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States and Governments that run lotteries won't like this but here goes anyway.
How much do you bet on your state lottery each week? Let's assume you spend about $25 each week. Now granted, if you are lucky enough to win the million dollar prize, that's fantastic. However, the odds against you winning are astronomical. But if you invest that money each week in your favorite mutual fund earning an average annual rate of return of about 10%, look what happens.
* In 10 years, you would accumulate $22,191.
* In 20 years, you would accumulate $82,262.
* In 30 years, you would accumulate $244,879.
These are the amounts you could accumulate in the 10, 20 and 30 year time frames. And guess what - there's no gambling here. These amounts are mathematically guaranteed as long as you can average an annual rate of return of about 10%. Let's give the wheel a spin, shall we?
Next week we'll take a look at another purchasing decision, fingernail maintenance.
Until next time, Al Crisp, CPA
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