save or invest

Buying lottery tickets was a bad habit that I used to indulge in. I was in the habit of buying $1 and $5 scratch-off tickets. Reflecting on that time, I have no idea how much money I wasted. It might have been a few hundred. One day, I won about $35. To celebrate, I bought a bunch of old-school kung fu action films on VHS. It was the late 1990s, OK. So, VHS was still a thing.

Still, I think back on it, and I think about how it was such a waste. (How much would that money be worth with inflation? Yikes.) It was a waste buying lottery tickets. My only return after spending so much was $35. Then, I ignorantly wasted those meager winnings as well. I should have saved that money. I don’t just think that playing the lottery is a sucker’s bet.

It’s more about divine futility. The odds are against you. For example, the Mega Millions jackpot was once $654 million. The odds of winning are about 175 million-to-one. Sadly, about a third of Americans think that winning the lottery is the only good odds they have to retire comfortably. The odds of dying in a plane crash is 25 million-to-one. Your chances of dying from a fall out of bed, or of being struck and killed by lightning, is 2 million-to-one.

Scared of being killed by flesh-eating bacteria? Your odds of enduring such a death is 1 million-to-one. The odds of being mauled to death by a dog is 700,000-to-one. Playing with money is such an odds game that you may be better off saving it. Investing is an essential method of increasing your financial worth. But unless you perfect the art of long-term, strategic financial thinking, then you are just playing the lottery.

Hot Stock Tips and Miss-The-Boat-itis

Do you have $1,000 that you want to invest? Are you abreast of the all the latest hot stock and investment tips from the cable news talking heads? Or, are you terrified of missing the boat on the latest cultural hype and craze, like the cryptocurrency fad of a few years ago? If you answered yes to any of those questions, then you probably shouldn’t be investing.

Douglas A. Boneparth is the president of Bona Fide Wealth, which is a New York City-headquartered financial firm. CNBC recently reported on a tweet Boneparth made about inexperienced investors. Boneparth tweeted that during speaking engagements people, especially young people, are prone to ask him for advice or tips on how to invest $1,000.

In Boneparth’s opinion, investing is a singular act created from diligent research, patient strategizing and understanding that a return takes time. So, for Boneparth, when it a person asks him for investing advice, it’s a clear sign to the financial expert that they are not ready to invest. To Boneparth, such people are speculating, or, essentially playing the lottery.

“Anyone with a clear understanding of goals and mastery of cash flows would know exactly what to do with $1,000,” said Boneparth in the tweet. “The amount is telling and further indicates where you are in the scheme of things. Why bother to speculate with $1,000? A hot stock pick shows me you are not thinking long term. Nothing reveals you are not ready to invest like asking for stock picks,” added Boneparth.

Save Money, Learn to Invest

Boneparth recommends saving $1,000 in a high-yield interest bank account. Let your money grow while you learn more about investing. This may be the best advice you can take if you want to invest. Learning how to invest takes time. Investing for its own sake, or to not miss out on hype, is called speculation. You can buy a lottery ticket for that.

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