In today's (July 16,2006) Greeley Tribune, there ran an article under the Motley Fool's masthead titled "Putting lottery odds in perspective."
At the end of the article, the author discusses a survey that showed that in a certain low income Chicago neighborhood people spent an average of three dollars a day on the lottery. The author pointed out that if those people were to take that three dollars a day and invest it in the stock market, in 25 years they would have $100,000.
This struck me as incredibly unrealistic. First, where is the stock broker where someone can walk in after a day on a construction site and say "I've got three dollars, put it on Microsoft?"
Second, I don't think it is realistic to think of the three dollars as money that would have been saved if it hadn't been spent on the lottery. I think closer to the truth is "I could have bought a six of Sam Adams, but I bought a six of Bud and three lottery tickets instead."
Even if they get to Friday with their $21 that they haven't spent on the lottery, they are not going to give a to stock broker (who still won't take that measly sum) in the hope that in 25 years they might have $100,000. (if someone like Ken Lay doesn't defraud them out of it between now and then) No, their going to take their 21 bucks and go to Appleby's and have a nice dinner instead of McDonald's again.
I don't think your advice has any meaning for the people who are spending three dollars a day on lottery tickets, because the stock market is not a realistic option.
----I wonder if I'll get a reply
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