As I sit down at my computer this morning ready to teach you a simple method to help you save up for a purchase, I feel the necessity to abandon that lesson until my next post in favor of writing some thoughts about the latest craze. As I sit here, lottery fever is sweeping America. Tonight’s Powerball drawing is for an estimated $500 million. That’s half a billion dollars if they don’t raise it again.
Everyone likes the idea of trading $2 for $500 million. The common reasons for buying a lottery ticket are ‘You can’t win if you don’t play’ or ‘Somebody has to win it’. Yes these two facts are true. But does that mean you should actually buy a ticket? There are many arguments I can make in this article like reasons why you shouldn’t try and get rich quick. I could argue what happens to many lottery winners or how investing the money yourself will mathematically get you a much greater return. I could point out the difference between the cash and annuity payments options and how the various taxes including income and gift taxes many times leave people with nothing. Rather than make those arguments, I would like to appeal to your common sense.
Yesterday morning on Good Morning America, the argument was made that an individual can increase their odds of winning by doing a few simple things. I won’t address the probability issues with several of their statements except to say they encouraged individuals to buy as “many tickets as you can afford”. Their argument was if you buy multiple tickets, each with different numbers, you increase your odds of winning. Although this is a true statement according to probability analysis, the odds of winning still are against you. Plus, encouraging people to buy as many as you can afford is a very vague statement for many people. Most don’t know what they can afford. My argument is nobody can afford them as the average return per dollar is about 55 cents. Every game in Las Vegas has better odds than that. Why do I think they are bad? Outside of the fact the lottery is a tax on the poor; I like to look at the weird things that are more likely to occur to you to demonstrate the absurdity of playing the lottery.
I saw the Good Morning America clip on the ABC, Good Morning America, Yahoo page. If you want to see it follow this link. Notice there is an article written below the video. If you read it, you will see the unique odds of things that are more likely to occur. These odds were calculated by an Emory University mathematics professor named Skip Garibaldi. What does he say is more likely to happen to you than winning the lottery? You are three times more likely to die from a coconut falling and hitting you in the head. You are more likely to die from fireworks or a flesh eating bacteria. A doctor is 100 times more likely to guess the exact second a baby will be born than to win the lottery. I have heard it said before that one has the same odds of being struck by lightning twice in life and surviving than to win the lottery.
When it comes to spending my $2, I can think of many things I can do with that money that will benefit me more than the extreme rare chance I will win the lottery. Find something else to do with your $2, write down the numbers you would have chosen, watch the lottery, then be thankful you didn’t lose $2. Yes, somebody has to win it but making that statement is like saying ‘Somebody has to get hit and die from a falling coconut’. Doesn’t that sound ridiculous? If not, by all means buy your ticket. Just keep your eyes open for those falling coconuts.