i do tend to play for fun occasionally. but, i do apply some math / probability theory to the game. wait! hear me out. i’m not a quack! you see, by your numbers above, the odds of winning the mega lotto is 1 in 175,000,000. If the payout is $175,000,000 (and assuming only one winner), your expected payout is actually break even on that $1. and, by purchasing one ticket, your odds of winning are infinitely higher than if you purchased no tickets, but purchasing a second ticket… Read more »

MC
MC
9 years ago

My in-laws always talk about what they’re going to do when one of them hits it big in the loto… I then begrudgingly say, “it’s a tax for the stupid” then they say they’ll leave me out of their bountiful fortunes… then we laugh. We have gone on to exchange mostly scratch-off tickets for B-days between the adults. I won $100 his past year. 🙂

Bogey@BackNineFinance
9 years ago

@ Nicole (#1) –

The lottery as a savings account with a negative interest rate for some people? That’s literally the most absurd comment related to money that I’ve ever read.

You had to really stretch this morning to come up with a counter argument in favor of playing the lottery.

AndrewL
AndrewL
9 years ago

Can you modify the simulator to pick random numbers for each drawing? that’s more realistic.

Obviously, While the chances of you winning the lottery are almost zero, someone does indeed win the lottery, and chances are it isn’t you.

I like to throw a few bucks in once in a while when the mega millions Jackpot reaches 150million or more. It’s fun, and entertaining. You pool your tickets with your family members and talk about what you’ll do with all your winnings, and when you don’t win, oh well, maybe next time.

Andrew
Andrew
9 years ago

It’s funny that this post showed up today. Just this morning, I passed a billboard on my way to work for the Florida lottery, and it got me thinking about how ridiculous it makes people. The funniest ones to me are the people that only play when the jackpot is really large ($100 million or more), as if anything less would not be worth it. I used to joke that the lottery was my parents’ retirement plan, but when I think about how much they have likely spent on tickets, it’s really quite sad. Playing once in a while is… Read more »

Nicole
Nicole
9 years ago

@11 Bogey I don’t play the lottery. I don’t recommend playing the lottery. But for someone who cannot save on their own, the lottery is less expensive than many of the other vehicles that they could use to buy durable goods. Perhaps you’d feel more convinced in the developing country context where secure banking options are not available. The chapter talks about that too. And I didn’t write the chapter, so I didn’t have to stretch. It’s a very thought-provoking book so I would recommend reading it yourself and making your own informed conclusions. @1 JD I think if you… Read more »

Anonymous
Anonymous
9 years ago
Reply to  Nicole

Wow! You are working very hard to paint the Titanic here. These are some of the most ridiculous arguments I’ve read in a long time.

They just don’t hold water. Just because someone puts it in a book doesn’t make it so.

Your argument boils down to: ‘Play the lottery cause you got no other options for your money’.

Let it go…

Ash
Ash
9 years ago

I don’t like the phrasing, “People are fools to play the lottery, and they often remain fools after winning.” I think that’s painting with too broad a brush. If it’s for entertainment I don’t think it’s foolish. You’d spend more on a night out at a nice bar or at the movies. Now, if this is the person’s primary way that they attempt to achieve wealth, then that is foolish. But, to call anyone that plays a fool is a little harsh. I’d probably say, “Spendthrifts that win the lottery often end up back where they started–if not in a… Read more »

getagrip
getagrip
9 years ago

I have friends who won’t buy a ticket, even for fun, unless the jackpot is over a specific amount. They figure the pain they’ll go through isn’t worth it unless they’re winning at least X million. I play once in a while. I look at it like throwing coins in fountain. Nice if the wish comes true, but I’m not counting on it. I do see the attraction if you are scraping buy. You don’t see how saving five or ten dollars a week in a saving account will ever make you rich. You can’t see a future where you… Read more »

sjw
sjw
9 years ago

I’m told my grandfather once won a car as part of a charity lottery. Apparently when he was congratulated, he said that he’d need to win a car again tomorrow to break even.

Peter L
Peter L
9 years ago

Really valuable post, JD. I play the lotto every few weeks and of course am always disappointed. The simulator let me know that my disappointment is unlikely to let up anytime soon. 42 may be the meaning of life but it only won me $2 once as the Mega Millions ball.

However, the second half of the post is even more valuable, comparing the long-term rates of return of the other vehicles. A good reminder to get my money out of savings and into an index fund as quickly as possible to give more years for compounding.

Stephanie
Stephanie
9 years ago

There actually IS a safe way to play the lottery AND capitalize on modest returns in a savings account; it’s called prize-linked savings. Tested in Michigan Credit unions in 2009-2010, proze-linked savings an innovative savings product that links the lottery / a raffle system with regular savings deposits. Savers get to experience the “thrill” of the lottey by participating in monthly drawings for prizes like mp3 players and cash, while simultaneously building good savings habits and accumulating a good amount in their savings account: http://www.d2dfund.org/our_work/building_savings/prize_linked_savings

Marsha
Marsha
9 years ago

Actually, I love the lottery, although I’ve never bought a ticket and never will (I’m a mathematician). I figure it keeps my taxes lower when other people voluntarily give their money to the government.

smirktastic
smirktastic
9 years ago

Hi JD -not to be nitpicky, but here in Wis. we spell it Milwaukee, not Milwaukie. 🙂

J.D.’s note: D’oh! I’ll fix that. I live very close to a Milwaukie, so this always throws me.
Tom
Tom
9 years ago

HA! The first time I ran the simulator, I did it one time and won $2! In your face!

…then I did the twice a week for ten years thing and promptly lost 88% like you. damn.

Kyle
Kyle
9 years ago

My wife and I only play the lottery when a group of people do it at work. I view this as paying $1 or $2 insurance against the group actually winning. How terrible would it be if they actually won and we didn’t join in? It would definitely stink to be the only one left at work!

Stanley Parent
Stanley Parent
9 years ago

Just want to make a couple of points. For one, I consider buying a lottery ticket is a cheap way to buy dreams. I buy 1 ticket per draw and here the odds are one in 14 millions so you have one chance in 14 millions of winning. If you buy 2 tickets, the odds are not 1 in 7 millions buy 2 in 14 millions, so I buy 1 ticket and dream, if I don’t buy a ticket, I have 0 chance and no dream. Secondly, I do not manage my budget around winning the lottery, but I include… Read more »

Dan
Dan
9 years ago

I agree with the point of this posting. People who spend significant amounts of money on the lottery would, on the average, be better off with normal investments. However, the lottery provides more leverage than any form of traditional investment. For a buck or two a week, you could become a multi-millionaire. You would be delusional to count on it happening, but somebody wins. If you don’t play, it definitely won’t be you. If you do play with one or two dollars a week, there is very little down side. Sure, you could save the $100 per year, invest it… Read more »

Dan Fleming
Dan Fleming
9 years ago

I ran the simulator 10-15 times each with the 10 year option selected. On the last one I won $21666! That would put me ahead overall, but barely considering that the next highest “win” over a 10 year period was $240.

So JD, one of your readers hit it big!

Adam
Adam
9 years ago

The only time I ever play is when my finance group at work (you’d think accounting types would know better, but no..) do one of those “collect $2 from everyone and buy tickets as a group” things. I’m tempted to take control of it, collect $2 from everyone every other week for a year, then at Christmas give everyone $25 saying “we won we won!” and stop throwing away the money on lotto tickets but it seems ethically specious reasoning to do this. Thing is, I can’t not contribute because it makes me look like a jerk at work if… Read more »

J Macey
J Macey
9 years ago

My argument has always been looking at the return on investment of each ticket. Your link to the Mega Millions analysis includes that toward the bottom, and that’s where the important stuff is.

If you’re doing any analysis based on repeated play, the return on investment is what your long-term trend is going to be. Assuming a grand prize of $56m, that works out to a 50% loss on each ticket.

Anyone who does that basic analysis can tell that playing the lotto is not a wealth-building strategy.

Eugene
Eugene
9 years ago

We actually have a concept in South Africa called ‘stokvels’. Basically, a group of (usually poor) people each contribute a certain amount of money every month. Then at the end of the year, one person gets to take the pot.

I’m not sure how they decide who that is, but it rotates so everyone eventually gets a turn. Basically, it’s more forced savings since you have to be accountable to other people.

What do you think?

Tom
Tom
9 years ago

@12 AndrewL, your expected payout over the long run ought to be the same. It is a gamblers fallacy that a combination of numbers are “due” to appear, but it doesn’t make you less likely to win by playing the same numbers over and over again.

gwyneth
gwyneth
9 years ago

I’m a little bothered by the people who defend the lottery because they play once or twice a year (or decade) for fun. The government has made a conscious decision to raise funds in a way that dis-proportionally affects the extremely poor by selling them false hope, and frequently increasing their need to become dependent on the government. I suppose it is the same argument at privatizing social security or legalizing drugs. You balance the freedoms of those that will use responsibly with the welfare of those who are too impulsive or too ignorant to do anything other than crash… Read more »

Tim @ Faith and Finance
Tim @ Faith and Finance
9 years ago

There was a story on Freakonomics a few weeks ago about how the idea of a bank sponsored lottery might help people save more. The basic premise was that for every dollar you saved in a bank, you were entered into a drawing for a large sum of money. The account didn’t pay much interest (maybe close to 0) but people ended up saving even more and the bank made one lucky person really happy each month!

sarah
sarah
9 years ago

There is so much judgment of the very poor for gambling. On the surface, how could you not get mad about someone getting public assistance spending that money on the lottery? However, having worked closely with a lot of very poor people (and by very poor I mean homeless or people who make just enough to pay their rent and can’t buy clothes, don’t have phones, etc) I’ve found that a lot of people buy lottery tickets when they’re already in an impossible situation. It seems foolish if you only have $20 to your name to spend even $2 of… Read more »

Dan M53
Dan M53
9 years ago

I play the MegaBucks and Powerball along with 16 others at my work (only when jackpot is over $50MM). It’s worth the buck to me to fantasize about what I’d do with the money. The part about skiing and golfing in the same day is the best! Also, inviting my well-off brother and his family on a nice long cruise as repayment for his generous Christmas gifts to my kids is nice to think about. In a way, I’d guess that it’s the same fantasy rush that people who pay for porn get (but I DO NOT do that). I… Read more »

Bryan Foltice
Bryan Foltice
9 years ago

This tool is awesome! First, because we can play the lottery and not lose our hard earned money. Also, it proves that playing the lottery is a total waste of money. I ran the simulation 50 times and averaged a loss of $922.68 or -88.72% return. To your point on real returns (rate of return – inflation) on our savings accounts these days, you can see that inflation was 1.1-1.2% between June-November 2010. That’s almost directly in line with what I earned at ING last year. In 2008, money markets averaged 2.89%, while inflation averaged 3.8%. Here’s the link to… Read more »

Sarang
Sarang
9 years ago

I really enjoyed the series of Freakonomics blog posts and podcasts on the “No-lose lottery” that Tim mentions above. Definitely worth a read/listen: http://www.freakonomics.com/?s=no-lose+lottery&x=0&y=0

MT
MT
9 years ago

@9, I agree, as long as you go in having some semblance of an idea of what the odds really are, and know that buying $100 worth of tickets DOES NOT substantially increase the odds of ‘winning big’ vs. a $1 ticket.

I view the lotto as an opportunity, once or so a month, to buy a $1 ticket and day dream about what I’d do if I hit it. An occasional $1 ticket for a half a day’s worth of daydreaming is generally worth it, in my mind.

Pamela
Pamela
9 years ago

It’s the “just for fun” excuse that allows some people to gamble at all. I remember my husband deciding he was willing to lose $1 worth of quarters in a slot machine at Atlantic city. He played his first quarter and got it back with another besides. I saw that as a 100% profit and would have no problem walking away with another quarter for the laundromat. But he kept playing until he met his goal to lose $1 worth of quarters (besides the 1 or 2 quarters he won as well). Going in with the mindset that he was… Read more »

John Sherry
John Sherry
9 years ago

I guess it’s not called a lottery for no good reason. I’ve read there is more chance of you being killed by a donkey than actually scooping the jackpot (unless you work with donkeys, in which case BE VERY CAREFUL!). It’s the big prize in one go that lures but people think if they’re only throwing a few bucks at it here and there in can’t harm – but it soon adds up. So I agree trying to win the lottery is not what invest-meant.

Shari
Shari
9 years ago

Some family members of mine won a good sized lottery ($180,000). They played the lottery occasionally for years. When they won the money, they used it to purchase a reasonable house (houses are cheap here), a new car, paid off their bills, went on a cruise and then invested the rest. Since they now have no debt and no house payment, they are much better off than they were before. In their case they were so smart with the money they won that it really did change their lives for the better. However, I know they are are exception and… Read more »

the other Tammy
the other Tammy
9 years ago

My fiancee and I went up to Niagara Falls with $50 we intended to blow at the casino. We figured it as an evening of entertainment, and when the money was gone it was gone. My lucky fiancee won $1500 on a slot machine, stood up, and said “let’s go home now”. Other people would have tried to turn that into bigger winnings–we just wanted to get out of there!
(We used our winnings to pay cash for our honeymoon!)

The bottom line is–don’t play more than you’re willing to lose–if you win it is a bonus!

Sara
Sara
9 years ago

For everyone worried about the lottery pool at work – my answer when I’m asked (and politely decline) is that if they win and hit it big, I figure I’ll get an instant promotion and big raise as part of the condition for taking over all of their jobs when they quit.

Kevin
Kevin
9 years ago

@Andrew: “The funniest ones to me are the people that only play when the jackpot is really large ($100 million or more), as if anything less would not be worth it.” You know, I can understand that sentiment. Say you play a little state lottery, and the jackpot is $2.5 million. The stars align, and you match all 6 numbers. Even luckier, you hold the only winning ticket, so you don’t have to share it with anyone. You take the lump sum, and get $1.2 million. After taxes, you’re left with $800,000. Your name and picture are splashed all over… Read more »

Jacci
Jacci
9 years ago

I am not a lottery player. Not only are the odds pitiful, the idea of winning an enormous amount of money scares me. I would like to know how many people who bank 5 mil+ are still happy (I.e. Happily married, have healthy relationships with family, etc.). We don’t make a huge amount of money in our family, but I would not want to put any of those things in jeopardy for a sudden windfall. On the other hand, I could live with $500k. I don’t think that would change our family dynamic as drastically.

Laura in Cancun
Laura in Cancun
9 years ago

My friends and I like to go to the casinos about once a month, where we each play $10 – $20 every visit. Since we always bet very low, that money will usually last us quite a few hours. We have fun, and we consider the money to be entertainment money, not an investment. On different occasions I’ve won $100, $130 and $400, but I would say over the last 2 years I’ve probable just barely broke even (I usually lose my $20, and spend a few bucks on drinks every visit). At these casinos, we often see people who… Read more »

Jenn
Jenn
9 years ago

I could tell my sister that she would be better off putting her $2/week lottery habit into a savings account that earns 1% interest for 10 years. Probability she will end up with a sum of money that will significantly change her life: 0. That said, I think having a savings account with a decent lotto bonus each month is a great idea. She doesn’t need $100M to change her life, but she needs more than $1000 over ten years. So if she can put $1.80 in savings and have 20 cents go to a lotto with a smaller payout… Read more »

mike
mike
9 years ago

J.D.-I come from a different view point. I don’t see the lottery as a chance for fun and I dont’ think most people even your so called “fools” or the poor really think they are going to hit the jackpot. I think people are buying a dream, like #24. I personally try to play the powerball and megamillions, which is $4 a week, about $200 a year since I miss a couple draws. I am debt free, max the 401k, and roth and I am doing well. Its a fantasy nothing more, like reading a $5 comic book. $4 a… Read more »

Tyler Karaszewski
Tyler Karaszewski
9 years ago

I have never, ever in my life heard anyone claim that a lottery ticket *was* an investment. I’m not sure who this post is being written for, and I’m almost entirely sure that whoever that is doesn’t read GRS. J.D.’s note: Since this post was actually inspired by a GRS comment, I can assure you that there are GRS readers who do think this way, Tyler. Maybe not many, but some. And, as the article I cited in my post states, 30% of those who didn’t finish high school think of the lottery as a legitimate wealth-building strategy. This is… Read more »

Anonymous
Anonymous
9 years ago

This Tyler dude has got to be the most contrary person I’ve had the displeasure of repeatedly coming accross.

Must be a very unhappy person. Does he ever have a positive response to anything?

Nicole
Nicole
9 years ago
Reply to  Anonymous

Hm… I guess Anonymous here is not going to buy t-shirts for either Team Nicole or Team Tyler.

partgypsy
partgypsy
9 years ago

This gets into the whole moral question is it ok for the government or free enterprise to legalize items that are not harmful for the majority of people, but a minority? I’m thinking alcohol and lotteries. Most people know to indulge in moderation, but there is a subset it is a real destroyer of lives. But then again cigarettes are still legal and they pretty much have a 100% chance of harming one’s health and finances. I dislike the argument people should never play lotteries because it is mathematical suboptimal. Most enjoyable things in life are suboptimal. Should I never… Read more »

sarah
sarah
9 years ago

Tyler, I was wondering the same thing. Not exactly a news flash that playing the lotto is a bad investment.

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