This is why probability needs to be taught, and taught properly. This line of logic clearly demonstrates the problem.
Your expected return from not playing a $5 ticket is exactly $0.00.
Your expected return from playing a $5 ticket is approximately $-4.99
“Gaining Zero” is vastly preferable to “Losing Five”.
If you can occasionally afford a $5 ticket, you can occasionally afford to buy shares of an index fund. You’re still gambling, but your expected return is positive.
This is why probability needs to be taught, and taught properly. This line of logic clearly demonstrates the problem.
Your expected return from not playing a $5 ticket is exactly $0.00.
Your expected return from playing a $5 ticket is approximately $-4.99
“Gaining Zero” is vastly preferable to “Losing Five”.
If you can occasionally afford a $5 ticket, you can occasionally afford to buy shares of an index fund. You’re still gambling, but your expected return is positive.
I realize that, academically.
I feel that what I am buying with a lottery ticket is a few days of allowing myself to imagine what my life might be like if I win.
And I invest vastly more of my money than I buy in lottery tickets.