For years, we never played the lottery. My parents didn’t play, my wife didn’t play, and I didn’t play. I considered it (and still consider it in a way) a waste of money. However, lately, we have played the lottery on several occasions.
While we’re not habitual lottery participants, typically only playing the Mega Millions when there is a large jackpot, we’ve found that there are certain peripheral benefits that surround playing the lottery.
It only takes a dollar to have a chance of winning big in the lottery, and if we have a buck to spare, we figure, why not? The benefits far exceed the financial downsides. Plus, its fun to dream of what we might do with that money should we win. But there is more to playing the lottery than just the dreams the process invokes. And part of the process of playing can help us with the planning of our financial future.
A focus on financial planning
Maybe the most valuable aspect of playing the lottery – even when we don’t win – is the opportunity it provides for financial planning. Considering what we’d do with a million, ten million, a hundred million dollars or more is a good exercise in financial planning. Deciding how that money would be divvied up between debt reduction, savings, real estate, investments, and more can indicate where and how money should be allocated on a smaller scale. It can also help determine risk tolerance as well as how you would diversify savings.
The same process might be conducted with a windfall such as an inheritance, work-related bonus, tax return, or even just a regular paycheck. And conducting this mental process ahead of time can have you better prepared if or when the time comes.
Dreaming can lead to a finer focus on goals
And even if playing the lottery leads to nothing more than a few crushed dreams, those dreams can be valuable indicators of future financial goals. Buying a beach home or living in the Caribbean could be indicators of future retirement living locations. A desire to travel and see the world could pinpoint a focus for retirement activities. The dream of quitting a job immediately might indicate unhappiness with a current role, leading to thoughts of a career change, entrepreneurship or a bigger push toward early retirement. The desire to donate to certain organizations and causes or to help friends and family members in need might indicate a greater need for charitable giving.
So before you write off playing the lottery as a fool’s errand, you might instead want to consider that it could be one of the most affordable (conducted in a responsible manner of course) financial planners out there and a great way to organize your financial life both now and for the future.
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The author is not a licensed financial professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.