Winning the Lottery Without Playing Lotto

I had my first book signing event yesterday for Beyond Paycheck to Paycheck. It was a blast to personalize everyone’s book. Many were bought as gifts. My favorite inscription request was the person who asked me to address the note to his wife followed by “Start with chapters two and three.” (Don’t Be Cheap, Be Fiscally Responsible and Debt Sucks (Your Money Away) respectively.)

You: Sounds like he was trying to send a message.

Gee, you think so? Of course! Yet on some level, I’m happy if the book facilitates those tough but necessary conversations spouses need to have about their respective money habits.

One of the most interesting parts of any in-person presentation is the Q & A session because that’s when you hear what’s most on your audience’s mind. This changes each time based on the newest investment fad or the current financial event story of the day.

My favorite question yesterday, however, was from a CPA who asked “How do you get through?” She clarified her question by providing an example of someone she knew who was spending hundreds of dollars on lottery tickets each month, to the point that they needed to occasionally skip meals. Again, she said “How do you get through to someone like that?”

I told her what I’ll tell you: Much of money is based on psychology. I’m no pyschologist and, no, I don’t play one on TV. (My wife is, but that’s a subject for a different time.) It’s certainly difficult to get people to change behavior, especially when that behavior has been going on for a long time.

You: It’s tough teach an old dog new tricks.

Indeed. But the first step in any treatment plan is education. Too many people make poor decisions based on ignorance, not stupidity. Personal finance is a great example of a topic many of us are ignorant about, because it isn’t taught in our schools. No education means ignorance. Ignorance means poor decisions. Poor decisions lead to problems.

You’ve Already Won

An individual spending several hundred dollars a month on lottery games actually has a winning lotto ticket. He’s just throwing it out by playing lotto.

You: That doesn’t make any sense.

Stay with me cowboy. Just by saving those few hundred dollars each month, our friend could have had a huge prize. If he’s 30 years old today and simply takes the $300 a month he’s spending in gambling and instead invests it in the stock market and achieves an 8% return, he’ll have well over $400,000 by the time he’s 65. That’s quite a scratch off win! And his odds are way better.

You: How did you do that math?

Easy, just use a Future Savings Calculator to see what you can “win.”