The gambler's game
Playing the lottery isn't the way to secure your future. Careful investment can do it
Every time you hear of a lottery winner, you add this to your mind since the outcome appeals to our emotions whether or not the outcome is truly likely. There seems to be an emotional component to decision making, and this is especially true when gambling.
Let’s face it. Storing the memories of people retiring comfortably after diligently saving all their lives isn’t a common occurrence. These stories, although you may have heard them in the past, aren’t quite as memorable as recalling stories of lottery winners, investors who made millions overnight or those big-winning poker players and gamblers.
The reality is that it is much easier to recall a local lottery winner. This makes it that much easier for you to imagine what it would be like for you to win. And your brain then assumes that the scenario is not only possible, but probable. This is why big winners are featured on the news along with all those human-interest, heart-tugging stories. Watching them makes it easier for our brains to think the big payout could happen to us.
On a personal note, my sister has been playing the same lottery ticket numbers for the past 32 years and has never won more than a free ticket or a couple hundred dollars. She is convinced that one day her numbers will hit the jackpot and recites the frequently uttered statement “you can’t win unless you have a ticket.”
This type of thinking is hard for people to change, but the facts should never be ignored. The previous numbers played on a lottery ticket in the past have no effect on the future. The odds of a win are based on each individual play, no matter what happened before.
Investors “playing” the stock market tend to make the same mistakes. I have seen even smart advisers choose to buy into stocks that are in a 40-50 week low, on the theory that they are “due” to go up. Others may even decide to ignore stock that is actually going up, fearing that the good times can’t possibly last.
Investing in the market is not a game. You are gambling with your money if you believe “everything evens out every time.” It does not.
Each independent event has its own odds, regardless of how you rationalize it in your mind. This is true with our personal lives, our investment choices and, most of all, gambling.
The Merriam-Webster Dictionary defines gambling as “the practice of risking money or other stakes in a game.” So, treat it as such — it is a game! This is not the way to build your retirement future or a way for you to improve your situation.
You are the only one who can make that happen, slowly over time, doing the right things, striving to better yourself and consistently saving for your future.
Christine Ibbotson has written four finance books, including the bestseller How to Retire
Debt Free & Wealthy. info@askthemoneylady.ca