Playing the Lottery and Investing
The lottery pot is the biggest it’s ever been. And lines are forming to buy a ticket.
Yet, the best way to play the lottery is using another approach. After all, aren’t you playing the lottery to get rich? Here’s a way to get rich with a greater probability of success than playing the lottery.
If you are a lottery player, I want to help you.
If you put $50 per month in the lottery over 10 years, you will have spent $6,000.
The odds of winning the powerball or mega millions is roughly 175 million to one says Kimberly Amadeo in a recent The Balance article. That’s about the same chance as getting hit by lightning or dying in a plane crash. I don’t know about you, but I don’t know anyone who has gotten hit by lightning or died in a plane crash.
You are not going to win the jackpot! It is so unlikely that it’s not worth considering.
You may win once in awhile, but it’s unlikely you will come out ahead with your $50 per month lottery payment!
Do not click off yet please. I have an alternative for you. Please stick with me here, this will offer you a better likelihood of making money from that $50 per month lottery payment. Following is the best way to play the lottery.
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Where are the Lottery Players?
Lottery players are everywhere. Each one hopes that their ticket holds the million dollar prize.
Last week, while visiting my local drug store, the guys in front of me were so excited. I watched to find out why. They bought a bunch of lottery tickets, and before leaving the store they pulled out their coins to scratch off the winning numbers. These guys brimmed with optimism. It was as if they knew they were going to win. (Find out at the end if they won.)
Every time I head into the supermarket, there is a line at the lottery counter.
Several years ago, my neighbors spent $75.00 per week on the lottery. They bought a gadget that even picked the numbers for them. And they actually won regularly (Just not more than they lost).
What do all of these lottery players have in common? The players believe they have a reasonable chance of hitting it big.
What’s My Chance of Winning the Lottery?
According to a legacy Business Insider piece by Lubin and Kelley, “The Lottery is Preying on America’s Poor”, an average lottery player wins back $.47 for each dollar played.
Do you want to keep playing a game where you pay $1.00 and win $.47? It doesn’t sound fair does it?
How likely is it that you will ever win the lottery?
If you still don’t believe me, look at your own situation. Keep track of all the money you spend on the lottery and all the money you win. What does your own experience tell you? Overall, have you made more than you lost?
So, if you’re tempted to play the lottery, consider the odds. Are you going to be the one in a million person who hits it big? It’s more likely that you’ll get hit by lightning or be in a car crash than win the lottery.
Why are the Poor More Likely to Play the Lottery Than the Rich?
The rich didn’t get that way by playing a losing game.
The statistics are so clear, that the poor play the lottery more often than the wealthy. And the poor can less afford to play the lottery than those with more money.
Best Way to Play the Lottery-How to Win
Try this strategy instead of playing the lottery.
1. Get a big jar and drop in the money you spend on the lottery.
2. At the end of the month, put the money in a bank savings account. Do not touch this money for any reason. After all, you didn’t use it before, you spent it on the lottery, didn’t win, and it was gone.
3. Every month, keep putting that lottery money in the jar, no excuses. Do not stop.
I’m going to guess that you spent about $20.00 per week on the lottery. At the end of the year, you’ll have $1,040. At the end of two years, your lottery money will be worth $2,080. And just assume that interest rates go up a bit in year 3 and you start earning 2.5% on your money, at the end of year three, you’ll have $3,103.
You win $3,000 by not playing the lottery. Not a bad guaranteed jackpot! And if you keep it up for 10 years, your winnings from not playing the lottery will grow to $11,031.
“I agree. I have been saving the $6.00 per week that I used to spend for lottery for the past 6 years. I am a winner every week!” J.W.
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Best Way to Play the Lottery is Not Playing – Guide to $1 Million Without Playing the Lottery
And if you really want to reach a million dollars, it’s possible. But, it takes time and determination. You don’t even need to be really smart. The power of compounding returns is a miracle wealth builder. If you want to end up a millionaire, here’s how to proceed.
Start at age 25 and stash $500 per month into an investment account that earns 7% annually. At age 61 you’ll have $1 million. Maybe $500 per month sounds like a lot now, but your employer might kick in a bit (allowing you to contribute less). And over the years, you’ll get raises that will make it easier to save and invest.
It’s easier than you think to invest a set amount every month in an investment account. You can do this with your workplace 401(k), a Roth IRA or a traditional brokerage account. (I do all three!).
Next, choose a sensible mix of investments. It doesn’t need to be fancy. Click on the link for a few of lazy investment portfolio ideas.
Then, don’t cash out your investments for many years. That’s right, you can’t sell when your car breaks down or you see a new game console that you must have.
This isn’t a get rich quick scheme, but a sensible long term approach to wealth building.
And if you want Free investment help and management, M1 Finance has pre-made investment portfolios from which to choose. Or you can create your own!
Answer; The guys at the drug store, lost. Losing the lottery demolished their hopes and stole their cash.
Have you ever played the lottery? What was the outcome?
Updated October 23, 2018