Written by Felicia Gopaul
“What would you do if you won the Powerball?” my 10 year old asked.
What immediately sprang to mind was buying a home. Putting aside money for retirement. Putting more money into my kids’ college savings plans. Getting a daily massage, helping friends out and paying off debt.
Then I remembered. I don’t play the lottery. I have a 100% chance of not winning the lottery.
Winning the lottery seems so impossible that I don’t play.
However, I know some of you are thinking . . .
Someone has to win
The Powerball website says you have a 1 in 175 million chance of winning the lottery. To understand what that really means, statistician Ronald Wasserstein in an Huffington Post article said to think of it as laying dollar bills from end to end “from my house (Washington DC) . . . all the way south to Disney World in Orlando. Then we’ll still have enough to go clear across the country to Disneyland! But, even then, we are not out of dollar bills, so we can go north and make it all the way to Portland, Oregon. Still, we have dollar bills, enough to make it all the way east to Portland, Maine. And, fortunately, we’ll have enough to make it back to my house near DC, completing the loop twice. ”
To win the lottery in the example, you have to stop in the correct state, at the correct mile. If you’re only allowed 1 stop, and can only pick up one $1 bill, you need to be really lucky to win. Otherwise, someone else wins the lottery and you go back to work.
No luck necessary
The opposite of playing the lottery is investing. The Investopedia definition of investing is “spending money with the expectation that it will achieve a profit.” Parents around the world believe in the value of a college education. They have seen it open doors. Provide good paying jobs that put a house over their heads. And kept them solidly in the middle class.
If paying for college is in your future, here are three things to keep in mind about your investment.
- There is no perfect time to start investing in a college education. If you only have $50 a month to invest, start there. At the end of the year you’ll still have $600 plus interest more than if you hadn’t started.
- More consistent return on investment. An education pays off better than a lottery ticket. A recent Federal Reserve Board report found that a college graduate will make $ $830,000 more over their career than a high school graduate.
- Don’t stop. The type of students going to college today is changing. There are more first generation, minority and adult learners attending college than ever before. Even when faced with life’s challenges, keep taking classes until you get that degree.
While it’s fun to dream about what you would do if you won the lottery, you have a better opportunity for a positive return if you invest in a college education. Whether it’s you or your child is going to college, make the investment today.
Felicia Gopaul is a Certified Financial Planner professional and President of College Funding Resource. She helps families that are committed to going to college find ways to pay for it.