Billeater: That's the Ticket - Why Being a Lottery Winner is Often a Losing Proposition

Oh to win the lottery! It's part of the American dream…you buy a winning lottery ticket and never have to work another day. Luxury cars, mini-mansions, furs, jewelry and all the vacations you could ever want race through your mind in fleeting thoughts of winning the big one! But the dream is often better than the reality.

If you talk to people who won the lottery, however, you'll find some of the most miserable folks on earth.

The Winners May Not be So Lucky After All

"Lucky" winners often find themselves miserable within 3 to 5 years. Many who have won lotteries found that they were better off before winning. In press conferences, they often verbalize honorable intentions--pay off bills, help a sick family member, purchase a house, and maybe a modest car.

What many fail to consider is that winning doesn't turn them into financial planners overnight. Lottery winners usually have limited knowledge of saving and investing which, of course, is why they were throwing thousands of dollars at the lottery in the first place. These individuals fall to the traps of scam artists and unscrupulous relatives who suddenly arrive at their doors with sad stories and open hands.

One Chance in a Million? Try One in 195 Million

Now if you are still thinking, "That wouldn't happen to me," take a second to look at the numbers. The majority of those who play the lottery will never see more than a few dollars from their efforts to win. The average return on each lottery dollar spent is 50 cents--and that's after you calculate all the winners. Your take is likely to be much, much less.

In a lottery where you must pick six numbers correctly to win and the numbers run from 1 to 50, your odds of winning are 1 in 15,890,700 (yes, that's almost 16 million). Now consider Powerball where there are five numbers ranging from 1 to 59 and then you must choose the correct Powerball numbered between 1 and 39 to win. The odds of winning that jackpot? One in 195,249,054!

The lure of a becoming the world's next millionaire causes some to shell out hundreds each month buying worthless tickets. Some of those "lucky" winners might hit $1,000 and then find themselves buying more tickets with the money--never thinking for a moment about the $4,000 they spent to win it.

How Winners Become the Biggest Losers

After shelling out all that cash to finally hit the jackpot, those lottery winners often make bad decisions when it comes to spending their windfall. Investing and saving is not high on the list of priorities. Houses, cars, trips, and living the high life take precedence over all else. Winners rarely consider the cost to maintain such a lifestyle in taxes, maintenance, repairs, etc. The money is either spent or handed out to others in five years or less. Winning the lottery often ends in bankruptcy.

Save the Money Instead

Investing the money you would otherwise spend on lottery tickets in 401k or IRA makes a lot more sense. While it may take a few years to realize a profit, the money is not lost forever. Since your chances of winning a lottery are slim to none, you have nothing to lose if you decide not to throw your money away on a dream that turns nightmare and instead invest quietly in a brighter future.

Jessica Bosari writes for the money-saving site, Billeater.com. The site is devoted to helping people reduce expenses, save money and find great deals. Pay Billeater a visit for more money-saving tips!