Dave Ramsey explains why big lottery wins often hurt rather than help
Many states have some kind of Powerball-style lottery with multi-million-dollar payouts like the $590 million ticket sold Saturday in Zephyrhills, Fla.
This is pretty ridiculous, folks.
The other day I went into the gas station and saw a line of people. For a moment I thought I was going to have to stand in line to pay for my gas, but then I realized the line was for buying lottery tickets!
Have you ever seen those lines? Next time you do, look at the people in the line. They look like Darryl and his other brother Darryl, the rubes from the ’80s sitcom, “Newhart.” These are not rich people. These are not smart people. Rich, smart people would be in the line if the lottery was a real wealth-building tool, but the truth is that the lottery is a rip-off instituted by our government.
“But Dave, our state says the money is going to scholarships,” proponents say. That may be partially true, but guess who’s getting the scholarships statistically? Kids in middle-class and upper-class ZIP codes—so poor people are sending middle class kids to school. How stupid is that?
“But Dave, someone has to win!” Did you know the divorce rate among big-ticket lottery winners is four-fold the national average? Also, 65 percent of lottery winners are bankrupt within 15 years. Scary, isn’t it? I sure don’t want that, and I bet you don’t either.
What it really is
Gambling is a tax on the poor and people who can’t do math. Don’t get mad at me for saying that. This is not a moral position; it is a mathematical, statistical fact. Studies show that the ZIP codes that spend four times what anyone else does on lottery tickets are those in lower-income parts of town.
Addictions like this suck the money and soul right out of anyone tangled up in the mess, whether or not they realize it. These are real people, just like you. These people are your neighbors, co-workers, family members—maybe even you. Our team of financial advisors doesn’t treat gambling addicts, but we try to help their families survive in the wake of their disaster.
A lady at a book signing I did recently told me her story with tears in her eyes. You see, her husband was an addicted gambler. She lost her home, her cars and everything else, because instead of getting a job and working, her husband thought he was going to get easy money. He fell into a trap.
The lottery, or gambling of any kind, offers false hope—not a ticket out.
Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.