Sunday, August 30, 2009

The Lotto Fantasy

Tweet It!
I recently spotted an advert for an e-book, entitled ‘Proven Lotto Winning Strategies Revealed' If the title is to be believed then it should become one of the best selling books of all-time.
I’m not sure however what the motivation to write this book is however. Shouldn’t the author keep this epiphany of knowledge to himself, else all his believers dilute the winnings!Recently Oz Lotto had a first prize of $90 million. This was shared between two winners. A cool $45 million each. Some expressed amazement that one of the ticket holders had won, with the first ticket they had ever bought.

What I find infinitely more amazing is the irrationality of spending $20 on something with odds so small that there is more chance of getting into a fatal accident on the way to buy the ticket, than actually winning.

I understand the emotional daytime fantasizing that such a purchase derives. The building of hope and dream building, yet ponder this thought. If we could have an alternate perspective to measure the odds would we indeed ever part with our hard earned cash?

Consider this. The odds of actually winning are in the realm of 45 million to one. There are close to 50 million combination of numbers. Imagine flying into Heathrow Airport, paying a sum of $20 that would allow you to randomly select one person in the whole of the United Kingdom who had the winning ticket?

You’ve got to be in it to win it, the believers cry out. Buy two tickets and double your chances! Technically that is true but practically, deluded. Lotto is a game of outrageous chance and the pursuit of systems and tricks is as pointless as trying to burn water.

There are only four strategies that can produce financial independence.

Save: squirrel away a significant portion of your income for a lifetime. After a lifetime of poverty and misery you may achieve significant wealth.

Inherit: a strategy often pursued by completely unmotivated individuals.

Investment: in time and money to leverage and compound results.

Lotto: Hardly a strategy, but a default mechanism that offers solace and hope to those who have lost faith in any of the previous strategies to produce the bacon.

A little fantasy can be fun. But, a lifetime obsession chasing windmills is the epitome of irrationality. Bon Chance!

No comments: