Buying a Lottery Ticket Isn’t as Stupid as You Think

iStock 000017864290XSmall Buying a Lottery Ticket Isnt as Stupid as You ThinkBuying lottery tickets is really stupid, right? Money pros call them a stupidity tax.  You’ll never win, and even if you do, the prize will be split between a bunch of people. After all, 1 in 175,223,510 according to the Powerball site is the chance of winning the jackpot. Odds of being struck by lightening in your lifetime? 1 in 10,000 from the National Weather Service Lightening Safety site.

I disagree. Buying a lottery ticket isn’t as stupid as you think….. IF….

If you can afford to spend the 2 bucks on the ticket once in awhile, a powerball ticket can buy you:

Hours of Entertainment

On rare occasions when I buy a ticket, I typically spend at least an hour doing math – figuring out how much money I would get each week, month and year if I won the jackpot. I figure out how much of it I would need to invest to guarentee myself tax free income of $100K a year for life. I figure out how long it will take to get that amount to invest if I take the annuity. I figure out whether it would be better to take the lump sum or the annuity.

I spend a few hours dreaming about the things I would get and the things I would do with all that money. I spend a couple thinking up charitable project I would fund and projects I would undertake. Would I start a business? How about a family foundation? Would I set my brother up for life so he didn’t have to worry about losing his house?

Hope

Sometimes a person just gets discouraged plugging away at their day to day job or business, sometimes getting ahead finacially, sometimes falling behind. What would it be like to not have to worry about money?

A Chance to Realize Your Dreams (without the money)

By dreaming about what I would do with the jackpot winnings, I force myself to think through what is really important to me. All of my life has been focused on making ends meet and building up an asset base to help the family out. If, all of a sudden, I no longer have that purpose, what is going to be my purpose – what is it that I should do. Once I figure that out, I start thinking – Why do I need a lot of money to do that? I could do that now – at least on some scale. Hence, I start realizing my dreams, even without the money.

Opportunities to Think Outside Your Daily Realm

Without the need to work, my world would change. If I had a bunch of money, my relationship with others might change. Thinking through these things helps me to better understand what I want out of the world and my relationships. Knowing those things I can then work to mold them into what I want.

I think that money is power (at least to some degree). If I had the power in my relationships, how would I change them and would the relationship hold up to that change?

Good Feelings for Giving Support to Government and Schools

The Missouri Lottery site claims:

“Beginning with fiscal year 1994, Missouri Lottery proceeds have gone solely to the state’s public education system, representing approximately 4 percent of the total funding for Missouri’s public schools “

The Kansas lottery site says:

“The first $50 million is divided by a formula which first transfers $80,000 to the Problem Gambling and Addictions Grant Fund. Then 85 percent of the balance is transferred to the Economic Development Initiatives Fund, 10 percent to the Correctional Institutions Building Fund, and 5 percent to the Juvenile Detention Facilities Fund. Any receipts in excess of $50 million must be transferred to the State General Fund. “

The New York State Lottery says:

“The Lottery contributed nearly $2.9 billion to help support education in New York State in fiscal year 2011-12 which is nearly 15 percent of total state education funding to local school districts”.

Besides, someone has to win, right? Why not you?

However, buying lottery tickets is stupid if you can’t afford them or if you are addicted to buying them, after all, you are actually just spending the money – the same way you do when you buy a movie ticket or an iced coffee. A lottery ticket is not a retirement plan and it’s not an investment!

Although I swore I would never play when the lottery first started, I confess that I do buy a ticket once or twice a year, just for fun.

Do you buy lottery tickets or pursue other forms of gambling? How do you justify your spend?

 Buying a Lottery Ticket Isnt as Stupid as You Think

Comments

Buying a Lottery Ticket Isn’t as Stupid as You Think — 46 Comments

  1. A family member used to give us scratch cards and lottery tickets for Christmas! While cheaper than the average gift, sometimes one of us would win $20 or $50, and it was cheap entertainment.

  2. Thank you for making it official that I’m not totally stupid. Now I can point to this post and say, “See, here’s an expert validating me!”

    I also buy three or four tickets a year as cheap entertainment. With me it’s a license to dream. I’m too logic bound to dream without a ticket. (I know, but hey, nobody’s perfect!) But when I fold that ticket and put it in my wallet, the castles in the air begin forming. For maximum effect I buy the ticket as long before the next draw date as possible to give me more time to dream. And I only buy big tickets. I know, there’s zero logic in that, but we’ve already established that this is not about logic.

    Escapism at a buck a ticket. Yep, sorry, I no longer buy Powerball tickets. $2 is way too much to spend on a daydream, so Megamillions is all I buy, and only when the number gets way big, like $150 million or so. In reality, $10,000 would be welcome — there are many holes it can plug. But who can dream on $10K? If you’re going to dream, might as well dream big… right?

    All my logical friends say it’s a waste of money. All my logical friends are right of course. But they can’t see the fun rolling around inside my head for two or three days. For a buck now and then, cheap at the price.

    • Absolutely right – buy the lottery ticket as far in advance as possible to maximise the dream. Otherwise in the UK, some goes to the ‘good causes’ and even a few percent goes to the taxman. I guess it’s the same elsewhere (although the UK seems to be doing very well with the Euromillions recently – quite a lot of winners here!).

      There are two rational reasons for playing the lottery. The first is that you are happy to participate in distributing your wealth to the needy as identified by the lottery organisers. Now this sounds the same as being happy to pay your taxes and to some people, this is fine as is playing the lottery to fund the community. My father was proud to pay taxes because it meant that he was sufficiently well paid and it was helping improve society. I am not sure he would be quite so pleased now but he passed away some years ago.

      The other rational reason is for very poor people – it is called utility in statistics. For them even a modest win on the lottery would represent a life-changing event. So they don’t have to win the big prize. And they are unlikely ever to be able to amass even a few thousand dollars/pounds/euros/whatever. So there is no chance to change their lives in their day job but there is a small but non-zero chance by playing the lottery – or gambling.

  3. Rarely my wife and me buy a lottery ticket. Part of why it’s stupid for us is that it depresses us in the end. Becuase of course we don’t win. And so all our dreaming and hoping and dream-like planning go right down the toilet, and there we are with the little money we started with. :-( So we try to stay away from it. But if other people can keep their heads on straight, better than us, then I say go for it! Fund our schools! :-)

  4. If you buy a ticket or two a couple times a year, can afford it and view it solely as entertainment that is your decision. What I can’t justify are the people who haven’t saved even an emergency fund and spend $20+ a week on scratch offs and other tickets.

  5. I’ve bought maybe a handful of tickets in my life. If I am going to gamble it will usually be at a casino, which we don’t do very much of. We really don’t take a lot of money and just sort of view it as entertainment.

  6. I’ve never bought a lottery ticket, but my fiance buys them occasionally. The enjoyment we get from talking about what we’d do with the money alone justifies the purchase price. I don’t ever expect to win anything, but it’s fun to dream.

  7. I think that as long as you buy them in the right context- fun – then they’re great. It’s only if they are your only retirement plan or you’re going broke buying them that you have issues!

  8. I play every Powerball draw… $2/draw, same number every time… $208/year all at once. Some people buy Starbucks… I play Powerball and make lattes at home.

    Do I think I will win? Nope.

    Do I dream about what I would do if i did win? Nope.

    Would I have to be committed if I didn’t “waste” that weekly pocket change and my number actually came up? Without a doubt.

      • Sorry… didn’t see this… I get the slimmest of chances of winning a massive return (and I make a pretty good latte now too). Your chances of winning are not zero notwithstanding how close…the monthly winners are evidence of that. For me it falls under the category, “you can’t win if you don’t play.”

  9. A big “IF”, haha. But wow, I never thought about it this way – HOURS of entertainment. You’re absolutely right – that’s some darn cheap entertainment. And of course – hope, who couldn’t use more of it when times are tough? I know I could use some right about now.

  10. My husband has the bad habit of buying tickets, then not checking them. As long as he knows nobody won the jackpot, he just sets them aside. I took a stack, found one that won $150, so I mailed it to my daughter and son-in-law who are having a baby.

    Spending the money can be justified sometimes. Not following up – now THAT is stupid.

    • Hopefully you already have money saved to cover things that come up, have paid down debt and etc etc etc.

      Some people (probably not you) have a teeny bit of compulsive behavior. Hubby admits to it. He used to buy $5 worth of tickets for weeks at a time. When I gently poked him about it,he realized that it was a tiny addiction and he stopped himself.

  11. I agree that its fine to buy a lottery ticket every once in a while, provided you don’t get sucked in by it. Some people can get easily addicted to it, and end up spending far more than they ever originally wanted to or that they can afford.

    I know a guy that works with me who plays 3 different lotteries every single week. He totals something like $40 a week playing lotto, yet he complains bitterly that he has no money.

  12. Interesting angle on this. Well, when taken PURELY as entertainment…sure. Why not have a little fun. A couple dollars for entertainment isn’t the end of the world. Just don’t be thinking that you’re going to win!

  13. I will buy a ticket when the jackpot goes over some huge amount. I figure someone has to win, and I only buy one ticket, buying anything more than that is not really going to increase your odds in the grand scheme of things.

  14. I participate in an office pool for lottery tickets just in case they win. I do not want to be the only person in my office who still goes to work if they hit a big jackpot!

  15. I used to buy lottery tickets once in a great while, just for fun. Lately, though, I’d rather spend a few dollars at the craps table when I get a wild hair to gamble (usually once a year). I usually come out ahead by playing it really safe, and it’s hours of entertainment with a good friend. Plus, the casino also helps the community, just like the lottery.

  16. We buy a couple of tickets about twice a month. It’s our money, we aren’t hurting anyone. If we win even $12 (after spending $6 or less), then hey, that’s enough to for a spontaneous pizza night. We have won $500 before.

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