The lottery (and all forms of gambling for that matter) holds particular fascination for me, probably because I am not a great believer in ‘chance’. I simply cannot fathom how some people are able to hedge their bets and rely on a series of random events for their financial security. This week I seem to have focused on teaching our children to have a positive relationship with money, and today’s “Let’s talk” is no exception. I’d like to explore the “lottery mentality” a little further and then discuss how this kind of thinking (i.e. relying on random windfalls) can affect our children’s perception of what it means to work hard, invest intelligently and create real wealth.
Let’s be honest: We’ve all had that “what if” discussion with our children. Mom, what would you do if you won the lottery? Dad, would you buy a yacht and sail around the world? Now, it’s not to say that these discussions are bad. It’s certainly good to dream about things that money can buy or experiences that money can help finance. The problem arises when a person develops a ‘lottery mentality’. The ‘lottery mentality’ occurs where a person becomes so focused on winning the lottery, hitting the jackpot, closing The Big Deal, landing The Big Fish or making it BIG. These people hedge their bets on a possible, future, random, windfall event that has the potential to change their lives and “make them happy”. The problem is that the ‘jackpot’ is generally out of their control and completely (or at least mostly) subject to chance. The ‘lottery mentality’ robs a person of the truth that real wealth is created through hard work, saving, planning and spending less than you earn.
The psychology behind playing the lottery, or any form of gambling and excessive risk taking, is quite interesting. Research in the USA shows that one third of the population believes that winning the lottery is the only way to become financially secure. It’s been proven that lottery players become so fixated on the dream of winning rather than on the reality of losing. Despite all mathematical evidence, they simply become totally obsessed with the prospect (no matter how small the chance) of winning it BIG. Research also shows that people who play the lottery were raised to believe that wealth is not within their reach of power – something which I find incredibly sad.
The maths behind the lottery is also fascinating. To win the lottery you would have to play the lottery every single week for 269 230 years. You need to guess 6 correct numbers out of 49. The equation goes like this: 49 x 48 x 47 x 46 x 45 x 44 = 10 068 377 520. Because the 6 numbers can be selected in random order, you may divide 10 068 377 520 by 720, which means the chance of you winning the lottery is 1 in 13 983 816. If you’re not the mathematical type, then perhaps you’d like this example. Your chance of winning the lottery is like taking a length of string 13 metres in length. Lie the string on the ground in a circle (i.e. the 2 tips touching). Then, with a pair of tweezers, pick up a grain of sand and throw it into the circle. Pick up a second grain of sand, spin yourself around to make yourself dizzy and then randomly throw the second grain of sand into the circle. Be sure not to aim. The chance of the first grain of sand hitting the second grain of sand is the same chance you have of winning the lottery.
And yet people still gamble. Why? Because, sadly, they have been raised to believe that their only chance of escaping poverty or being financially secure is through a stroke of sheer luck. Read those words carefully! They have been raised – educated, indoctrinated, taught, brainwashed – to believe that only a stroke of sheer luck (a 1 in 13 983 816 chance!) will be able to help them. I can’t help believing that every negatively phrased comment that we utter about money must surely affect our children’s perception of it. Every comment such as “We can’t afford that!”, “When I win the lottery, we’ll buy another car”, or “We’ll never have money…”.
What’s the solution? We need to make sure that our children are not raised with the ‘lottery mentality”. They need to understand that real wealth (both financial and emotional) comes through hard work, setting goals, having a vision, working towards a dream, saving money from the first pay cheque and planning carefully for the future. Every child has the right to know that they have the ability to take control of their own financial futures. No stroke of random luck or possible turn of fortune’s wheel will ever take the place of hard work, commitment and careful planning. You can escape the cycle of debt and poverty. You can take control of your financial situation. And you can raise yourself up to enjoy financial freedom. Make sure your children know this, too.
Have a super afternoon!
Categories: Financial Planning