Friday, March 16, 2007

The Stupdity of the Mega Millions Jackpot

By Bobby

The lure of "lotteries for education" under the Zell Miller Education Planin Georgia has pushed North Carolina, South Carolina, Tennessee, and Oklahoma into implementing state-run "education lotteries" in the past ten years. Unfortunately, people do not understand the stupidity of the lure of Mega Millions or Powerball, the other major multiple state lottery game, now run in a majority of states of the Union.

Seven years ago, when I began to take control of my investments through advice learned from The Motley Fool by deciding to participate in Dividend Reinvestment Plans, I learned the dollars dropped into a DRIP program would cash more than money placed in a state lottery.

People should understand that instead of spending ten or twenty dollars persession on the false hope of winning the multiple-state lotteries, the two big-money multiple-state lotteries, the twenty to forty dollars could be held in savings, and keeping the savings to the point you can invest up to fifty dollars in a strong stock, mutual fund, or index fund. Many well-managed firms such as SCANA, Duke Energy, and Lowe's (I own all three) offer Dividend Reinvestment Programs which allow you to spend as little as $25 (that's probably one to three cycles of lottery drawings) per payment,and others such as Exxon Mobil $50 (two to six cycles of lottery drawings) to participate in the programs, once you purchase your first share through programs where you buy your first share directly from another person through a program similar to First Share. (If you do not own the shares required, you may also spend $250 to participate in the program without buying shares from another party.)

When you consider the money wasted in the big lottery drawings by the millions of losers who do not make it rich, and you avoid them by pouring your cash into stocks you study, you will be guaranteed winners by studying the stocks and their industries. Ten dollars in a well-performing stock or mutual fund (even if that is just a fraction of a share) will beat even one dollar in the false hopes any day.

Once the big lottery dream fades away, and someone has won the money, the millions of losers will be beating themselves for the money that ran away from them. But those who poured their $10 and $20 bills instead into buying stocks will be rewarded with investments which will last the test of time, and will be paying themselves every quarter.

The investing money will pay dividends which can be reinvested long after the wasted dollars of an euphoric mega-jackpot lottery are gone.

1 comment:

  1. Good post. I don't play the lottery at all. I'd much rather save for my retirement.


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