If you really want to strike it rich, don’t play the lottery.
Foster City, CA (PRWEB) March 31, 2011
The announcement of the seven Mega Millions winners today may entice many into playing the lottery with the hopes of striking it rich. However, GetRichSlowly.org’s new lottery simulator educates its readers that playing the lottery with the expectation of a positive payoff is foolish – and that nearly any common investment would do far better.
The GetRichSlowly.org lottery simulator gives people a risk-free chance to try their luck at hitting a jackpot while experiencing firsthand how the roughly 1 in 175,000,000 odds are stacked against them. The simulator calculates a player’s return on investment, disproving the concept that the lottery is a wealth-building strategy – a belief held by a surprising 30 percent of people without a high school degree (Wired magazine survey).
Even at a time when interest rates are at historic lows, J.D. Roth, founder and editor of GetRichSlowly.org, argues traditional investments are a far better bet than the lottery when it comes to building wealth or getting out of debt. He explains why individuals who spend time and money trying to win the lottery are better off spending that time looking for a way to slowly grow their bottom line in a high interest savings account.
Roth’s own turn on the simulator, equivalent to playing the lottery twice a week for 1,000 years, breaks down to:
- $104,000 spent on playing
- $11,554 in winnings
- A total return of -88.89 percent
If a consumer invested a $100,000 lump sum in one of five common investments for a period of 30 years, a realistic inflation-adjusted return would be:
-Gold, real estate or savings account: $135,000
These expected returns are illustrative only and are not meant to serve as direct comparisons to expected lottery returns through years of repeated play.
Though Roth notes that playing the lottery for entertainment can be just fine, he makes the case that counting on the Mega Millions as a moneymaking strategy is a fool’s errand. “If you really want to strike it rich, don’t play the lottery. Do something boring with your money,” writes Roth. “Take advantage of the extraordinary power of compound interest to get rich slowly. If you don’t have a Roth IRA, start one. Use it to buy indexed mutual funds. If that sounds too complicated for you, then open a savings account.”
“An online savings account that yields a mere 1 percent is a better bet than a sure losing streak with the lottery,” he writes.
Visitors to GetRichSlowly.org can read Roth’s full commentary, get the lottery simulator to share on their own websites and also compete for $1,500 in prizes in the GetRichSlowly.org video contest which runs through April 15, 2011.
GetRichSlowly.org is a personal finance blog providing readers with a forum for sharing and discussing practical everyday financial strategies. Founded in 2006, the site is based on the premise that few people get rich quickly, but almost anyone can get rich slowly by patiently following some simple rules. GetRichSlowly.org, was ranked among "The Top 100 Personal Finance Websites" by MSN’s Liz Weston and has been named "The Most Inspiring Money Blog" by CNN's Money Magazine. The website has been featured in The Wall Street Journal, Fox News, CNBC, Real Simple, and The New York Times.