Ask the Fool

Q. How can I impress upon my children how virtually pointless it is to buy lottery tickets? -- A.M., Miami

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A. We wish more adults understood what bad investments lottery tickets are. It certainly would be a helpful exercise to reinforce your own understanding to explain it to your kids.

Consider the typical lottery game. If, to win the jackpot, you have to pick six numbers out of 44, your odds of winning are 1 in 7 million. The odds of winning California’s Super Lotto, which requires you to pick six numbers out of 51, are 1 in 18 million.

Here’s an analogy that will convey to your kids what lottery odds are. Have them imagine that they have to find one individual in the city of Los Angeles, population about 3.1 million. Have them imagine that they pick a part of the city at random, then pick a street at random and an address at random. Then they knock on the door. Do your kids think the one person they’re looking for will be who answers the door? And that’s with a 1 in 3.1 million chance--a much better chance than they’ll get with a Super Lotto ticket!

It’s also good to explain why lotteries exist: to raise money, not to distribute it. States--and this is true of California--typically keep about half of every dollar spent on a ticket. For the vast majority of people, $1,000 spent on lottery tickets is $1,000 thrown away. Twenty years later, that $1,000 will still be gone. A thousand dollars invested wisely in stocks, on the other hand, could, if it grows at, say, an average of 11% a year, become about $8,000 in 20 years.