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.
Also On Black America Web:
This Week’s Celebrity Instagrams (10/15-10/21)
31 photos Launch gallery
1. Just a NY girl with BIG dreams....
1 of 31
2. HAPPY CHILDREN=QUALITY PARENTING. We don't always see eye to eye on everything and that's normal. We're human beings. But we come together and do it right for what's important, the kids. We are not enemies, we are parents. And we are parents 1st. S/O to @monyettashaw for making Mason's bday memorable. S/O to @itscrystalsmith at home taking care of our other lil' Prince. ❤️❤️❤️ THIS IS WHAT CO-PARENTING LOOKS LIKE. #Blessed #Happy #AboveTheDrama #BiggerThanUs
2 of 31
3. So happy to finally be able to share with you all that I’m the new Global Brand Ambassador for @Revlon! Follow my day on RevlonSnaps. Yay! Choose Love, Everybody! #RevlonXCiara #chooselove #ad
3 of 31
4. Glam on point!!!@makeupbymotoko & @shaylinjoneshair #easybreezy @lifetimetv #beachesmovie #january2017 😘
4 of 31
5. ✨True love ✨📸: @jessiemarrerophotography
5 of 31
6 of 31
7. Today was not easy..but by the grace of God we all got through it. Words cannot express our gratitude for all of your Prayers, Positive thoughts and Support for us throughout the years. Tommy will be missed but most certainly never forgotten...And PLEASE don't ask "Where's Martin?.." he was there too...just not in this picture. Lol! God bless you all.. #LoveConquersAll #MartinShow
7 of 31
8 of 31
9. West coast get ready for #RockyHorror. I will be live tweeting again. #letsdothetimewarpagain
9 of 31
10. #THEKEYS pre order yours now ... Available everywhere #NOV22 #WeTheBest 🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑
10 of 31
11. We about to ROCK at #KCABlackBall!! All for our life-changing effort to end 🌎 AIDS.
11 of 31
12. Today's #SNAPJACK is brought to you by @yazzthegreatest 😂😂😂💋💋💋
12 of 31
13. Damn girl you kinda old to be headed to the Go Go. You coming in at the age they leaving. LMAO
13 of 31
14. Daddy daycare B-Boxin with @acewellstucker @shopraisingace
14 of 31
15. #FBF Naviyd & URV "LIL MONSTERS"
15 of 31
16. HAPPY BIRTHDAY TO ONE OF THE BIGGEST LEGENDS IN OUR HIPHOP HISTORY! @snoopdogg CONTINUED BLESSING AND LOVE FAMILY!!!!! REAL OG!
16 of 31
17. Thank you for a beautiful night VSU! Let's do it again! #HOMECOMING
17 of 31
18. Had a great time this morning with my familia Erica, Griff & Truth!!
18 of 31
19. Check out my interview on @essence facebook live. #inmyownwords #nycpromo #day2
19 of 31
20. #She💋 #tbt #TheCoveAtTheAtlantis #DawgPawsAndAll
20 of 31
21. Bae #retailtherapy
21 of 31
22. Why me and @coryhardrict got the same pose... and notee... new mouth #naked
22 of 31
23. When my husband is my personal 'hype-man'! it kills me every time! 💜😂 #WHATNOW #lostfiles📷
23 of 31
24. Diggy Simmons
24 of 31
25. Hand full of @jacquieaiche 💙💎💍 @esnail_la 💅🏾
25 of 31
26. SuperSoulers! You can watch my interview with Carl Lentz live from my Facebook page, tomorrow at 11a ET| 8a PT. #SuperSoulSunday
26 of 31
27. 💋 .. When the friendship is easy like Sunday morning. ☀️
27 of 31
28. Sunday mornings are the best........... hugs and cuddles with my angel
28 of 31
29. #huggar16 #hellohuggars
29 of 31
30. My gym is everywhere!.. #RnBMoney #TheGeneral 📸: @twelvepastseven
30 of 31
31. Nothing I would rather be doing... Rocko setting up our movie, Romelō working on a puzzle & Laiyah singing and sharing all she's learning at school... I'm so grateful for the joy they've brought into my life ... Praying for peace , joy & love in the home of EVERY family ♥️ #HeadScarfPJSunday LOL 😂
31 of 31