Lottery: The Retirement Plan For Those Who Don't Understand Mathematics

Last Update: June 25, 2013
When my friends first heard I was leaving my good job to start my own business, they generally thought I was crazy. Even my friends from business school scolded me and said things like 'Don't you know most new business fail?'

Owning Your Own Business - Insane!

Of course I knew the odds were against me. There are all kinds of statistics on the probability of a new small business making it. I've been teaching business for years and every textbook has a different number. Some say 90% will fail within the first year, other sources report 95%, still others say 99%.

The number is just trivia. I tell my students the odds are against you.

To make a business succeed you need the right combination of
  • Something that is missing in the market place
  • Something you can provide better than anyone else
  • Something that enough people are willing and able to buy
  • Something that you can sell for more than you paid for it
You also need
  • Enough money to survive until the business makes a profit
  • Tough skin to ignore the skeptics
  • Acceptance of the emotional and financial roller-coaster of owning your own business
  • Perseverance (Stick-to-it-iveness is more important than being a genius)
Most of my students are afraid of such an undertaking, but most of them will cheerfully buy a lottery ticket and believe this will be the answer to their problems.

In my class, when we are discussing financial planning, I write on the black board in the largest letters I can,


Then I tell them the Lottery is the retirement plan for people who didn't learn math. If you play the PowerBall game, your chance of winning the jackpot is 1 in 175,223,510. You have a better chance of getting hit by lightning.

If you take the worst case numbers of success in business, then your chance of success (or hitting the jackpot) is 1 in 100. Statistically, your business is more likely to succeed by a factor of 175,000 as compared to the PowerBall game.

So why would anyone buy a lottery ticket?
  • The risk is minimum – investment $2.00
  • If you play, you will probably lose. If you don't play, you absolutely won't win.
  • So if you lose, it's really no big deal, or a surprise.
If you lose in business, and you have everything you have on the line, you risk all your money, your house, your credit score, your reputation.

Wealthy Affiliate is a low cost, minimized risk way to dive into internet marketing. I believe any of us can beat the odds and make this success if we follow the advice of the experts, and never give up. Most people will give up too soon.

This place makes much more sense than buying a lottery ticket.

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maryson Premium
Hello,kaliinozarks. Thanks much for this interesting and inspiring article provided. Once,in 1976 I visited the Ozarks in Missouri. The writer of this article is a reminder of mine. God bless you. Bye for now.

kaliinozarks Premium
This is indeed a beautiful part of the country. I am semi-retired here and I couldn't be happier with my choice. I never want to return to the city.
kiya05 Premium
What cracks me up, is how people will buy one or two lottery tickets a week, and yet think you're stupid for paying $47 a month to learn how to really make some money. If they continue, they will have paid that $47 in a couple months, with nothing to show for it, yet we're actually learning, and working toward something. I think most people buy lottery tickets, in the off chance of winning "the Big One" and not have to lift a finger, where they actually have to work to make any real money, here or anywhere else. So rather than work for it, they'd rather put their hopes in a miracle, something that will probably never come. I think that's why I don't gamble, the odds just aren't so great. I know people who have won big, but they also lose big, so it all evens out, at best. Nope, I'd rather stifck with WA. I haven't done much so far, but even so, I've received more back than I ever would from buying a lottery ticket, and I've never regretted the money spent.
kaliinozarks Premium
I read somewhere that most big lottery winners (you know, the grand prize) go bankrupt within a few years. That tells me their problem isn't earning money - but in bad money management.

When the small amount of money I earn teaching (it is pathetic), I have to be one of the best money managers ever. (Thanks, Mom).
kiya05 Premium
I know, I've read that too. A lot of money isn't always a good thing, people go crazy and think they can have the world, but even a million dollars doesn't last forever. I think they think it does though, and they don't even keep track of what they're spending, or something.

I'm terrible with money, I still live like a single military person, get paid, spend it, wait until your next paycheck. I've gotten better since I bought this house, but I never have anything in savings. I'm going to put a couple thousand in savings when I get this money, and not touch it except for real emergencies. I've just been lucky nothing major has happened, but even if it does, there's always a way.

My dad was the money manager in our house, but he never taught me anything. I remember when we were kids, he gave me and my sister 10 silver dollars, she saved hers, and I immediately rode my bike to the store and spent it. He was furious, but still never said anything about why I should save it. I think my sister just watched me get in trouble all those years, and did just the opposite, that's why we're so different today. One thing my dad did teach me, was to be an honest person, he pounded honesty in my head, and I was always a terrible liar anyway, so always got caught, so to this day, I just can't lie.

Anyway, I've made it this far in life on my own, and i've eaten mayonaise sandwiches at times, or whatever happened to be in the fridge, but I did OK, you can do that when you're single. I'm still not the greatest with money, if I want something, I usually get it. I wasn't like that when I was married, because I had someone else to consider, so I was actually pretty good at not overspending, but I still got what I wanted, and that was a long time ago.

I always heard that teacher's pay isn't that great, strange since in a way, you have one of the most important jobs, and have a major influence on the future. I'm shocked these days that kids have to buy all their own supplies, etc. We never had to buy anything growing up, just another thing that has changed for the worse.

Well, better go, and quit talking about me, me, me. You're going to end up knowing me better than most people I know, just from me going on about everything. But then you started it, so I'm not all to blame. It feels about 1,000 degrees out right now (slight exaggeration), so I might end up hanging out in the basement today, and put up my A/C tonight so I can sleep. I guess summer is here.
Shields Premium
Hey Kal, this is another example of hope. Votes have been cast for nothing more!
kaliinozarks Premium
We vote with our dollars, right? I guess those lotto games keep people hoping for something better. I wonder if any sociologists have ever studied if the lotto has beneficial impacts on peoples' perception of satisfaction?
kaliinozarks Premium
I also heard someone call this ... the lottery, a tax on people who don't get math.

I occasionally pony up a dollar and buy a ticket. I call it income redistribution.
Patricia R Premium
Kali, you are absolutely right! Thanks for the reminder, I don't play any games that cost money. All of those $2.00 lottery tickets add up.
kaliinozarks Premium
I know a guy whose parents were financially successful, gave him everything as a child. They are gone now and he's blown through all his inheritance. He is convinced it is his destiny to win the lottery. He is broke and hits up all his friends for money to play the games. He assures them he knows how the game is played and he will share big winnings.

One of our mutual friends made the mistake of giving him her credit card number. He charged up to her credit limit for lotto tickets - to the tune of over $1,000.00

She was a single parent who was barely scraping by Guess who paid back the credit card charge (it wasn't him).

Patricia R Premium
OMG Kali. Was it you.
kaliinozarks Premium
Oh goodness no that wasn't me. I've done some stupid things in my life, but not that bad. I saw that guy coming from a mile away.
Patricia R Premium
Glad to know that you have common sense. Thought so anyway.