Most of the statistics on this blog are made up, if not properly cited. However, when I threw out the $1,000 number in a post about lottery tickets I wanted to be sure it was right.
It was close, but no cigar.
Using Bloomberg’s retirement calculator I compared two datasets. I assumed annual returns of 6% per year with annual contributions from age 25 to age 65.
The person who opts out of lottery tickets would save $16,500 per year. The person who opts-in would save $16,480 per year, and spend $20 on lottery tickets. The number was based on the current 401k maximum annual contribution.
The results were as follows:
- “Lottery ticket buyer” would amass a nest egg worth $2,553,572.43.
- “Non-lotto buyer” would amass a nest egg worth $2,550,477.19.
So, in total, 20 years of consistent lottery ticket purchases would cost you $3,095.24. However, upside potential for the lottery ticket buyer would be $200 million, making his possible gain 100 times that of the non-lotto buyer.
Yep. I’m still buying tickets.
Cool stuff this week
- The Dividend Pig posted about Walmart’s declining same store revenues. Always a drag on this giant.
- Krantcents posted about Successful vs. Unsuccessful people and I failed. Living at home makes you unsuccessful!
- Darwin says renters are deluding themselves.
- Amanda at FrugalConfessions profiled her experiences with class action suits. Class action lawsuits blow my mind. Free money! (Unless you’re the women of Walmart. ;))
- Flexo had a write up on how being nice may be costing you money on your paycheck, but only if you’re a guy. Nice guys and gals earn less, apparently.
- DividendMonk covered Warren Buffett’s tax rant better than anyone in a post about his NY Times Op-Ed.
On MoneyMamba the past few weeks were posts about:
Locavesting – A new trend in funding local small businesses.
Prescription Drug Prices – Drug prices are in decline as patents expire.
The Power of Looking Ahead – Why clarity is the best policy.
Monty Hall Problem – A classic case of mathematics made fun.
Small Retail Stores – How giants like Walmart, Best Buy, and Target reinvent store profiles.
Retirement Planning – Retirement planning is apparently so complicated that Wharton MBAs can’t figure it out.
Photo by: Lisa Brewster