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I’ve often wondered when the cognitive dissonance between belief in the promise of achievable prosperity, and the reality of a vanishingly small chance of achie
by phs318u 9y ago
I’ve often wondered when the cognitive dissonance between belief in the promise of achievable prosperity, and the reality of a vanishingly small chance of achieving it, would become too much to bear for an armed and increasingly dispossessed populace.
- jamestimmins 9y agoBrings to mind psychohistory from the Foundation series. To what degree could you develop an equation for a population's willingness to bear certain circumstances, and from that draw conclusions about when that threshold may be passed.
- WalterBright 9y agoWith a hundred bucks anyone can start an investment program in stocks. In contrast, I saw on the news the other day that the average lottery ticket "investor" puts in $250/yr, and lottery investors skew heavily towards lower income people. $100 in the S&P 500 last January would be worth $120 today. And low income people are pretty much exempt from capital gains taxes. The democratization of the ability to invest in companies like Microsoft and Amazon is one of the great opportunities that exist in America today.
- manicdee 9y agoHow do stock market gains compare to lottery gains?
- WalterBright 9y agoStatistically, stocks return maybe positive 6-7% on average, while lottery tickets are negative 50%.
- rdlecler1 9y agoAnd given that these people are willing to invest in lottery tickets, what's the odds that they'll make good stock market investors?
- WalterBright 9y agoGiven that monkeys randomly throwing darts seem to do better than professionals, I'd say the odds are very good they'll do better than the lottery. The ROI (Return On Investment) for lottery tickets is negative 53%. https://www.theawl.com/2012/02/how-much-can-you-expect-as-a-return-on-that-2-powerball-ticket/ https://www.theawl.com/2012/02/how-much-can-you-expect-as-a-...
- itronitron 9y agolottery tickets are purchased for entertainment purposes, not as an investment vehicle.
- WalterBright 9y agoStock investing can be very entertaining - there's news on it all day every business day. And the returns are +7%, not -50%. Personally, I find negative 50% returns about as entertaining as having my teeth drilled. And the median return is about -100%.
- throwaway010718 9y agoYou missed the point that 20% return on $100 won't change a person's life but a lottery jackpot will. I find it odd that when a wealthy person hits the jackpot on a speculative trade or alt-coin I can't help but feel they were clever. Perhaps it is because buying and holding takes discipline whereas no discipline is required to buy a lottery ticket.
- WalterBright 9y agoInvesting regularly will change your life, and the odds are in your favor. You're probably more likely to have a jetliner fall out of the sky on your head than win the lottery. But hey, do what you like. Feel free to "invest" in the lottery. Don't forget that you won't get any tax breaks on the jackpot if you win it, either.
- idrios 9y agoHe's not saying it's financially better to play the lottery than to invest in stocks. I interpreted it more as 'poor people play the lottery because it gives them hope that things will change'. A lottery ticket is more of an emotional choice because when you buy one, you get to imagine yourself in a life where you win. Meanwhile, investing $250 in stocks once a year won't do much to change that person's life. Even if the total value of those stocks double in value in 10 years, that's 10 years of the person's life gone and they've managed to save only $5,000. That's pretty grim
- WalterBright 9y ago$5000 is about $7500 ahead of losing $2500 in the lottery. At $15/hr wages, that puts you 500 hours of your life ahead.