An article was published in the UK this week, which led to our engineers arguing if they should continue or cancel the office lottery pool. The question: Should you invest $2 a day or use it to buy lottery tickets? Suppose you invest $2 every day at the reasonable rate of 10%. It will take you almost exactly 50 years to accumulate $1M. To earn this same $1M in a National Lottery, you would (on average) have to match five numbers and a bonus ball, at odds of 2,330,635-to-1. If you spent $2 a day for 50 years you would total just over 36,500 tickets and would thus have only a 1-in-63 chance of making that $1M+. By investing $2 a day, you take advantage of compound interest. If you were to spend the $1M at the end of 50 years on the lottery, you'd have an almost 1 in 2 chance of winning the lottery. Plus, you'd get all the lower end payouts. By spending $2 a day on the lottery, you decrease your odds to 332,974-1 of winning every week. Odds are 63-1 only if you buy all 36500 tickets for the same lottery.
If you're not making slightly more than the average mutual fund, maybe on your next visit to the WI, you should also visit my broker? Funny story, he almost dropped Baby Waste also... ...off a desk...
