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How to Win the Lottery: Grab a Snickers!

Written by Nickel - 6 Comments

Have you ever dreamt of winning the lottery? Well, the dream recently came true for a group of seven New York state IT workers who chipped in to buy what turned out to be the winning Mega Millions ticket. Apparently, this was the fifth largest Mega Millions jackpot on record, worth an estimated $319M!!!

In case you haven’t heard, the story of how it happened is pretty cool:

A guy named Michael took up a collection and headed to a nearby convenience store to play the lottery. As he approached the counter, however, he hesitated and picked up a Snickers bar. Meanwhile, someone reached past him to buy a Mega Millions ticket. That ticket – the one that was nearly Michael’s – turned out to be a loser. But the next one – the one that Michael actually bought – was a winner.

Another interesting twist of fate was that one of Michael’s coworkers wasn’t feeling very lucky last Friday, so he decided not to chip in for this particular lottery run. If he had, the so-called “Albany Seven” would’ve been the “Albany Eight,” and he would’ve been on Easy Street.

But honestly, I can’t really blame the guy for not playing. After all, the lottery is a sucker’s game. Don’t believe me? Then click through to check out a cool lottery simulator over at GetRichSlowly:

Note: I tried to embed the simulator here, but it’s too wide to fit in the center column. Oh well, I guess you’ll have to hop on over to GRS to check it out. Just don’t forget to come back!

After playing around with the lottery simulator, I found that I was consistently losing around 90% of my money. JD went a step further and tracked his results over 100 different 10 year periods in which he simulated buying two tickets per week. Overall, he “invested” $104k in the lottery simulator and wound up with a grand total of $11,554 for his efforts. That works out to an overall return of -89%.

As they say, the lottery is a tax on people who are bad at math. While it can be fun to play every once in awhile, you certainly shouldn’t get in the habit of playing on a regular basis.

Oh, and please be sure to let us know how your lottery simulations turned out. Did you strike it rich? Or did you lose the bulk of your money like JD and I did? Please leave a comment and share your results.

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Published on April 1st, 2011
Modified on March 30th, 2012 - 6 Comments
Filed under: Miscellany

About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

6 Responses to “How to Win the Lottery: Grab a Snickers!”

1
Steve Says:
April 1st, 2011 at 5:12 pm
How does the computer pick the numbers? I assume they are randomly generated at the time the ticket is printed, perhaps based on a timer in the machine (a standard way to “seed” random numbers.) If so, maybe if he hadn’t bought that snickers he would have bought the ticket one second earlier, and it would have been a different number. Cute story though.
2
Elle Says:
April 1st, 2011 at 6:08 pm
I lost 98% when I did the lotto simulator for a year. I’ll stick with investing – getting much better results
3
Stephanie Says:
April 2nd, 2011 at 11:43 am
I have heard the argument that, if people are buying lottery tickets together in a pool, you should join in. The low cost is nothing compared to the weird feelings you’d have if you’re the one person in the office not to join in. Yes, the odds are against you. But I think that might be one of the few times I’d play the lottery.
4
Roland da Silva Says:
April 2nd, 2011 at 12:36 pm
I have been blessed/cursed by serendipity/synchronicity apparently since birth. Things happen to me that, by all odds, shouldn’t. I can’t complain because the bottom line is positive. I occasionally buy a lottery ticket on a whim. It isn’t winning or losing but the “thrill of the chase”.If you don’t try, you can’t win! All things in moderation, Virtus squat in medio (Thomas Acquinas/Aristotle).
Cheers. *rolandQmtl*
5
Newlyfrugal Says:
April 2nd, 2011 at 6:15 pm
I overheard a middle-aged man buying lottery tickets. He said, “I’m here to invest in my retirement.” My first thought was, “what an idiot!” If he saved his money and invested it in a mutual fund, he would likely receive 10% or more return. We both lived in the same small town and I never heard that he won anything. Yet, week after week, he flushed hundreds and thousands of dollars on lottery tickets…hoping that he would win big someday. He died pennniless.

I save my money in a Rewards Checking Account and invest the bulk in brokerage firms. Never would I buy a lottery ticket regularly and depend on it for my retirement. However, I will spend $1 to $2 for a Lotto pick every few months when the idea strikes me. If I win, fine. If not, I never expected to win anyway.
6
Chucks Says:
April 4th, 2011 at 11:09 am
@Newlyfrugal
The sort of fellow you describe makes me very sad. I remember being in convenience store when a poor fellow came in to claim some small tickets, maybe for $10 or so. What did he do next? Bought more lottery tickets with his winnings, and then some! I feel like these are the sorts of people who make up the bulk of the spending on the enormous pot and feel very badly for him.

On the other hand, if you spend money on lottery tickets as an entertainment expense, the return is not all that bad. The difference between the cost of the $1 ticket and the expected value is going to be worth the enjoyment of knowing that one has a chance at a fabulously large jackpot for many. We plunk down $10-12 to see a two hour movie and expect to receive no money in return, dropping $1 on a lottery ticket isn’t all that bad in terms of entertainment rewards.

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