Lottery Tickets: Throwing Away Your Money
I want to tell you a story. I remember one day I was in a major shopping centre, waiting to go and see the dentist. I was early and so I sat down on a seat outside a newsagency and just watched the people going by.
I remember watching this middle-aged lady go up to the counter at the newsagency and buy an instant scratch-it ticket. She proceeded to walk directly, and unerringly, straight towards a bin that was just outside the shop, scratching the ticket as she did so.
By the time she had finished scratching she was at the bin and threw the (losing) scratch-it away and walked off. It was as if she knew she was going to lose and was resigned to that way before she ever made it to that bin.
I couldn’t help but think that she would of saved a lot of time if she had just thrown the $5 she paid for the scratch-it straight into the bin. It would have had the same result: she still would be $5 out of pocket.
This one event, that lasted all of about 30 seconds, had a profound effect on me and cemented my thoughts on scratch-its and lotteries: they are a complete and utter waste of money.
If you head over to the Golden Casket website, which is the company that owns and runs Gold Lotto, Power Ball, Scratch-Its, Oz Lotto and more, they will tell you that the odds of winning the first division for any of these games are in the millions-to-one.
For example, if you play the standard 4 game panels in Saturday’s Gold Lotto, the odds of winning the first division are 1 in 2,036,265. To put that into perspective, if you played those 4 games each week you would have to play for 9,789 years before you would be statistically guaranteed a win. Once.
To put this another way, if you and all your descendants played the same games and all lived until you were 65 it would take 150 generations to get a win.
And the cost? In an average life time, say from 18 to 65, if you played each and every week, hoping to win, the total cost over your life time would be $6520.80 (assuming the cost remained the same, which I am sure it won’t).
That may not seem like a lot of money, but what if you saved that money each week rather than buying that lottery ticket, how much would you have? By the time your sixty-fifth birthday rolled around you would have amassed a total of $33,925.00! (assuming an interest rate of 6.9%).
As you can see, you would be much better off saving that money rather than buying that lottery ticket. Unless of course you win - which is what I am sure a few you are thinking - but look again at the odds of winning. Do you really think it’s a wise investment? You would be better off taking that money to the casino.
But to put my money where my mouth is and to prove a point, I am going to start an account in which I deposit the price of a lottery ticket in each and every week, starting this Saturday. I will do this each week until I get enough in there to start investing it and I will show how it’s better to hang on to that money rather than throw it away like the lady in my story did.
You will be able to track how much I have in the Anti-Lottery Fund by the total I have in the right-hand column of this site.
This is obviously a long-term experiment, but one which I hope will open a few eyes and sway a few minds.
Do you buy lottery tickets or scratch-its?
Just before I go I thought I would show you a very humourous image I found by NotionsCapital. I laughed out loud.
Image credit: qnr
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bsidefilms: Glad you liked the illustration — enjoyed your post and linked it to mine.
I put the “More Americans” image together for my post about the lottery in the District of Columbia at
-mlhttp://notionscapital.wordpress.com/2007/08/26/civic-action/