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?