More than half of Canadians play the lottery regularly. Are you one of these people?
If so, please stop. Playing the lottery is stupid. Here’s why:
The odds of winning the lottery are about 1 in 85 million.
According to a Harris/Decima poll for Scotiabank, 5% of Canadians assume that they will be rich by winning the lottery. When Canadians between the ages of 45-64 spoke with Environics Research for TD Waterhouse, 32% said they expected to win the lottery.
Not just a $5, $10 or $100 prize – no, they expected that they would win the jackpot. The whole she-bang.
That is just plain crazy. Like I mentioned above, the odds of winning are right around 1 in 85 million. You have a better chance of getting stuck by lightening – twice – than winning the lottery.
Buying lottery tickets is the equivalent of flushing money down the toilet.
You may argue that “it’s only $1 for the hope of winning big”, but the reality is that you are not likely to win big. The lottery is the worst bet you can possibly make because the chances of winning are slim to none.
Gambling should not be seen as a form of entertainment. By throwing money away (which is essentially what you are doing when playing the lottery), you are greatly risking your financial future.
What to do with your money instead…
If you come into extra money, don’t rush out to buy a lottery ticket. Instead, do one (or more) of these things:
- Contribute to an RRSP. Don’t assume that the lottery is going to pay for your retirement. You are responsible for your future, so you are the one that needs to pay for it.
Save as much money as possible in an RRSP so that when you retire, you will have a bunch of cash to do with what you please. And remember, the earlier you start saving, the better off you will be down the road.
- Pay off all debts. Of course, before you can truly be free to enjoy your life completely, you need to rid yourself of all debt that may be looming over you.
Credit cards, car loans, lines of credit, your mortgage – pay it off. Every last penny. There is no greater feeling than knowing you don’t owe anyone anything. You must experience this type of freedom. Get your debts paid off as soon as you possibly can.
- Contribute to a TFSA. Every year, you are entitled to save $5,000 in a tax-free savings account. I encourage you to do this each and every year to save yourself money in taxes.
This amount applies to every person, so that means that everyone in your home is able to set aside this amount. If you are married, or in a committed relationship, that is $10,000 (combined) that you can save, tax-free, every year, toward your goals.
- Invest. Consider investing your money in CDs, GICs or even high-interest savings accounts (like ING Direct).
You are much more likely to make money by investing, than buying lottery tickets and crossing your fingers that you win millions or billions of dollars. Just remember to invest conservatively.
Lottery associations bring in around $8 billion dollars annually. Stop contributing to this nonsense and instead, save your money yourself. You’ll be much better off, I promise.
Don’t expect to win big with a lottery ticket, because chances are, you won’t. Ever.