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Financial Planning > College Planning

Mega Millions? Meh.

By Bill Coffin

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I really don’t like gambling. The thought of winning, for me, is more than offset by the knowledge that I’ll probably just lose my money with nothing to show for it. This is why I decline invites even to nickel-dime-quarter poker games, why I consider scratch-off lotteries to be a sucker tax, and why I loathe casinos. Anybody who walks in really ought to know that the house has stacked all of the odds in their favor, and yet, people line up to dump their kids’ college funds into a black hole, driven by the self-defeating fantasy of making money by not actually having to work for it. I just don’t get it.

Last month, the nation was gripped once again by jackpot fever, as the multi-state Mega-Millions lottery drawing reached a record-setting $656 million payout. There is an interesting break point with lotteries that manage to build up enormous payouts. At some point, the payout gets so big that people who don’t normally play start buying tickets. And at that point, a winner is virtually assured, which, in fact, dilutes the chances of everybody else playing, even when you take into account that most of the folks buying tickets are buying more than one.

I suppose it’s a good thing that winning ticket holders – one each from Kansas, Maryland and Illinois – drew their lucky numbers on the March 30 drawing, for if they hadn’t, the next Mega Millions jackpot would have gone to nearly a billion dollars. At that point, I think the country would have collectively lost its mind.

Right now, there are a few very lucky, very wealthy people who I hope will find the right kind of financial advisers to steer them through the dangers of suddenly accumulated wealth. Thankfully, the couple from Illinois that won seems to have taken their luck seriously and have treated the handling of their newfound wealth as a full-time job, through trusted financial advisers. They are the exception, though. The bankruptcy rate among lottery winners is depressingly high, and I really don’t think we, as a people, want to live the fantasy of super-rich idleness. When you work your whole life, you realize what joy and pride can be taken from your labor, and it’s got nothing to do with money. It’s about honing a craft, serving others, making a difference. When we buy into the fantasy of the lottery, we are overlooking all of that. And when we actually win one, it tends to throw our lives completely out of balance.

I just wish that Americans could stop playing lotteries altogether and put that money into some kind of savings vehicle. Even if you just socked $20 a week under your mattress, in 25 years, you’ve got $26,000. Sure, it’s a horrible financial plan, but it beats frittering away that same money on a dream that does more harm than good.

Maybe insurers should start running their own lotteries except some of the money spent on “tickets” goes into a penny annuity of some kind. After all, insurance has always been a kissing cousin to gambling, insurers could easily make money off of it, and at least the players would get something for losing.

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