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.
How to Prioritize Your Financial Goals
If you identify all your financial goals for investing, you’ll likely find you can’t fund them all at once. Get our expert view on how to start prioritizing them.
How to Do a Direct IRA Transfer
A transfer of your IRA to Betterment is easy and can be done online in four simple steps.
Investing in Your 30s: 3 Goals You Should Set Today
It’s never too early or too late to start investing for a better future. Here’s what you need to know about investing in your 30s.
Explore your first goal
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.
How would you like to get started?
Your first step toward a smarter investing future starts here.
Create a Betterment account
Go ahead and join the smart, modern way to invest.
See what we can do for you
Tell us a bit about yourself, and we'll show you the benefits of investing with us.
Get a free investing checkup
Help us get a sense of your investing approach and see how you could improve.
Transfer a 401(k) or an IRA
Move an existing retirement account into a Betterment IRA.
Download the mobile app
Enjoy the Betterment experience anywhere on the go.