Lottery Tickets: Skip Out, or Go Big?

Gambling is a serious addiction. While I don’t personally suffer from a gambling addiction, starting to buy lottery tickets can be a slippery slope to big money problems.

Now, usually I skip out on the lottery. The chances to win big are garbage, and the government takes half of the money anyway. But when the jackpot is over $500m, you have to wonder…

Background

Okay, let me back up for a second. This is on my mind because there is a Mega Millions drawing tonight for over $800 million. That’s a lot of dough!

Now I hardly ever buy lottery tickets, but I thought it would be worth while to give my take on them.

The ‘King’ Lottery Tickets

Powerball and Mega Millions are the big lottery games that you see the billboards for. They’re the ones that everyone raves about when the jackpot goes crazy, which it’s starting to do now.

Powerball and Mega Millions are both offered across most of the U.S. It is because they are nationwide that their jackpots can grow so quickly and to such high numbers. Tickets are $2 each ($3 or more if you buy certain modifiers), and drawings for each are held twice per week.

Chances of Winning

While they say your overall chances of winning are 1 in 24, winning those big numbers you see on the billboards have chances as small as 1 in 300 million! That’s tiny. To put that in perspective, you are 300 times more likely to get struck by lightning than winning the jackpot.

Despite the odds, people still play all the time. Now some of this is due to addiction, but some of this is due to people dreaming.

The Lottery Daydream

Oh yeah, you know what I’m talking about. The instant cash to make you never have to work a day in your life again. It’s a dream come true for most of us.

This dream is so strong, that it causes us to play. Even the slightest chance of winning gives us hope at a seemingly brighter tomorrow.

My Take

So here’s the thing. I’m not going to tell you to buy or not to buy. Instead, I’ll tell you what I did.

I bought one $3 ticket.

I consider this ticket the cost of entertainment. For a whole day, I get to dream what I would do with the money. My wife and I fantasize about the vacations we would have, and how our future kids would be able to live a life without the worry of money. I dream about giving my parents money so they can retire, and helping my friends pay off their college debt.

Realistically, $800m is more money than I would ever need in 10 lifetimes. And yes, it’s a “bad investment”, but I think dreaming every once and a while is healthy and exciting.

Final Thoughts

My rule of thumb is to not pay more than you would be willing to rip up and throw away. At the end of the day, the odds are the odds, and wanting the money more than the person next to you doesn’t give you better chances of winning.

I personally limit myself to one lottery ticket, and I only consider buying if the jackpot is over $400m. Don’t ask me how this became my buy-in number, I honestly don’t know. I think it was probably something like “well, if I get half, then $200m is plenty for me, my kids and my grandkids. Plus that amount doesn’t happen enough that I constantly have to think about buying”.

If you love to dream, sometimes it’s okay to ‘go big’. If you only consider logic, then definitely ‘skip out’.

If you are a responsible spender and want to start your financial journey, I recommend starting here.

Happy Spending!

-The Spendgineer