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Here's an Almost Guaranteed Way to 'Win' $50,000 or More at the Lottery

By Miranda Marquit

When I turned 18, I got as crazy as someone with conservative values who was raised by conservative parents is likely to get.

I registered to vote.

I bought a pack of cigarettes (but didn't smoke anything).

And I bought a lottery ticket.

I scratched it off right there, and I won a couple of bucks.

Even now, I sometimes buy a lottery ticket -- just to see what happens -- but I know that the lottery isn't a retirement plan. It would be fun to win, but I've never won more than five dollars, and I know I'm not likely to.

The odds against striking it rich with lottery winnings are depressingly high. You can use an online Powerball simulator to get an idea of your odds of winning. The odds of winning the big jackpot at the time of this writing are 1 in 175,223,510.

Think of the money you could be spending to try and win the lottery. If a Powerball ticket costs $2, and you buy five tickets a week, you spend $10 a week. That's $520 a year! Over the course of 30 years, that's $15,600.

What if you took that money and, rather than trying to fight a losing battle to win the big jackpot, you invested it? Let's see how that would work out.

It's true that investing isn't a sure thing. However, your chances of seeing an increase -- rather than just throwing money away on Powerball -- are much greater when you invest.

If you put $520 a year (compounded monthly) into a cash product that returned 1.05%, after 30 years your total would be $18,343.34. That's better than spending $15,600 on the lottery. If you are willing to take a little more risk, say putting the money in bonds yielding 3.69%, you could do better: $28,555.56.

If you could get an annualized return of 7.5% on a stock portfolio, after 30 years that $520 a year would result in $58,754.23. My colleague Amy Calistri, editor of StreetAuthority's Daily Paycheck newsletter, gets those kinds of returns and better with her dividend-focused investing strategy.

Inflation might take a bite out of your earnings, but it would still be better than spending all of that money on the lottery.

More from InvestingAnswers:

The appeal of the lottery, of course, is that you could strike it rich and win. Discovery's WebMATH site points out that one-third of the people living in the United States think that winning the lottery is the only way to become financially secure in life. But, as you can see, you have a better chance of seeing solid returns if you invest.

Of course, Powerball isn't the only way to play the lottery. When I play the lottery for fun, I usually buy instant-win scratch tickets. These tickets are a little more fun, and you have a better chance of winning something -- even if that something is only $2 or $3. Let's take the $10-a-week example of playing the lottery, and assume that you manage to win $4 each week. That means that you are only out $6 a week.

However, you are still behind. You win $208 a year, or $6,240 after 30 years, but you've spent $15,600 over those three decades, so you're still short $9,360. Instead of earning compound interest for 30 years by investing that $10 a week, you're losing money -- and it's made worse by the fact that your purchasing power is eroded by inflation.

That's not to say that you should never buy a lottery ticket. I think it's fun to occasionally spend a few bucks on an instant-win ticket. But I never think for a minute that I'm going to make it big. And I don't "invest" regularly in buying lottery tickets hoping that my retirement dreams will come true when I hit the jackpot.

To me, the lottery is entertainment. It's something that I enjoy after all of my other obligations have been paid and if I have money left over for fun. A solid investment strategy, taking into account proper asset allocation, is my long-term financial plan.

The Investing Answer: The chance of winning millions and being set for life is a powerful draw. However, your odds of winning big in the lottery are so slim that you are more likely to find a pearl in an oyster or get struck by lightning. Instead of considering the lottery your long-term financial plan, start investing. You can open a brokerage account with as little as $25, and make small investments over time. The power of compound interest is much more reliable than Powerball.

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Ms. Kelsey Zach-ow by name, AGE 24 from Michigan USA

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November 30 2014 at 7:53 PM Report abuse rate up rate down Reply
Asess Million

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March 01 2014 at 10:19 AM Report abuse rate up rate down Reply
Henry Nancy

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February 10 2014 at 10:50 PM Report abuse rate up rate down Reply

50,000 dollars at retirement might buy you a nice suv and thats about it. 200 million dollars will buy you a dozen suv's and still leave plenty of money in the bank for you to live comfortably.
I'll take my chances with the 5 bucks a week on the lottery.

December 11 2013 at 12:48 PM Report abuse rate up rate down Reply

Where can you invest $10 a week with a reputable investment company? Most have minimal deposits required

September 17 2013 at 1:55 PM Report abuse rate up rate down Reply

how about I continue to play the lotto because I enjoy it. I also realize 50K isn't a life changing windfall. but a few million is.

September 15 2013 at 10:23 PM Report abuse rate up rate down Reply
1 reply to irshleaf's comment

Exactly ! Why does no one ever think of the fact that it's cheaper and less time consuming than going to a casino ? I don't think of it as retirement or any other type of investment but it is fun to take a chance that two dollars might just bring back a lot more.
One more little detail, if everyone stopped playing the lottery tomorrow where would all the money that lottery once brought in come from ? That's right an increase in taxes because all the lottery is in reality just a voluntary form of taxation.

September 16 2013 at 3:02 PM Report abuse rate up rate down Reply

As my university math professor always said - the lotto is an inverse tax on stupidity. The stupider you are the more you play.

September 15 2013 at 9:47 PM Report abuse +2 rate up rate down Reply

\"Here\'s an Almost Guaranteed Way to \'Win\' $50,000 or More at the Lottery\"

Heres one way.
Spend $100,000 a year on lotto tickets and you are reasonably assured of winning $50K/year.

September 15 2013 at 9:44 PM Report abuse +1 rate up rate down Reply

I am not too happy answering your on line speakers that lead nme on and then hit me with a request for a payment to see the \"miracle\" stock or investments that will make me wealthy in the long term! Maybe a free
\"tip\" with my guaranteeing payment of your fee if I made money would be
doabl;e! With an 8K bankroll and at 88 years...I need help!

Orlando C. Madeira ( )

September 15 2013 at 2:11 PM Report abuse rate up rate down Reply

well said i do agreed , i have to work my trouble away, and not win it away.

September 15 2013 at 1:57 PM Report abuse rate up rate down Reply