S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
TO PLAY OR NOT TO PLAY? Whenever lottery jackpots swell, a wave of interest seems to roll across the United States. It happened this month. After the numbers were drawn, someone in Oregon had won $1.3 billion.
Prizes like that make lotteries tempting – and there are plenty of lotteries selling tickets. In the United States, government-operated lotteries are active in 45 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The profits earned by lotteries:
“…benefit different programs in different jurisdictions. In many cases lottery profits are combined with tax and other revenues in a government's general fund. In other cases, lottery proceeds are dedicated to a wide range of causes, including education, economic development, the environment, programs for senior citizens and veterans, health care, sports facilities, capital construction projects, cultural activities, tax relief, and others,” reported the North American Association of State and Provincial Lotteries.
The odds of winning a lottery, typically, are astronomically low. In April, the odds of winning were 1 in 292 million, according to Khristopher Brooks of CBS News. Despite the poor odds, people spend an enormous amount of money on lottery tickets. In 2023, people in the U.S. spent more than $110 billion on lottery tickets. The Economist reported:
“In the poorest 1% of zip codes that have lottery retailers, the average American adult spends around $600 a year, or nearly 5% of their income, on tickets. That compares with just $150, or 0.15%, for those in the richest 1% of zip codes. In other words, the poorest households spend roughly 30 times more on lotteries than richer ones, as a share of income.”
If people saved and invested instead of spending on lottery tickets, they could have more to show for it. For example, 30-year-olds who save:
· $150 a year might have about $35,000 at full retirement age, if they earned 8 percent on average each year.
· $600 a year might have about $142,000, at full retirement age, if they earned 8 percent on average each year.
The bottom line is that saving and investing is more likely to help people reach their financial goals than buying lottery tickets is.
Weekly Focus – Think About It
“It isn't where you came from, its where you're going that counts.”
—Ella Fitzgerald, singer
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