Who hasn't dreamed of winning the lottery? I don't even play it, and I dream of it from time to time. My coworkers at doc review pool together every week to buy some tickets. The guy who runs it jokingly calls it the company retirement plan. Anyone who wants to play drops in $2, and then someone goes and buys however many tickets that will buy. In all the time I've been working there, they've never gotten more than $5 back in winnings. Since $5 is kind of hard to divide between 17 people, they just rolled it back in and bought some extra tickets the next week.
I'm devoutly Christian, but I don't think there's anything morally wrong with gambling. The reason I don't do it is because I think it's foolish. I call the lottery the tax on people who don't understand math.
Instead, today I'm going to show you the better way to "win the lottery". Meet our friend compound interest.
Let's say you decide you want to play the lottery every week. That's $2 per week, or $104 per year. We can round down to $100 to account for the occasional $5 win.
If you started at age 18 and stopped at age 68, that's 50 years of lottery tickets, or $5000. Not a bad jackpot, but we can do better.
If you put that $2 in a savings account every week at 1% interest, you'll end up with $6751.
The average stock market rate of return is 7%, so if you invest your $2 instead of just stashing it in the bank, you'll end up with $47,800. That's a pretty nice deal.
How many lottery ticket purchasers really only buy just one ticket, though? What would happen if you bought 5 tickets a week? If you took the $10 and invested it in the stock market, you would end up with $239,004 at the end of your 50 years. Congratulations. You just won the lottery.
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