Say you’re a happy-go-lucky person with $1,000 burning a hole in your pocket, and you decide to “invest” this money in lottery tickets, and keep on reinvesting the proceeds of your bets to buy even more lottery tickets. How long do you think you could keep this game rolling?
If you buy $1,000 worth of $1 lottery tickets on Day 1, then statistically speaking, the average lottery payout of 60% means you’ll have $600 left to spend on Day 2.
Spend that $600 on Day 2, and by Day 3, you’re down to $360.
Keep going, and by Day 14, you will have (on average) just $0.78 left jingling in your pocket.
In other words, two weeks of playing the lottery has left you too broke to afford a single lottery ticket. You’ve gambled away nearly every cent you started with.
It’s no wonder Bloomberg calls it the “Sucker Index.”