Feeling Lucky Enough to Play the Lottery?

22 Nov 2017 · 2 min

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2:02

In this short financial commentary, Alan Akina examines why many U.S. adults purchase lottery tickets, citing Investopedia statistics that 57% of adults spend over $50 billion annually on lotteries. He references a Psychology Today article that attributes lottery buying to a desire for social inclusion and a belief in magical, life‑changing luck. Akina then highlights the extremely low odds of winning, comparing a Tennessee lottery’s 1‑in‑290 chance to everyday risks such as lightning strikes (1‑in‑2.3 million), venomous encounters (1‑in‑3.4 million), and falling airplane parts (1‑in‑10 million). He explains that buying additional tickets only marginally improves odds (e.g., from 1‑in‑200 million to 2‑in‑200 million). Concluding, he advises viewers to forgo lottery spending and instead invest the money in a retirement account (IRA) for long‑term financial benefit.

Chapters

Good morning, everyone. Are you feeling lucky? Well, you're not alone. According to Investopedia, 57% of all U.S. adults have bought lottery tickets and will spend upwards of $50 billion each year in hopes of striking it rich. So, why do we buy lotto tickets? In a Psychology Today article entitled Lotteryitis, the author says there are 2 main reasons why we do it. First, we want to be part of the in-crowd and not left out. And second, the lottery lets us still believe in magic. That we will get a lot for just a little bit. It's the dream of having so much money that we'll never have to work another day in our lives. So, the question is, should I play the lottery? Well, before you get your hopes up too high, let's look at the odds. As an example, a recent lottery in Tennessee has the odds of winning at 1 in 290 Now, according to Investopedia, each person has a 1 in 2.3 million chance of being killed by lightning, a 1 in 3.4 million chance of dying after coming in contact with a venomous animal or plant, and a 1 in 10 million chance of being struck by fallen airplane parts. But you're probably thinking, well, somebody has to win it, right? And as the old saying goes, you have to be in it to win it. So, how do you increase your chances of winning? Well, most would think if we buy more tickets, our chances go up a lot. Well, look at it this way. If the odds are 1 in 200 million, if you buy another ticket, the odds go up to 2 in 200 million. So, what do I recommend? Now, I say keep your money and put it to work in your retirement account. Yeah, I know it's boring, but your IRA will thank me later. For Take Two, I'm Alan Akina. Here's to your money.