Mellody Hobson talks about the lottery and why it’s best to avoid this game.
Last week we talked about how fear of losing money keeps people from making good long-term investments in the stock market, but this week I want to talk about the other side of the coin: Instead of being overly fearful about losing money, millions of people are unreasonably hopeful that an unexpected windfall is going to make them rich. What I’m talking about is the lottery.
People love the lottery!
They sure do. Worldwide lottery sales were almost $262 billion in 2011. And listen, I get it. The lottery sells hope. A dollar seems like a small price to pay to dream big. But that’s what makes playing the lottery so insidious. It’s like smoking. There’s damage happening, but you can’t see it in the day to day. Just like one cigarette doesn’t give you lung cancer, one scratch off ticket doesn’t make you go broke. But if you add up ticket after ticket after ticket, you’re looking at real money going the drain. And for what? So people can fantasize about lying on a beach somewhere?
What I encourage people to do is to skip the lotto and instead try saving just $1 a day for 4 months. Then up the ante and go for $2 dollars a day for another 4 months. Then really push and shoot for $5 a day for another 4 months. That’s almost $1,000 in savings in a year! My experience is that saving is addictive. I know it’s not as sexy as the idea of becoming an overnight millionaire, but it’s REAL.
So who’s buying all the lotto tickets?
Well that’s the saddest part. It’s frequently the lowest income Americans who are buying the most tickets. In fact, a PBS report earlier this year showed that households that earn at most $13,000 a year spend 9 percent of their money on lottery tickets. Tom, that’s huge. That $25 a week could make a big impact over the long term if it were saved rather than donated to the government, because that’s in essence what you’re doing when you play the lottery. It ends up being a tax on the people who can least afford it.
Where exactly does the money go?
It’s different for every state, but for the most part, it first goes into prizes and administrative costs, then the profits go the state’s general fund and to education. It’s a great cause to donate to, Tom, but scratch off tickets aren’t deductable!
Someone will win. It most likely will not be you. Or me. Or anyone we know. To be fair, I have to disclose that you’re not completely throwing your money away when you play the lottery. You’re throwing half of it away. The average return is just over 50 cents for every dollar. But forget about winning the Powerball. At 175 million to one, the odds are if you played every hour, around the clock, you would win once in 20,000 years. And if you live that long, you’re bound to get hit by lightning a few times.
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This Week’s Celebrity Instagrams (11/26-12/2)
30 photos Launch gallery
1. Little Legend and Puddy 😍😍😍😍
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2. "You on point Phife?" "all the time,Tip". 💥 #bannedfromnormal
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3. Vegan! The Impossible burger at Crossroads
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4. Lawrence #BeforeandAfterEpisodes 1-4: 184lbs 13% body fatEpisode 8: 196lbs 8% body fat S/O @coachdaveboxing with the works outs and @kildareriordan with the nutrition
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5. Jus haaaanngin out
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6. Meanwhile back at home in Atlanta GA someone mad they not on the 🛳. 😳
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7. No limits... Photo cred: Chris Bridges @ludacris
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8. new new
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9. Apparently my 260lbs is too much for the actual vines in the Hawaiian jungles to hold me without breaking and me falling hundreds of feet. So for safety purposes, I'm forced to swing thru #Jumanjj on wires strong enough to hold 12 adult buffaloes and 1 adult Rock. #OnSet #Jumanji #IronicallyIEatBuffaloDailyForLunch #MoreManThanNatureKnowsWhatToDoWith
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10. hey ma! 🎎#wcw 💙
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11. Surprise visit to our factories!!! #GoodAmerican #USA
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13. Peachy Keen 🔥✨⚡️
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14. If this don't look thankful I don't know what does. Happy Thanksgiving to you and yours. #UltraBlessed #24kMagic #SweetPotatoFly
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15. Late nights @nbcmarlon with the writers... we in here!!!
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16. There goes my baaaaaaaaabbbbyyyyy #QueenKingMagic!!! We're up to something! Ira BIG!!! Stay out our buisness -
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17. You want to win every game you play but when you come home to these faces... who cares. #ILoveYouGirls best part of my day, everyday!
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18. Steady,steady..... full size jenga.. "I got this one "???? Or do I ?
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19. Cornrows kind of day 😉@dontaysavoy2 you convinced me and I love. ❤️️
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20. #BrotherlyLove #tbt
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22. #basel #TeamLOVE @kingcombs
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23. Just introduced a special screening of @directher 's groundbreaking (must see) documentary @13thfilm with my brother @themichaelealy | @unitedblackout #blackoutblackfriday
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24. Me & Vanessa Williams giving #DuckLips #Pose on the set of #DaytimeDivas @vh1 - Coming Soon to a tv near you. Lol. - My make up done by @makeupsurgeon
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25. This picture just makes me wanna praise the Lord, you hear me!!!!!! Yes Lord brotha #TEDDYCAMPBELL What a #man !!! You are everything right on this picture husband ......... #gorgeous #stylish #classy #strong #masculine #king #sexy #debonair #gentlemenstyle And that #bible in your hand just seals the deal for me (probably cause i know that, that is what helped you become just as amazing as you look😘). While my heart and mind experiences the goodness of God at #church on Sundays, my eyes experiences the goodness of Teddy😍. Amen somebody🙌🏽. "Bless the Lord oh my soul and all that is within me bless his holy name" #myman #myhusband #goodman #blackman #dapperman #godlyman #goodfather #mybestfriend
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26. Yesterday was my mama's 53rd birthday!!!!! Got to celebrate with her all day. If this is what I have to look forward to I can't wait. Looking like a soft bucket a cocoa butter. Yaaaaaaaaaas! 😍😍😍 love you mommy!
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27. "Shout out to @PureAtlanta for getting the family right"....I'm loving this jogger. 😍😍
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28. This pic warms my heart ❤️ #myLogiebeans and aunt aunt umba @itowandabraxton 😘
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29. You will always be my baby😜. #HappyBirthdayReginae #mybaby18
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30. GC "Gods Child" Red on Red SweatSuit available now at www.MonicaApparel.com ... Take Your Crown wherever you go!! I'm pictured in a Medium... Go to the site now for other options ... cc: @trukernell
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