Getting Rich Quickly: Gambling And Lottery
Getting Rich Quickly: Gambling and Lottery
by T. Claire Kest, CFP®, CAP®
Saving and investing for thirty to forty years to enjoy a comfortable retirement is boring. While a slow and systematic savings strategy is proven to be an effective way to help everyday Americans gain wealth, some individuals feel tempted to seek quick riches instead. The motivation to pursue overnight wealth may stem from pure curiosity, feelings of desperation due to lack, discontentment with a current situation, fear of being trapped in a bad situation, boredom or greed. While these emotions can be powerful motivators, but they can also lead to debt and vulnerability to addiction. Gambling and playing the lottery are common ways people attempt to get rich quickly.
Gambling: The House Always Wins
For those who enjoy the entertainment value of gambling and are not betting your life-savings at the casino, by all means, have fun. But if you or someone you know has a gambling problem, help is available. Call 1-800-GAMBLER or 1-800-848-1880.
In 1989, Cathy Lawhon published "Breaking a Losing Streak" in The Orange County Register. That article outlined the natural progression of how a gambler becomes compulsive to the point it evolves into a gambling disorder. The progression typically begins with a winning streak (and winning big), then you lose (but retain your optimism), and then you chase your losses (taking out loans, racking up credit cards, borrowing or stealing from family). At some point, the losses are too big to hide. Then comes the bail-out. A parent or family member will pay off the debt with the promise that you will stop gambling, but as Lawhon pointed out, giving money to a gambler is like giving cocaine to a drug addict.
If you read that and think, "That would never happen to me," just keep it in mind the next time you go to a casino or horse track. Casino owners know that if you want to get people hooked, let them win, especially those who make big bets. Those destined to become compulsive gamblers will often experience beginner's luck.
The Lottery: The Paper Dream
Whether you buy the ticket at the gas station, liquor store, or the customer service desk at the supermarket, purchasing a lottery ticket gives you ownership of a piece of paper representing a dream. For a few hours or days (depending on the timing of the next drawing), you can indulge in the fantasy of being a lottery winner. What would you do if you won? Would you quit your job? Buy a house, boat, car, or airplane? Donate money to those in need? Finally, take that dream vacation to Fiji? It's not until you find out you are not a winner that you need to let go of that dream (or buy another lotto ticket). In their article, "It Could Have Been You": How States Exploit Counterfactual Thought to Market Lotteries, Janet Landman and Ross Petty call this visualization process "prefactual thinking." State lottery marketing and advertising experts recognize and exploit this thought process through their messages to you. If you've ever heard the phrase, "you can't win if you do not play," you likely encountered it from a lottery commercial or read it on a billboard.
On Tuesday, April 8, 2025, the Mega Millions lottery introduced the new rules with better odds and higher prizes. According to megamillions.com, here are the updated prizes (the range depends on the multiplier):
- Jackpots now start at $50 million (up from $20 million).
- Match 5 (five white balls) ranges from $2 million up to $10 million (up from $1 million)
- The Mega Ball alone now pays between $10 and $50 (up from $2).
So, what are the odds of winning the jackpot? Previously, this lottery used 25 balls instead of 24, so the odds of winning were 1 in 302,575,350, but it has improved to 1 in 290,472,336. To put that into perspective, imagine facing a football field. Spread out on the field are 290 million coins, and one of those matches yours. Now, put on a blindfold, spin around, and throw a javelin onto the coin that matches your own. It is not impossible, but very unlikely.
In 2022, Americans spent $97.8 billion on lottery tickets, which amounts to approximately $380 per American adult. However, according to a Gallup poll, only about half of Americans buy lottery tickets. While we also know that most of those who play the lottery only buy a ticket on rare occasion, let's say the average amount spent is $760.
The graph below shows the results of what would happen if you invest $760 into the stock market, then add $65 per month for 30 years with annualized compounding interest rate of 9%, you will have approximately $116,000. That may or may not be enough for you to feel "rich," but it certainly has better odds of success of than spending the money on the lottery hoping for good luck.
While the long-term savings strategy may seem dull. It is effective. For over two decades, the fiduciary financial advisors at the Hurlow Wealth Management Group have been helping Midwest Millionaires grow their wealth in a steady and systematic way. If you want to find clarity, make decisions with confidence, and feel comfortable in retirement, reach out to schedule a free consultation.
Sources:
megamillions.com
"Breaking a losing streak"
“It could have been you”: How states exploit counterfactual thought to market lotteries
gallup.com
investor.gov