Canadian Personal Finance Blog

My wife told me about a new episode of “‘Til Debt Do Us Part” which Gail Vaz-Oxlade hosts, where one of the spouse’s financial tactic to paying off their debt was to go to the Casino and try to make some extra cash (no she wasn’t working there, she was gambling). Other folks I know buy lottery tickets or are part of “groups” that buy lottery tickets weekly, hoping to hit it big so that they can retire.

Allow me to be clear on this one, neither of these “Financial Plans” are effective, nor are they prudent.  My personal opinion is that if you have reached a point in your life where you feel you must gamble to catch up on your financial obligations, you are in dire need of serious help from some kind of professional. 

The Gambling Recovery Plan

If the Canadian Government came up with a plan to take $2B and go to one of the larger Casinos in Las Vegas and attempt to double it using a “gambling system”, there would be an armed Coup D’Etat that night, however, if we hear of friends or family going to the Casino, how many of us stop them? Gambling your money on a hot stock tip, a game of no limit Texas Hold’em or a pyramid scheme is not the way to recover from a financial set back. 

It usually takes time to get yourself into a financial bind, and thus it is going to take time to get yourself out of the financial bind you are in. There are no quick fixes to financial problems, and if there are, usually you’ll be back in the same financial bind quickly, if there was a quick fix (i.e. windfall money appears which helps you out, but you don’t fix the root cause of the problem).

The only Gambling Recovery Plan I could think that might be a success is if, you are a gambler and you have been blowing your money at the Casino and you decide not to go to the Casino any more, that plan will succeed (as long as you don’t find somewhere else to squander your moneys).

The Lottery Retirement Plan

Having worked in the lottery business many years ago, there are three groups of people who make money on the lottery:

1. The person that runs the lottery makes the most money, hands down. Governments, however, have made it illegal to run your own lottery, so you can’t make money on lotteries this way.
2. Printing and distributing lottery tickets is a fairly profitable business (look at Canadian Bank Note, or British American Bank note’s financials in this area), but it is a very small percentage compared to how much the lottery commission makes on a Lottery.
3. Selling lottery tickets makes stores money, and they get to share in winnings of their customers too, but the sellers don’t make as much as the printers do

Note there is no mention on that list of BUYING lottery tickets as being a way to make money on lotteries.

I realize that most likely every reader of this article knows someone (a friend of a friend, or something like that), that Won the Big One in the lottery. That is what the Lottery Commission wants you to remember. What you don’t realize is most likely you know of someone who was bitten by a shark or hit by lightning (both more likely occurances than lottery winning). 

If you are spending money on Lottery tickets, figure out how much you are spending yearly, then multiply that by 20, and that is the money you’d have in hand (plus interest) if you didn’t buy the lottery tickets (or the Cigarettes, or the Coffee, etc., etc.,), keep that in mind the next time you want to buy an “Early Retirement” lottery ticket.

You want a winning bet? Put that money in an RRSP or an RESP, or give it to a Charity.