State/National lotteries have been described as taxes on fools. Most involve trying to pick a subset of numbers from a much larger master set with ludicrously long odds against success (In the UK game of trying to pick 6 from 49 the odds of winning are something like 14 million to one!) Week upon week we try, week upon week we fail; yet we keep coming back for more. Why?

Despite its ability to create millionaires overnight, the lottery is a terrible investment. If you’re playing the probability game (and as a rational investor you ought to be) you’re much better off sticking your cash into real estate, stocks, bonds, savings accounts or even keeping it in a tin box under the bed. The chance of winning is just too small.

But playing the lottery isn’t about investment, probabilities or rationality – it’s about buying a dream. Don’t risk your shirt on the lottery, but spare a dollar or two each week and from the moment you get your ticket ’til the moment the draw is made (or when you check the result) you have that tiny hope that it might be your turn to win a life-changing sum; after all someone’s gotta win it. That’s gotta be worth a couple of dollars.

Most state/national lotteries donate a significant portion of their proceeds to various good causes. If you have a choice of which lottery to play, choose one that benefits charity rather than the pockets of the operator. If you still have more than one choice, select the one that benefits causes closest to your heart. At least that way, win or lose, you’ll get a nice warm feeling knowing you’ve done a little good.

Given the numbers are chosen at random you might be surprised to learn that not all numbers are equally good choices. This is because in the event of more than one person getting the winning combination the prize fund is shared. Many people pick numbers based on family birthdays, so the more numbers you have above 31 the better. It’s also best to avoid your culture’s traditionally lucky numbers, eg 7, and to go for numbers generally considered unlucky, eg 13. These tips won’t improve your odds of winning, but if you should strike it lucky your payout should bigger.

Finally, the age-old question of whether to stick to the same numbers or choose different ones every week. In terms of probability it makes no difference. Every entry in every game starts with exactly the same odds of success. But if you’re just starting out, you might be wise to avoid sticking to the same numbers for two reasons. First, playing the lottery becomes obsessional – you get scared to miss a week; and second if you did miss, and if your numbers did come up, you might never get over the disappointment.

Good Luck!

Johnny Finnis is editor of personalmoneymanagement101.com, a simple and unbiased introduction to finance and investment for ordinary people to make the most of their money. Have your say on our blog

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