Why Do People Bet on the Lottery and Why You Shouldn’t

Winning the lottery is a dream come true. I mean, imagine earning millions of cash with just the price of a cup of coffee (or even less!). Imagine, what you can do with all the newfound wealth?

 

You finally have access to the lifestyle you want. All the food, clothes, cars, and houses. Name it. If money can buy it, you got it. But even with this promise of such grandeur, it’s better not to “invest” on lottery tickets.

 

Why not, you ask? For the sake of your finances, these are reasons why you should not spend your hard earned money on lottery tickets.

 

What Are The Odds? It’s Hardly an Investment

 

The most obvious reason. What are the odds of winning? In the Philippines, the “easiest” lotto odds are at 1/5,245,786 for a P 6 Million Peso (roughly $115,000) prize.  And it further plummets to 1/28,989,675 for the P 30 Million Peso bounty (roughly $573,000).

 

Assuming you stand in your place right now, it’s more probable to get hit by a lightning at 1/960,000 as of the moment than winning the lottery. I know that life has been tough on you. But would you “invest” on that ultra-slim chance of recouping your money back?

 

Is winning the lottery your only chance to fund your retirement or have a better life? Although still hard, I tell you, there are other options out there with chances higher that getting electrocuted.

 

You can start off by setting up a budget with the Japanese Kakeibo technique or learning practical and highly in demand remote working skills. These might not get you rich yet, but it will certainly give you a baseline to wealth creation.

 

But going back, given these odds, why do we still cling to that hope? It can be attributed to some of our psychological tendencies. Here are as follows:

 

Success Stories: Availability Heuristics

 
Success Stories: Availability Heuristics

Image Credit: BigStock

 

Basically, this is the tendency that something is likely to happen based on the number of examples known in your mind. With so many examples you can think of, you forego the odds and think that winning is possible. But do you know how many failed?

 

Well, you can argue that it’s the same with succeeding in a business or in your career. But the difference is, in a lottery, you don’t have any control over the outcome. You can employ statistical and probability techniques, but none have been exactly proven.

 

But in your business or your career, succeeding may have a slim chance, but people have used strategies for it to work. And it has worked countless of times for so many people.

 

So why not try your chances there instead?

 

It Will Hit the Numbers: Gambler’s Fallacy

 
It Will Hit the Numbers- Gambler's Fallacy

Image Credit: Getty Images

 

When gambling, ever got the feeling when a card or a number hasn’t played yet, it is bound to show up. In a single game, yes there is this probability. So most likely, the card will play out in the next games as well, right?

 

Not exactly. Remember, that probability is just exclusive to that single game. If you apply it on lotto numbers, predicting the number “31” for the next draw just because it hasn’t come out yet is wrong. That is the gambler’s fallacy.

 

Every number has an equal chance to be drawn per lottery announcement. It is independent of all the other lottery draws out there. Just like a coin toss’ 50% probability or the 1/52 in a deck of cards.

 

I’ve Paid So Much Already: Sunk Cost Fallacy

 
I've Paid So Much Already: Sunk Cost Fallacy

Image Credit: Getty Images

 

If you have been betting for so long, you have so much “investment” already. The investment can’t be recovered if you stop now, right? The irrecoverable money is called the “sunk cost”.

 

And people make irrational decisions like continuing to spend money on lottery tickets because they have spent so much on it. Not knowing it’s already sunk cost. It preys on your fear of loss in the future. Which is true, you won’t get back your money if you stop. But you forgot that continually spending on it causes further lost in the present.

 

And again, it doesn’t improve your chances of winning. It’s still the same. With this, a sunk cost incurred back then should not be a factor in your decision-making.

 

I Was So Close to Winning! I Should Bet More.

  I Was So Close to Winning! I Should Bet More.  

What if you nearly hit the jackpot? You almost won! It means you are close to hitting the prize money very soon!

 

Again, this goes hand-in-hand with the independence of each draws probability. Hitting a close win doesn’t mean the odds change for the next draws. The near-miss effect is a failure that keeps the person motivated to try for more. I mean, it’s just a few digits away. It’s bound to happen. You can feel it!

 

In sports, business, or careers, it can be a useful motivator to push thru. But again, we don’t have direct influence over the odds in a lottery game. So forego this thinking ASAP before you are trapped.

 

But If You Really Want to, When Should You Actually Buy Lottery Tickets

 
But If You Really Want to, When Should You Actually Buy Lottery Tickets

Image Credit: Getty Images

 

Well, even with the reasons above, if you still want to buy lottery tickets, go for it. Don’t say we didn’t warn you.

 

But you should change how you view it. It is not an investment and certainly not your retirement gateway. If you finally learn how to budget, maybe you can take it away from your entertainment budget.

 

Similar to watching a movie or playing an arcade game, you don’t expect to get back your money when you spend for it.

 

View it as a payment to feel the thrill of the possibility of winning or to momentarily fantasize about that new car or house you will get from it.

 

But again, this is just for entertainment. If you expect to recoup your money, you’re in for a big disappointment. Better start praying for lightning.

Leandro Eclipse

Leandro Eclipse is an entrepreneur who loves to travel. He believes in building multiple Location-Independent Sources of Income. Because if you are going to work anyway, might as well do it while exploring the world. Self-proclaimed foodie and tech geek. Follow him on IG @mikoeclipse.

Comments
SHOW 0 COMMENTS

Leave A Comment

Your email address will not be published. Required fields are marked *