Neither I nor my lovely bride, the Evil Princess, normally play the lottery. We understand odds. It’s a loser’s game.

But every now and then, it’s fun to go against the odds.

One day in a convenience store, on a whim, we decided to buy a lottery ticket. Hey, it’s two dollars worth of hope, right?

When the lottery was over, we found we had won…another ticket.

So, what the heck. We got the other ticket.

When that lottery was drawn we discovered we had won ten dollars.

Well, gee…it’s been a while since we’ve been to Las Vegas, but I’m not sure they even have blackjack tables there anymore that take bets as low as ten dollars.  The whimsy continued: we traded our winning ticket for five more two-dollar tickets.

And won fifteen bucks on one of them.

What to do? Why, what does any gambler do with a winning streak? Ride it, right?

So we traded that in on seven more two dollar tickets, and a dollar bill in change. (I gave the Princess the dollar. Because she’s cute. And because I love her.)

And, whaddaya know, with that fourteen dollars worth of investment one of the tickets turned out to be worth twenty bucks.

We discussed just how long that rate of winning would take to snowball to a million dollars. We never came up with a figure, partly because neither of us are math majors and mainly because we were both laughing too hard.

So, we “invested” our $20 winnings into ten more tickets.

Which came up … bupkus. Nada. Nuthin’. Zero.

Thus ended our foray into the lottery as an investment plan.

When it was over I said, “Look on the bright side. Between us, we came out a dollar ahead.”

When she tried to slap me she missed, so I guess I came out ahead…sort of… or at least even, maybe?

But, anyway, now you know why that lottery ticket in the picture looks as if someone crumpled it up…

34 COMMENTS

  1. Far too many times I’ve seen people dropping 30 to 40 bucks on lottery tickets when they should have been buying healthy food for their kids. I remember the pro-lottery politicians extolling the virtues of the lottery and all the money it would provide to our school systems. Well, that sure worked out great. Look at how smart and well prepared for adult life our young people are now. At least they can name 47 different genders…

    • I have a friend whose family business was a distributer of junk food (nasty little donuts, pork rinds etc) to gas stations. When the lottery started, there was almost an exact correlation between the lottery sales and the decline in his business. Based on this, I would say that ticket buyers were better off than before. The state not only got the revenue but a decline in Medicaid expenditures from what they would have been.

  2. The original ticket cost you $2. When you won you bought new tickets with the money except the one time you kept the odd $1.

    So as I understand it, you had several days of entertainment for $1. Not a bad deal in today’s world. (Or as I would see it, it cost you 2- 45’s, or 5-9mm’s or 20-22’s.)

  3. “Between us, we came out a dollar ahead.”

    No. You forgot to subtract the original $2 you spent on the first ticket. You are at minus $1. That’s how it works.

  4. I’ve contributed to my “retirement fund” a few times over the years. Particularly when the amount had soared in to the BAZILLIONS. But, sadly, my investments haven’t panned out. C’est la vie.

  6. If all of the lotto playing residents of the Section 8 housing next to my local beer store pooled their money together to buy stock options and futures options instead, they’d all end up winners in the long run. The odds of a positive return on one of those speculative investments is infinitely greater than lotto odds.

    • One of our local folks said it best: The odds of winning the lottery are the same, whether you play or not. Even most of the people who hit it big lose it all within a couple of years.

  10. ‘What to do? Why, what does any gambler do with a winning streak? Ride it, right?’

    And if you’d lost? Well you have to make it back now; so bet again!

    Professional gamblers walk into a casino with a limit. Say it’s a thousand dollars. If they lose it on the first bet they walk out. If they win it on the first bet; they walk out.

    Personally I’ve always stuck with the old irish maxim:
    ‘Never bet a penny you can’t afford to lose’ – So I’ve never bought a lottery ticket or placed a bet.
    Though as Dan B pointed out; so you had nothing back but enoyment? That’s all you’d have got it you’d spent it on a coffee or beer.

  11. Always in the end.
    The bank, dealer, system, etc gets it all back. Everytime!
    At least you both had a bit of fun for a few days

  12. I, too, have occasionally purchased a lotto ticket for, as they say, entertainment purposes only (& the remote chance of a big win).
    Generally, I subscribe to the definition of the state lottery as “a tax on people who do not understand statistics.”

    • “a tax on people who do not understand statistics.”

      As Fonzie would say, “Exactamundo”!

      Here are the odd of being struck by lightning (according to the National Weather Service):

      https://www.weather.gov/safety/lightning-odds

      And here are the odd of winning at the Powerball lottery (according to their own web site):

      https://www.powerball.com/powerball-prize-chart

      By my calculation, one’s odds of being struck by lightning (in any given year) is 239 times that of winning the Grand Prize at Powerball. If we “lower our sights” and look at the odds of the lesser ($1 million) prize, the odds of being struck by lightning (in any given year) is still 9.56 times that of winning the cash.

      Truly, all one buys is entertainment (and wishful thinking) when one buys a lottery ticket.

      Nevertheless, hope springs eternal in the Human Heart. Even knowing these odds, I will (occasionally) buy a Powerball ticket. In my heart, however, I know it is just for fun. If I was to actually win a big prize, it would be more “shocking” to me than being struck by lightning! (Please forgive the Pun!) 🙂

    • A colleague, also an economist, has a bumper sticker on the side of his desk that says “The lottery: a tax on innumeracy.”
      As the clerk in a Cambridge MA grocery store asked the young man with 12 items in the 10 item Express line: “Are you from Harvard, and can’t count, or from MIT and can’t read?”

  13. You are a good instructor, Mas, even when you only use subtleties… I was anticipating an illustration of what a bad investment looks like in the context of self defense. I don’t know if it was your intent, but I was forced to ask myself, where have I been investing poorly? And unfortunately, there is an answer: I have allowed my regularly-scheduled live-fire practice to be interrupted by circumstances and inconveniences. I shall endeavor to remedy that serious error. Thank you for reminding me to stop and think about the value of various investments.

  14. My Dad grew up in Nevada, and the whole gambling thing was a non-issue for them all (one of ten kids, rural farm, small town nearby) Money was far too dear to toss away. Spend it on parts to put the old T Model Ford back together and save from buying another car. Growing up I got to know all the cousins (some sixty or so) One Aunt was a blackjack dealer aHarrahs. SHe taught us the game and how to beat it. Any family gathering we’d be playing poker (yup, six year old kids) but never for money. EXtreme valuables like jelly beans. Maybe rolls of caps for our cowboy six shooters.
    When we threw a party for Grandma to celebrate her HUNDREDTH birthday we rented a huge hall ta Harrahs in downtown Reno (I think the original one) We had them cook up and serve a feast for all of us…. someone counted well above two hundred relaives showed up, and a handful of “just friends”. For accomdations Dad and his Wife were going to get a hotel room in one of the big casinos. It waas gonna cost each of us about a hundred dollars per night, meals extra. On a lark I went to a local travel agent in my small town and asked about a gambler’s package. SCORE!!! I got a room for two and a hideabed for three nights for less than two hundred above what my airfare alone was going to cost before the package. My airfare was also reduced. They drove up, the hotel had messed up and our room was not available. FRiendly staff fixed it.. a room for four, hideabed not needed, same price. Of course an allotment of chips, chits, script, etc, comes with the package, along with one complimentary meal, and access to any of the restaurants serving great food for about the price of eating ad McDOnalds but far better. We sat together in the casino wie Dad whittled away at the various tokens, chits, etc, walked off our table. Good visiting. I didn’t care to use any of them so it was free entertainment. I had many times my money’s worth just being with Dad and his Wife visiting and talking over old times. For free……
    SO our whole visit was essentially deeply discounted and largely funded by the gambling industry. Break muh li’l ol pea pickin hawrt. I like gambling when it works like that.

    • NV is one of the two? states that doesn’t have a lottery. The casino industry has successfully kept it at bay for decades. For a long time this puzzled me since buying a lottery ticket doesn’t seem competitive with the casino experience, even though they both involve gambling (and the casinos pay better). I discovered that the industry supplies all those banks of slot machines that you find in every supermarket and gas station and that is competitive with lottery tickets.

  15. I can’t at this moment recall the current culturally approved term for low income areas. But, I recall seeing folks playing the numbers before-and after-states got into the lottery business. The state wanted to deal in dollars, the numbers runners would take bets far below that.
    Like someone above, I later saw folks in those areas plunking down serious-for those areas-money for the state game. Short lesson on just how cynical politicians can be.

    Up until maybe 20 years ago, the only lottery I’d ever won involved military service.

  16. Thank you for supporting my children’s college education, and all of the recipients of a Florida Bright Futures scholarship.

  17. Somewhere in the Book of Proverbs Solomon appears to advise categorically against gambling. Good thing for souls maybe that the Ten Commandments do not apparently prohibit it. I don’t dwell on what I could have bought instead of “a few” lottery tickets. I will admit it is much smarter to put the same money into savings, and apply the product wisely in due time. I do wonder what will happen if a terrorist wins a big prize. A strong argument against.

  18. Strategic Steve,

    Share that verse in Proverbs, if you can. I have never found any verses against gambling. It does seem to be an unwise use of money. I avoid it because, like Mas, I know I won’t win.

  19. I play every so often, never more than $10, and we get free tickets more than anything else, but we can dream….

  20. AM wrote ‘I was anticipating an illustration of what a bad investment looks like in the context of self defense. ‘

    The nearest comparison of guns and gambling I can think of is Wild Bill Hickoks:
    ‘Skill only gets you so far as a gunslinger. You can be fast, accurate, confident. Some ner do well can still take you out. Those who ply the trade know; in the end, the house will
    win”.

    https://youtu.be/3Ea8hitoO3A?si=I_sFHW7Jz4as3ERZ

  21. USAF sent me to Las Vegas back in 1983 for a Red Flag exercise.

    I lost a $2.00 roll of nickels in the slot machines. The trauma was so horrible, I have not gambled since then.

  24. If you find it entertaining and can afford it, fine. Help yourself. But it’s no fun for me–I get mad when people try to take money away from me.

    The trouble is, the people who play the most and lose the most are the people who can least afford it. So it winds up being a tax on people who are bad at math

  25. I once worked at a company that builds and supports the lottery terminals that you see in convenience stores. One of the engineers there proved to me that your odds of winning don’t improve if you actually buy a ticket! He had an old 8 digit desktop calculator and demonstrated that if you don’t buy a ticket, your odds are zero. If you DO buy a ticket (he did the math on the calculator), the odds still showed up as zero (because the old calculator wouldn’t show anything smaller than 0.0000001)

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