Skip to main content

Buying Lottery Tickets ISN'T Investing

It's fascinating (and annoying) that people want to get rich quick. The bad news is it's easy come and easy go. People do all sorts of crazy stuff trying to get rich quick. Back in 2022 while repairs after the Odette disaster were done, I wrote an article about not investing while having a gambling addiction. Some people may have pulled their money out of the index funds and played Axie Infinity trying to make a quick buck. Some people got into cryptocurrency with the same hopes of getting rich quick fast. Before cryptocurrencies and Axie Infinity, the lottery ticket was treated like a "golden ticket". When I mention "golden ticket", some people may have seen the classic Willie Wonka movie where each child had a golden ticket. Only one of the children could inherit the main character's candy factory. 

It makes me laugh (and cringe) that people waste their money on a lottery ticket. A wife can complain about her husband buying lottery tickets instead of spending the money on their needs, saying the Return On Investment (ROI) will be better. Calling buying lottery tickets an investment is a huge insult, even if it's not directed at my face. I recall fighting with a working scholar, who mentioned her sad situation. She didn't only waste my time. She gave her sob story, mentioning that her father would buy lottery tickets, hoping they would no longer be poor. I replied, "Isn't it any wonder your financial situation is like that?" I didn't have high financial literacy during that time. I didn't know I could invest in stocks via UITFS at that time. However, being raised by frugal parents (though they too had their own mistakes) gave me that important insight. As my frugal parents will say, "Don't rely on the lottery." It's because the lottery is a gamble. It's not investing at all! How many people win the lottery vs. those who lose it? It's like a raffle draw where you can't hope to win the car. You win the car, you win it. You don't win it, you don't win it! In short, it's a gamble or a game of chance.


As I learned about investing in stocks via UITFs (and take note, I never learned it in school), here's a quote from Peter Lynch. His advice is to never treat stocks as lottery tickets. Behind every stock is a company. A Jollibee stock is a piece of Jollibee, and Jollibee is a company. In those UITFs, there are multiple companies under them. My recent investments are with ATRAM's international stocks. The consumer trend fund focuses on companies feeding that sector. The technology fund focuses on companies feeding that sector. The ATRAM Global Equity Opportunity Fund invests in different companies in different sectors. The PSEi index funds invest in the 30 best companies on the Philippine Stock Exchange (PSE). 

True, some stocks do fail when the company fails to perform well. However, stocks from companies like Jollibee and Apple are bound to appreciate in value. One thing I learned about UITFs (and any seasoned investor beat me to that) is that investing in stocks won't get me rich overnight. Instant gratification is non-existent in buying a stock or investing through the UITFs. I could invest PHP 5,000.00 in Jollibee, and I have to wait. I may want to buy more Jollibee stocks when the value is lowered during certain seasons. I could buy into the PSEi with an index fund. I invested this amount toda,y but shouldn't expect to get rich quick tomorrow. Stocks aren't a gamble but a long-term investment. Some people even hold their stocks for five or even 10 years. 

The lottery offers instant gratification when one wins. What do most people do with the lottery win anyway? Most prefer to do "happy-happy" instead of investing the money. It's the same feeling when people win a gamble. People would gamble the wins from the gamble. Maybe, we should call it "re-gambling" the money because it's so addicting. It's the opposite of reinvesting when someone reinvests the money. I would reinvest the money market interests into a stock-based UITF. The interest coupons still have that addictive feeling. However, the addictive feeling isn't deadly compared to the instant gratification of lottery wins. 

That's why I don't buy lottery tickets. Lottery tickets should be treated like mahjong cards or playing cards. Nobody reall gets rich sustainably through gambling. It's because the shortest road often leads nowhere. 

Labels:

Popular posts from this blog

Venezuela as a Cautionary Tale on #SahodItaasPresyoIbaba, Nationalistic Pride, Welfare State Economics

The Sunday Guardian Years ago, I wrote about Venezuela's pride and protectionism , under a more "formal" style of writing compared to my latest posts. I decided to use an even "less formal" and "less academic" tone since I'm not writing a term paper. Instead, it's like how a professor and a student discuss the thesis using first person over third person, using contractions, etc., while the thesis doesn't use such tones. Back on track, I thought about the arrest of Venezuelan President Maduro can spark debate. Was it a violation of sovereignty? I'm no expert on international law. However, Venezuelans can be seen celebrating Maduro's arrest. Right now, I'm using Gemini AI and Google search to help me find some sources for this blog. It's because I don't want my blog to become another gossip central, but a place to discuss facts with my own personal opinions (making sure they don't  derail the facts).  I used Venezuela ...
Read more

Communist Vietnam's Great Leap Forward in Agricultural Production

I remember reading through Third World to First by the late Lee Kuan Yew. It's very easy to use the book to badmouth the Marcoses but not to learn from the rest of it. The book also talks about Vietnam and LKY's encounter with the late Nguyen Duy Cong aka Do Muoi. It's often said that Singapore only opened because of its lack of natural resources. On the contrary, Do Muoi decided to learn from Singapore how to turn the Communist Party of Vietnam into a powerhouse. Do Muoi, though a communist , was impressed by Singapore during his October 1993 state visit. Vietnam, unlike Singapore, is a country rich in natural resources. The third-world mentality said that MNCs are there to rape the resources .  A very huge misconception especially if you know Singapore's history Some Filipinos on social media even say that FDIs will destroy agriculture and nature. This is a meme by the Philippine Anti-Fascist League on Facebook. They say that FDIs equals environmental degradation. Yet...
Read more

Filipino Manufacturing's Golden Age ENDED Because of the Filipino First Policy

Here's a picture from the Dose of Disbelief Page on Facebook. Here's something that it wrote: Filipinos once trusted locally made products more than imports. Before World War II, the label "Made in the Philippines" carried prestige, not stigma, reflecting a strong sense of national confidence in domestic production. Local products such as shoes, cigars, textiles, furniture, and food were often preferred over imports. This preference was rooted in the belief that local goods were better adapted to local conditions, tastes, and were often of comparable, if not superior, quality. This period showcases a strong historical era of consumer nationalism and thriving local industries. We need to look into the context of Filipino history  If we look at the Philippine history timeline , we must account for 1935-1940, during which the Philippines was under the Commonwealth government. Independence was declared from Spain on June 12, 1898. However, there was a transition period w...
Read more

Sentimentalism Over Adobe Could've Killed My Finances

Why did I drop Adobe? It's because the subscription rate is rather ridiculous (read here ). That's why I'd recommend shifting to Affinity Photo for a one-time purchase (that's probably until a super new version comes out). I looked into this video, thinking about how Adobe was once my get-go. I remember recommending Adobe Photoshop to people--whenever I saw people using Microsoft Paint. Adobe Photoshop was the get-go. I often called it "MS Paint but much better."  Eventually, I Googled for "Adobe Photoshop substitutes" and discovered Affinity Photo . True, Affinity Photo can't do animated GIFs . However, one could still draw several frames and get some other program, or an online service to create animated GIFs. I tried Affinity Photo and got convinced that buying it at USD 25.30 (price may increase any time soon). Affinity Photo was learning all over again. However, it was worth relearning since I'm not a professional graphic artist. I just ...
Read more

Bo's Coffee Club Proves Filipino Businesses That Innovate Can and Will Survive Against Foreign Competition

All the cries that foreign investors will automatically crush the local industry are just false. The first proof is how Jollibee managed to prove itself against McDonald's first in the Philippines and now in the world. Now, it's time to feature Bo's Coffee Club. Although I'm not such a big fan of coffee clubs myself (since I prefer tea)--I think it would be time to talk about another creative entrepreneur known as Steve Benitez. Steve is the founder of Bo's Coffee Club way back in 1996 and it's still going strong today even when there are other alternatives such as the tea shops which are popping up left and right. Endeavor Philippines said this very positive thing about Steve himself as the founder of the famous local coffee shop: Fast forward to 2015, Bo’s Coffee sets itself apart by serving customers with authentic and unparalleled Filipino hospitality and is vying with international chains, such as Starbucks, and even some local copycats. Bo’s Coffee is in f...
Read more