I cringe every time I see surveys with results like this. In a survey conducted by the Consumer Federation of America and the Financial Planning Association, people were asked what was the most practical way to accumulate several hundred thousand dollars. While over half (55%) said saving a little each month over many years was the correct approach, 21% (that’s one out of every five people!) said the best way is through the lottery. Another 11% said that the best way was to inherit the money and 3% said getting a big insurance settlement was the way to accumulate the money
As might be expected, the poor chose the lottery method far above the wealthy. 38% of those with incomes under $25,000 chose the lottery as the best way to gain wealth while only 9% (that’s still one in 10) of those earning more than $75,000 said the lottery was the way to go. African Americans (30%) and those over the age of 65 (31%) also chose winning the lottery as the best method in higher numbers as opposed to saving each month.
It’s no wonder that so many people’s personal finances are in disarray when they feel the best chance of creating 6 figure wealth is through the lottery or means other than from their own work and saving. Considering the odds of winning the lottery are 18 to 120 times less than dieing from flesh eating bacteria, there are a lot of people fooling themselves. It also reflects on the poor job we are doing as a nation to educate people about personal finance.
A few other tidbits from the survey that made me cringe:
Only half of Americans understand the meaning of net worth and less than half know how much their net worth is.
Less than 10% of Americans believe they can save $1 million over a 30 year period.
The one positive result of all this? I don’t have to worry about the information from this journal or my main site becoming irrelevant any time soon…