Save up to 50% on life insurance.

Buying Lottery Tickets and Going to the Casino?

In the early days, I wrote a lot of scolding pieces about spending money foolishly. I cringe reading some of these, but here is something I am still reasonably passionate about. Risk and gambling may be part of financial planning in a small way, but Casinos and buying lottery tickets should not. I wrote this back in 2008.

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 tactics 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” buying 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 Plansare efficacious, nor are they prudent.  My 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 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. 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 setback.

It usually takes time to get yourself into a financial bind, and thus it will take time to get yourself out of the financial hole 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 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. You decide not to go to the Casino anymore, that plan will succeed (as long as you don’t find somewhere else to squander your money).

The Buying Lottery Tickets 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 readers of this article know 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. You don’t realize that you most likely know of someone who was bitten by a shark or hit by lightning (both more likely occurrences than lottery winning).

If you are spending money on Lottery tickets, figure out how much you are paying yearly. Multiply that amount 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.

Do you want a winning bet? Put that money in an RRSP or an RESP, or give it to a Charity, not buying lottery tickets.


Sunday Thoughts: Lent almost over

With Lent coming to a close on Good Friday, how has your Lenten Financial vows gone? My attempts at sticking with a Lenten financial regimen has not been a wild success, but it still continues on. There are days when I don’t live up to my hopes, but then there are days when I succeed as well, and I will remember the successes, and attempt not to have as many failures.

  • My attempts at controlling my spending at work has not been a raging success, but I blame that on the “Roll up the Rim” contest from Tim Horton’s (although I have won a few free coffees too).
  • Stopping procrastination is hard, in all parts of your life, not just money.

I have managed to get my taxes done, which was needed and with that, I may do another set of articles about why Income Splitting would make a lot of sense for single income families (and now with the new RESP proposal maybe we can income split with our kids too?).  Since the Conservatives will most likely kill this bill, I don’t think it’s going to be a big concern, but who knows?

Enjoy the Lenten season while it lasts, but remember Easter is very soon too.

Happy 18th Birthday to my beautiful eldest daughter. I may not be in town to help you celebrate, but you are in my heart always.


Random Thoughts

A special Friday this week, given it is February 29th, the bissextile day, an extra day for our year, so enjoy this extra day. Have a Leap today!

  • With this extra day you have today to finish up your 2007 RRSP purchases if you wish.  Given how down the markets have been, you might find some deals (or you might be buying tainted meat too, I can’t tell).
  • Tomorrow is Saint David’s Day (the patron Saint of Wales). Buy a leek and watch a Rugby game.
  • You are supposed to have received all of your relative tax forms by now as well (T-4’s and such) so you can now do your taxes. My employer waits until the very last day before sending my tax forms out.
  • The Federal Budget passed a confidence motion yesterday, so TFSA‘s are a step closer to coming into laws.
  • CIBC took a massive write down from the Low Rate Mortgage scandal in the U.S., which means their stock is tanking even further. TD on the other hand announced a tidy profit and an increase in their dividends. A tale of two Banks?
  • I am attempting to get back on the horse and STOP spending money at work again, due to another announcement this week.
  • I continue to fill in my net income on financial aid questionnaire’s for various universities, which makes me wonder, what do THEY do with all this information? Once they tell me, “You are too stinking rich to deserve financial aid”, do they simply shred my information? I really hope so, because they ask some very SPECIFIC questions (values on specific lines of my tax forms).

Have some mushy peas and maybe some leek soup and enjoy your Saint David’s weekend.


Guilty as Charged: Fifteen Free Coffees

So, for my more regular readers (all six of you), you have read my tirades about saving money by not spending it on the little things that fritter your money away, like buying Coffee (especially if your employer is supplying free coffee to you), well you can officially call me “Mr. Pot” to all you Kettles out there.

I figured out that I have had over 15 free coffees in the latest chapter of Tim Horton’s “Roll up the Rim to Win” contest (a couple of free donuts as well). On the surface that sounds pretty darn good, and it is much better than I normally do (usually win 3 or 4 cups over the 2 months). However, if I look a little closer at the 3 cups of coffee a day I was buying and then the 7 or 8 each weekend (usually bought because I was going to be in a drafty and cold gymnasium), I think I have blown over $300 on coffee over that two month period. Sigh! I’m an idiot.

Yup, me who complains and laments about how the government hates me, and I never have enough money to do things like fixing my roof (that is the next financial story to be told in the coming weeks) had enough disposable income to blow $300 on coffee? Um, no I didn’t, but I did it any way.

“Hello, my name is Big Cajun Man, and I am a Tim Horton’s coffee addict”

Easter is for new beginnings, time to control this out of control spending! I’ll keep you posted on whether I can stop this out of control coffee buying (I think I’ll drink the free stuff at work, that should cut down on my intake, as this stuff takes putrid!).

{ 1 comment }

Buyer Beware: Read the fine print (rolling up the rim)

If you are a red-blooded, coffee swilling Canadian (like most of us are), and you haven’t bought Tim Horton’s stock yet (see the Canadian Capitalist for his overview on that, he has some good stuff on it), READ closely the Roll Up The Rim “fine print”.

All the following data is available at the Tim Horton’s web site (click on this link):

So I am in Region 5 (Eastern Ontario), this is useful to know, since I don’t plan to be traveling too much during this contest. So in Region 5, if I want to win the car (which of course is the logical choice of things I want to win), what are my chances?

Well there will be 1 Cup of size Medium that will win a car, 1 Cup of Large size and 0 (ZERO) of size XL that will win. Pardon? So if I buy an XL coffee the way I do most mornings, my chances of winning the car is ZERO? Oh, ok, so I won’t be buying an XL coffee until this contest is over, because I can’t win the car!

Now, if you read the statistical weasel words, this is the APPROXIMATE distribution likely of winning cups for the car, so I guess it is possible to win the car with an XL cup in Ottawa, but my suspicions are, it is INCREDIBLY unlikely (as opposed to if I buy a Large coffee, where the chances are VERY unlikely).

What does this have to do with financial planning and such? Not much, but if you want to WIN at a game, it’s always important to know ALL the rules (in life, and in financial planning too).

I’ll have a large with double cream please.


%d bloggers like this: