A Very, Very, Bad Retirement Plan

"You know horses are smarter than people. You never heard of a horse going broke betting on people." - Will Rogers

Tonight's jackpot for the Mega Millions is $267,000,000 with an estimated cash payout of $163,983,325. While I don't typcially play the lottery, I'm going to buy a ticket (or maybe two:-) for tonight's drawing. Here's why I am playing:

The cash payout is reasonable given the odds of winning are 1:175,711,536.

It is a reasonable amount of entertainment for one dollar. For a few hours, my ticket has the potential to return a lot of money.

Here's why I don't play the lottery regularly:

The odds of winning are 1:175,711,536. As Durago Bill points out in Mega Millions Odds, even at a $163,983,325 jackpot, the statistical return on every $1 ticket is only $0.60. So it's a bad return, statistically. Unless, of course, one is holding a jackpot ticket :-)

While it is reasonable amount of entertainment for one dollar, investing a dollar a day produces a guaranteed jackpot.

Part of the money is used for our schools. I don't like the concept of putting the money to good use to convince me to make a bad decision.

So even though I don't usually play the lottery, I will do it today. It's one of the bad personal finance decisions that I make four or five times a year:-) On Sunday, the dollar I might have spent on a lottery will be put back into savings.


For more on Reaping the Rewards, check back every Friday for a new segment.

Photo Credit: morgueFile.com, Clara Natoli

This is not financial advice. Please consult a professional advisor.

Copyright © 2007 Achievement Catalyst, LLC