LIKE TO GAMBLE? DO IT FOR FUN, NOT PROFIT
By John Ingrisano
Director, Family Finance Conference Center
Here’s a short quiz.
Question # 1: At the end of 50 years, how much money do gamblers end up with who “invest” $50 a week on lottery tickets or at the casino?
Question # 2: At the end of 50 years, how much money do non-gamblers end up who put $50 a week into an IRA or other long-term investment, one that earns, say, an average 5% return?
Answer to question # 1: zero! If you think otherwise, you’re fooling yourself … or maybe you’re that 1-in-100,000,000 who actually hit the jackpot. (I’ve heard about those folks all my life, but never actually met or even saw one.)
Read on for the answer to question # 2.
First, a brief rant. One of my biggest pet peeves (this one’s about the size of a male yak) is standing at the counter of the gas station/convenience center waiting to pay for my gas, and I’m behind this guy or gal hunched over and frantically scratching off lottery tickets with more determination than a dog going after fleas.
Now, I really don’t mind the waiting, and I admit that I do enjoy gambling from time to time, so don’t get me wrong on this. BUT … these folks almost always are driving a car my father might have traded in fifteen years ago and they look like they’re living from paycheck to paycheck … or even three or four paychecks behind. (Add in that they’re buying $7/pack cigarettes and I’m ready to blow a gasket.)
I know, I know, it’s not my business. However, I see some folks who do this every week, who shell out anywhere from $20 to $50 hoping to hit the big one.
So, here’s the skinny on gambling, whether lotteries or casinos: If you like to gamble, great. It can be good recreational fun. However, did you know that, according to Thomas J. Stanley, author of “The Millionaire Mind,” most millionaires almost NEVER gamble.
So, let’s imagine that my friends at the gas station are “investing” $50 a week in lottery tickets. That’s $2,600 a year they’re out! (If they win a few bucks, they almost always buy more tickets.) They scratched off enough for a mini-vacation or purchase a newer car. Money down the drain.
Now imagine (yes, this is where it gets boring, but pay attention), they put that money into an IRA, and let’s say again that the rate of return is 5%, compounded monthly. They start when they are 18 and just beginning their first job. They continue until they are 68 and ready to retire.
In 50 years (and here’s the answer to question # 2) that $2,600 per year has grown to $580,000. That is one sweet retirement nest egg.
The bottom line: Like to gamble? Fine. However, if you want actually to become wealthy, talk to your financial advisor about where to put your money.
Now, go out and work hard, make money, have fun and save a little each week for the future.
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Want to learn more about how to manage your money and your life? Check out The Back to Basics Book of Money! A Couple’s Guide to Financial Peace. The book contains 10 valuable Couple Money Skills. Plus, the Back to Basics Book of Money Workbook (which dovetails with the main text) offers 31 practical, hands-on Wealth Builder activities that can help you and your partner build financial and domestic stability. Both the book and workbook, which retail for $31.98 plus S & H, are available at the Family Finances Conference Center website for $27.99 total.
The Family Finances Conference Center tailors programs to the unique and individual needs of client organizations and their members and employees, based on the principles of the book and workbook set, The Back to Basics Book of Money! A Couple’s Guide to Financial Peace.
For more information, contact me at the Family Finances Conference Center by email (john@b2bbookofmoney.com) or my direct phone line (920-559-3722).
John Ingrisano
Director
Family Finances Conference Center
204 Lakeview Drive
Algoma, WI 54201
(920) 559-3722
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