WASHINGTON — The likelihood of winning the lottery is so astronomically low that it's preposterous to even play.
And yet, as the jackpot for the Mega Millions hit an incredible $1.6 billion, out came the dreams of a payday that will solve everything. You no longer would have to worry about paying your mortgage or saving for retirement or squirreling away money to send your children to college.
But can I do some dream killing? Here's why fantasizing about hitting the lottery isn't good for you.
• It makes you think instant cash will solve all your problems.
What I dislike most about lotteries is how they sell outlandish dreams to people who can least afford them. And I'm not just talking about low-income individuals who could use the money in better ways.
The lottery is all about imagining that you will win big so you can be happier with your life.
You do need money to live, but the source of your unhappiness isn't just a shortage of funds. For example, in my experience, many couples think they're fighting about money or the lack of it. But the unconscious source of their arguments often stems from issues in their childhoods.
Maybe you grew up poor, so now you're a spendthrift because you never want to be without again. But your spending frustrates your frugal spouse, so you think winning the lottery will fix the issue. It won't. Even with more clothes, you'll still be unhappy, because there's a hole in your soul no closet full of garments can fill.
• It sells a shortcut to growing your money.
Spend a couple of dollars for a winning lottery ticket and you don't have to figure out how to be a good investor.
You've probably heard or read advice from experts on what to do if you come into a substantial lottery payout. One public-relations person tried to pitch to me an interview with a wealth manager who supposedly could talk about "how to avoid the potholes that easy street is paved with for lottery winning and how to protect your lottery winnings from inflation and volatile markets."
The winner of a billion-dollar lottery will never have to worry about inflation in his or her lifetime — even after taxes, and even allowing for major purchases and lavish living. The power of mere hundreds of millions of dollars just sitting in a simple bank account will afford you a life of royalty and cover even a catastrophic illness.
You, on the other hand, need to be very concerned about inflation. I've found many people don't even understand what inflation is or how it impacts their buying power in the future. Back here in reality, you have to invest in a way to at least keep pace with inflation.
If you aren't spending the time it takes to learn how to manage the money you do have a chance of earning, you won't have enough financial resources to live well in retirement.
__•_ When you lose, you console yourself by believing all big lottery winners will end up worse off than you in the long run._
Yes, some lottery winners squander their winnings in spectacular fashion, but not as many as you might think. A working paper out of the National Bureau of Economic Research surveyed a large sample of lottery players in Sweden.
Researchers said they "found little evidence in support of the hypothesis that winners often consume frivolously following a win. Large-prize winners appear to enjoy sustained improvement in economic conditions that are robustly detectable for well over a decade after the windfall."
In fact, the National Endowment for Financial Education, or NEFE, issued a release earlier this year disputing that it's the source of an often-quoted statistic that 70 percent of lottery winners end up bankrupt just a few years after receiving their windfall.
"This statistic is not backed by research from NEFE, nor can it be confirmed by the organization," NEFE said.
The reality is you're more likely to waste the increases in your income over the years. Many working adults are living on the edge and unable to cover a $400 financial emergency, according to a recent study funded by NEFE.
Financial fragility is linked not just to having too few assets but also to having too much debt and low levels of financial literacy, the report said. And no demographic group escapes this tenuous situation. It "affects all ages, income levels, genders and education levels," the report said.
We like to say it doesn't cost you to dream. But it does if your fantasizing about instant wealth robs you of a realistic plan to create financial stability for yourself and your family.