Have you ever dreamed of being rich? What would you buy if you had millions of dollars? And what if you could have millions of dollars by just spending a couple dollars? That's the lure of the lottery…
A lottery is a gambling game that's used to raise money. At its most basic level, a lottery involves paying a small amount of money — to purchase a lottery ticket, for example — for the chance to win a prize, such as a large sum of money.
Lotteries don't involve skill. Since lotteries are determined purely by chance, all you need to be is lucky...VERY lucky! Today, there are many different types of lotteries: from simple “50/50" drawings at local events (the winner gets 50% of the proceeds from tickets sold) to multi-state lotteries with jackpots of several million dollars.
So what are your odds of winning the jackpot? As it turns out, they're not so good. Although the exact odds depend upon many factors, let's look at a couple of examples.
In a lottery in which you pick 6 numbers from a possible pool of 49 numbers, your chances of winning the jackpot (correctly choosing all 6 numbers drawn) are 1 in 13,983,816. That's 1 shot in almost 14 million. If you were to buy one lottery ticket each week in such a scenario, you could expect to win once every 269,000 years.
Unfortunately, many lotteries have even worse odds than the scenario just described. For example, the popular Mega Millions multi-state lottery has odds of approximately 1 in 175,711,536. That's right — 1 in almost 176 million!
If the odds are so bad, why do so many people spend money on lottery tickets? That's a great question. For most, it appears to be the entertainment factor of taking a chance and indulging the fantasy of getting rich quickly.
So should you spend money on lottery tickets? There are, after all, people who win big money. In 2007, two people split a $390 million Mega Millions jackpot, the world's largest jackpot ever.
However, the odds against that happening to you are astronomical…literally. According to figures from the National Weather Service, you're over 20,000 times more likely to be struck by lightning at some point in your lifetime than you are to win the Mega Millions jackpot.
An alternative to spending money on lottery tickets is investing that money. For example, if you would normally spend $150 each year on lottery tickets, consider putting that money instead in an investment that yields an 8% return. Over the course of 40 years, that yearly investment could be worth more than $38,000. Some might consider that a lottery win in itself!