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How to Win the Lottery

Posted By Jim On 08/24/2009 @ 7:22 am In Personal Finance | 71 Comments

The only time I’ve ever played the lottery is when the Powerball pot gets to be astronomical and my co-workers pool together some money to buy a few tickets together (this was several years ago). Outside of a few scratch off tickets for grins and giggles, I avoid lotteries unless they’re for local charities.

That being said, a lot of people still play, knowing full well they’ll probably never win. The pots don’t get to be that big unless they’re being fed by the daily tickets of so many players. Some of the savvier players turn to the internet for advice on how to win the lottery and today I will offer up the best advice anyone can give:

Don’t play the lottery.

I bet you saw that one coming right? Well, I’m going to back up that bit of advice with proof, beyond the obvious, of why the lottery is bad and what you should be doing instead.

The Odds Are Horrible

Everyone knows the odds of winning the lottery as astronomical. You are more likely to get struck by a lightening bolt while sitting in your car parked in the back of a jumbo-jet than you are to win the lottery. If you were to go to a casino, the worst games you could play give the house an edge of around 25% (Keno, Big Wheel). It’s not unheard of for a state lottery to have an edge of more than 50%… and you don’t get free drinks!

What if you don’t care about the odds? Well, the reality is that winning the lottery is actually awful for you.

Lottery Winners End Up Losing

Check out these poor souls who won the lottery [3]:

  • William “Bud” Post won $16.2M in the Pennsylvania lottery in 1988 and now lives on Social Security. His former girlfriend sued for a part of the prize, his brother hired a hit man to try to kill him, and he was duped into investing in several businesses that failed. Post was also jailed for shooting at a bill collector. Within a year of winning, he was a million dollars in debt.
  • Suzanne Mullins won $4.2M in the Virginia lottery in 1993, now she’s in debt to a company that lent her money on the winnings. She’s now insolvent.
  • Ken Proxmire won $1M in the Michigan lottery, immediately moved to California and into the car business with his brother and was bankrupt in five years.
  • Willie Hurt won $3.1M in 1989 and was broke two years later and charged with murder, having spent all the money on a divorce and crack cocaine.
  • Charles Riddle won $1M in 1975, he then got divorced, was sued, and indicted for selling cocaine.
  • Janite Lee won $18M in 1993 in the Missouri lottery, did a lot more good with her many than anyone else on this list, but was bankrupt eight years later.

Hopefully these stories have scared you away from the lottery… because even if you win, you lose.

Save Your Money Instead

Instead of spending your hard earned money on the lottery and your precious time figuring out how to “win,” devote your time to figuring out how to make the most of what you already have and how to earn more income.

Let’s say you spend $5 a day, or $1825 a year, on lottery tickets. If you were to put that in the stock market, earning a conservative 5% a year (let’s ignore this last year), you would have $60,345 after twenty years. $121,250 after thirty years. And a whopping $220,459 after forty years. Even if you were to stick it in an online savings account [4] at only 2% (and if it were to stay at 2%), you would still have $110,233 after forty years. That’s $110,233 without risk, guaranteed, you don’t have to do anything different except not buy lottery tickets.

So skip the lottery, go to the bank.

(Photo: sphistechate [5])

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[1] Tweet: http://twitter.com/share

[2] Email: mailto:?subject=http://www.bargaineering.com/articles/how-to-win-the-lottery.html

[3] poor souls who won the lottery: http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney/8lotteryWinnersWhoLostTheirMillions.aspx

[4] online savings account: http://www.bargaineering.com/articles/top-5-online-banks-savings-or-checking-accounts.html

[5] sphistechate: http://www.flickr.com/photos/sophistechate/3047006771/sizes/m/

Thank you for reading!