Stop wasting your money on Lottery tickets!

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Lotteries have been around for centuries and have always been a popular pastime. They are ingrained in our societies and promise fortune and wealth in exchange for small sums of money. Doesn’t that sound like a good deal? It does sound like a dream to be able to buy anything you want with just a few dollars every now and then. So, why should we give up our dream of having a few million dollars in our bank accounts?

Photo by Christine Roy on Unsplash

To begin with, most lottery winners go bankrupt within a few weeks because they have no idea how to manage such large sums of money. Assume you get lucky and win $10 million. What are your plans? Do you want a new car? Or perhaps a new home? Why not both? After all, you have ten million dollars. Buy a boat to go with the house and other luxury items, and the ten million dollars are gone. Why is this bad, you may ask, if you already have everything you desire? All of the items you purchased require maintenance to keep them running and in good condition; if you spent $10 million, you can’t afford the maintenance cost of a boat, let alone the cost of keeping it in a harbor… and so on. This is the point at which you realize you need to sell your boat because you simply cannot afford it. Unfortunately, boats depreciate in value after they are used, so you will not get all of your money back and will be left with less ( you can repeat this process with everything else as well). So, if you win the money, you must either invest it wisely or have a large income to support your new luxury lifestyle.

Second, most people do not consider this when playing the lottery. However, this is only true if you win, which, as we all know, is extremely unlikely. Instead of buying a lottery ticket and not receiving anything, why not treat yourself to a nice cup of coffee, or even better, use that money to actually make a difference in your life!

With the money you spent on tickets you could invest into something like ETFs lets take the S&P 500 for example its average growth rate is around 10.5% since 1957. Lets say you paid 20 Euro a month for 20 years. That’s around 240 a year, which would add up to 4800 in 20 years. If you invested that same amount of money into an index fund like SP 500, after the 20 Years you wouldn’t have lost 4800, you would now have 15.379 Euro and 10.579 would be the amount you gained by investing 4800 over the period of 20 years. In my opinion that sounds a lot better than loosing 4800 Euro.

I understand that buying lottery tickets gives us hope of being that one lucky person who wins a few million dollars, but for most of us, this will never happen, and we will waste a lot of money and the opportunities that come with it just to feel hopeful. This article is for those who want to take control of their lives rather than waiting for a lucky day that may never come.

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