Here’s a question? What has a 70% bankruptcy rate with 44% of people spending all the money within 5 years….that’s right “winning the lottery!” National Endowment for Financial Education
Now in the true confessions department, I admit to playing the Powerball or Mega Millions sometimes when it gets above $200 million. Candidly, I have found myself daydreaming of what I would do with the money if I won. I further justified my lottery purchasing by feeling good that my $4 investment in (2) $2 tickets, ultimately benefits education or charitable causes! Hey, at least it sounds good!!
It’s easy to see why people play because the largest Powerball ever won was $1.6 Billion, which was split 3-ways at $528.8. The largest Megamillions was $656 million for a lump sum pay-out of $474 million. You could do a lot of great things with all that money.
However, I quickly come back down to earth realizing that the odds of winning a jackpot lottery are 1 in 195,249,054, or to quote line from the movie Dumb and Dummier, “what you are saying is that I have a chance?” So with the population over 300 million, you basically have 2/3’s of the entire population competing against you. Lightening hitting me is greater!
Then, it’s starts to get very scary when you realize that 21% of people feel that the only way they can afford to retire is winning the lottery. Or that recent data has suggested that many more people are turning to the Lottery for their financial solutions Consider this:
The average Lottery regular spends $206 annually, which at:
This is especially enlightening when you consider that roughly half of Americans have nothing saved for retirement, or a Forbes report claiming that roughly 2/3’s of people couldn’t put their hands of $500 for an emergency! So, rather than dropping money on Lottery tickets consistently, consider these sure-fire ways to financially get ahead:
- Pay Down credit card debt, you get guaranteed savings on interest charges
- Put money in a 401(k) retirement plan, especially if your employer matches
- Add money to your mortgage payments against principal to save mortgage interest
- Invest in a mutual fund or stock dividend reinvestment plan
- Put the money aside for a rainy day or emergency
- Donate it to charity and feel good!
Buying lottery tickets once awhile isn’t the end of the world unless you really need the money. It’s a game and it’s about playing for fun, not out of financial necessity. It’s doesn’t solve financial problems because according to the National Endowment for Financial Education, 70% of Lottery winners are right back to where they were 5 years later..that’s not financial security!