I better, safer alternative to lottery tickets
/I watched a man purchase $50 in lottery tickets yesterday.
I see this all the time, and it makes me crazy. I've never played the lottery in my life. Never purchased a Powerball ticket or a scratch ticket. Never felt any compulsion to do so.
This is because I understand the odds involved with playing the lottery.
I also know that a disproportionate number of people who play the lottery are poor, minorities, and often addicts. The lottery preys on the most vulnerable members of society.
I hate it.
But I also understand the importance of hope. I know how impossibly hard life can be when all hope is lost and any dreams that you once had are gone forever. Living in my car in 1992, awaiting trial for a crime I did not commit, unable to get work because I had no address or phone, cold and hungry and tired almost every day, I thought I would never have a home again. Never have a real job again. Never make any of my dreams come true.
I was 22 years-old and thought my chances of happiness were gone forever. It was crushing. The loss of hope is a terrible thing. Maybe the worst thing.
So I understand the desire for a little hope, as astronomically improbable as the lottery might provide.
Still, it's such a waste of money.
As I watched that man purchase $50 in lottery tickets yesterday, I wanted to take him aside and say this:
"Listen, I don't know why you're spending $50 on lottery tickets, but I have a better idea. Download Robinhood on your phone. It's an app that allows you to purchase stocks commission-free. Then take the $50 you're spending here and purchase a stock instead. Something big and relatively safe. Mastercard or Visa. Microsoft. Home Depot. Apple. Or an index fund. Your money will be relatively safe, but you'll still have the excitement of possibility. Will the stock go up or down? When will I receive a dividend? And you can experience that excitement on a daily basis. That $50 will continue to provide hope and excitement day after day. Hour after hour if you'd like. Even minute by minute. But your initial investment will be relatively safe compared to that lottery ticket, and at the end of the year, you'll have still have something to show for your $50."
I wanted to say this so badly.
I know that the hope of a 12% annualized return on $50 isn't the same as a $32.8 million dollar payday, but if it's hope or excitement that these people are craving, maybe investing the $50 they are spending weekly on lottery tickets in the American stock market could offer enough hope and excitement to satisfy them and a $2,600 nest egg at the end of the year.
Or $2,912 with a 12% annualized return.
Mind you, I don't advise people to invest without understanding what they are doing. I studied the market for 5 years before investing a dime, but if the choice is between $50 in lottery tickets or $50 in the stock of a relatively well known company, blindly investing in the company is the better choice every time.
I suspect that the man purchasing lottery tickets yesterday wouldn't have appreciated my suggestion, and that kills me, too. A simple shift in spending could yield an enormous change in the quality of a person's life over time, and yet for so many, change is so hard.