Is the Lottery Ever a Good Investment?
Perhaps you read the title of this blog post and thought: "Duh, no." [Good job!] But, consider this: Mark Kon, a professor of Math and Statistics at Boston University calculated that someone investing $100K in the lottery at the right time had a 72% chance of turning a profit.
- Based on playing Cash WinFall, a game run by the Massachusetts state lottery
- Costs $2 to play, and, players pick six numbers
- The jackpot prize starts at $500K, and tops out at about $2.5 million
- Chances of winning the jackpot are 1 in 9.36 million
- If the jackpot reaches $2.5 million without a winner, the money is “rolled down” into lower tier prizes — i.e. matching 5 out of 6 numbers, which usually only carries a prize of about $4K, increases to $20K+ during “roll down” periods
So, if you gamble during a roll down period, are you guaranteed a win? NO.
In fact, Professor Kon said someone “investing” $10K during a roll down period would run the risk of a significant loss.
With all investments, there is some degree of risk. Here’s what makes “investing” in this particular lottery game so scary — if someone wins the “jackpot”, the value of all of the other smaller wins (i.e. matching 3, 4, or 5 balls) suddenly decreases drastically in value… meaning you could very well invest $100K and walk away with … a few dollars and a lot of worthless pieces of paper.
Frequently Asked Questions about Betterment
Just starting out exploring Betterment? These are the frequently asked questions that help people find their way.
How to Do a Direct IRA Transfer
If this is your first direct IRA transfer, don’t worry. We help process direct IRA transfers every day, and we’re here to make it as easy for you as possible.
High-Yield Savings Accounts: The Ultimate Guide
High-yield savings accounts can offer higher interest rates than traditional counterparts. Learn everything you need to know about them in this guide.
Explore your first goal
Our high-yield account built to help you earn more on every dollar you save.
This is a great place to start—an emergency fund for life's unplanned hiccups. A safety net is a conservative portfolio.
Whether it's a long way off or just around the corner, we'll help you save for the retirement you deserve.
If you want to invest and build wealth over time, then this is the goal for you. This is an excellent goal type for unknown future needs or money you plan to pass to future generations.