The maths are against you
The most obvious argument against trying to make money by simply winning it is that all gambling systems are mathematically rigged to make money for those who operate them. In one way or another they all function by relieving those who play them of their money, and that would be you.
How about you and a friend join forces in a simple wager against me. We randomly toss two coins and if both are heads then I give you £10, if both are tails then I give your friend £10. The third option is that one coin is heads and the other tails in which case you both pay me £10.
Seems fair? Except that the “third option” in fact represents two of the four possible outcomes: heads+heads, heads+tails, tails+heads, tails+tails. So already I have a 2:4 chance of winning whereas you and your friend only have a 1:4 chance each.
But, you and your friend have “between you” a 2:4 chance of winning, same as me, so it all evens out surely? No it doesn’t. Each time that either your or friend win I give one of you £10; each time I win you both give me £10, so money will flow towards me at twice the rate it flows away.
All gambling systems work on a variant of this principal, that statistically those operating the system will over time make money and those playing will lose.
Take a look at the UK National Lottery. The average jackpot payout (for correctly guessing 6 numbers out of 49) is about £2,000,000. The odds of winning the jackpot are easily calculated thus: (49/6)*(48/5)*(47/4)*(46/3)*(45/2)*(44/1) which is 1:13,983,816 (or about 1 in 14 million).
So if you bought 14 million lottery tickets at £1 each, you would be statistically likely to win £2 million. Not exactly a great return on investment. Even allowing for the probability of winning smaller prizes this is clearly a one-way system designed to impoverish those who play it.
Human nature is against you
So why do so many people do it? Human nature. We tend to focus on the possible outcome i.e. winning a lot of money and overlook the vanishing small likelihood of it actually occurring. We also play up the chance of a positive outcome and play down the chance of a negative one.
Numerous studies have shown that people will dismiss a 1 in 14 million possibility of, say succumbing to a nasty disease (“well, it might be a ghastly way to die, but its so rare it can’t possibly affect me”) but focus on an equally remote possibility of winning a lot of money (“heck, someone’s got to win it, it might be me!”).
There is also a tendency among people to perform inaccurate approximations. If I buy 1 lottery ticket my chances are 1:14,000,000 but if I buy 2 the odds drop to 2:14,000,000 which is the same as 1:7,000,000.
That’s twice as good! So 3 tickets should give me 1:3,500,000? No, you need to double the number of tickets you buy to achieve each halving of the odds, so you must purchase 4 tickets. To cut the odds in half again 8 tickets would be needed, bringing your chances of winning to 1:1,750,000.
In fact, to get yourself to even a 1:50 chance you would need to spend 2**18 pounds or somewhat more than a quarter of a million pounds. Would you place that much money on a 1:50 shot?
So where’s the sense in placing any money at all on vastly worse odds? It is, for all practical purposes, an absolutely guaranteed loss.
But most people duck out of the maths once they see that buying 2 tickets cuts the odds in half and simply extrapolate this observation to conclude that just a few more tickets should do the trick and bring the thing within their grasp.
Then there’s the effect of coincidences, magic numbers, near misses and other such baloney that a staggeringly large number of folk place much store on. The same number has been drawn three weeks in succession; over time more odd numbers have been drawn than even; half the time two of the numbers are separated by a gap of less than three.
It’s all nonsense. Anyone can analyse random data and find “patterns” in it. That’s the nature of randomness – it’s clumpy and often contains sequences of apparent order but these are no clue whatsoever to the future.
In fact apparent patterns in random information often form the basis for many of the wilder conspiracy theories that abound. You can always find interesting “connections” between otherwise unconnected events or facts, and so long as you are careful to select only those that support whatever your pet theory happens to be, you can “prove” almost anything you like.
Near misses are another favorite of the human psyche. “I put it all on 23 but 24 came up, I was so close.” No you weren’t! A miss is a miss. Being one away is no better (or worse) than being twenty away.
Its harder work than you think
The only forms of gambling that do not require you to somehow outrun mathematics and that may therefore work in your favor are those where an element of superior knowledge and/or skill are involved.
It is possible to make money betting on horse racing for example. The advantage the bookmakers have is a superior (to most of their punters) understanding of form and control over the odds. But there have been many instances where individuals who have devoted years of intensive study have managed to develop even greater understanding of form and have consistently won.
At least until the bookmakers started to decline their bets.
Another form of gambling that you might stand a chance of turning to your advantage is Poker (and other forms of card game where individuals pit themselves against other each other using skill, nerve and psychology to outwit their opponents).
An analogy I like here is that lotteries and other large scale gambling operations are akin to supermarkets offering prepacked chicken in shrink-wrap. The reality of what you are engaging in (be it butchering chickens or hoping to “win” money from thousands of others who can ill afford their losses) is deliberately hidden from you.
Whereas playing Poker is more like having to physically kill, pluck and cut up the chicken yourself. You are confronted with the fact that in order to win you must personally slaughter and rob those sat opposite you using your own abilities and effort.
At least it’s honest, even if it’s not pretty.
Its intrinsically unhealthy
Anyway, enough of the inescapable fact that the maths are overwhelmingly against you; a better argument against seeking wealth by simply winning it lies in the corrosive effect this has on your outlook on life and your real chances of actually acquiring that which you seek.
It tells your subconscious that there’s no point in trying to attain wealth by expending any effort, or to properly address your financial position, because sometime soon your luck will kick in and sort everything out for you.
Not only is this not going to happen, but carrying around that lottery ticket or bookie’s slip is like having an inner voice quietly but insistently telling you that because you might, just might, win then you can avoid the reality of your situation. Why even think about investing the effort and risk necessary to create a successful business when you might win a million this weekend?
Only when you and your subconscious fully accept that wealth will come your way only as a result of you doing something about it, will you become capable of creating that wealth.
Still dreaming of that big win? Well dream on, ‘cos that’s all it is. A dream.
You might actually win
My favorite argument against trying to make money by “winning” it is that it will in all likelihood ruin your life if it actually happens.
I’m quite sure you think you could easily get used to swanning about on your luxury cruiser in some sun-kissed marina but the truth is, unless you have “earned” that status you will feel out of place and awkward and entertain paranoid suspicions that the other rich people regard you with contempt. Only its not paranoia – they do. You don’t understand how this new world works; you didn’t pay your dues; you don’t belong.
Equally you no longer belong in your old world, where in spite of all your best intentions, you simply aren’t the same old someone that they knew. You will find yourself beginning to harbor perfectly reasonable suspicions that even old friends seem somehow more interested in your money than you. Eventually you will come to realise that, actually, yes they are. Human nature again.
Your new found wealth has altered your social status which has altered how others regard you as a person. They can’t help it. It’s a phenomenon well documented by rock stars and the like. The same smelly, inarticulate losers that absolutely no-one would date a year ago suddenly find themselves apparently irresistible once the band has some success.
You might think you haven’t changed, but how other people regard you really does change how you yourself behave and feel, and in a real sense who in fact you are.
Find that hard to accept? Try putting on a police uniform and see how it affects both other people’s behavior towards you and your attitude to them. Alternatively, if you already happen to be a police officer, then try directing traffic wearing jeans and a tee shirt and see where that gets you.
It’s no use saying “but I’m still the same person, its still just little old me”. Not to everyone else you’re not – to them you are what your accoutrements say about you. It doesn’t matter whether this is accurate or fair, it’s a simple fact; your place in this world is to a large extent determined by what other people consider your place to be. Clothes, wealth, looks, the company you keep – such are the measures humans have used to assess each other since the dawn of time.
But back to the point, and as it happens, I have personal experience of unexpectedly acquiring significant wealth (through an inheritance rather than a bet, but the net effect is the same). The amount of money I was suddenly handed was seriously life-changing and it caused nothing but anxiety, guilt and confusion until I eventually decided to simply spend it.
I thoroughly enjoyed hosing it all away and felt a whole lot better when it was finally gone. It’s not an attitude by the way that I have towards money I have “earned”, but I have found it to be an effective means of combating the toxic effects any windfall can induce.
Most people think they could easily handle sudden wealth.
Most people are hopelessly wrong.
Because only a tiny handful of people ever do win, most never discover for themselves that you can collect your winnings but you can never actually win in any true sense. Wealth and well being have nothing to do with each other.
Now I know what you’re thinking here. You’re thinking “here we go; the old Money Can’t Buy Happiness line”.
The old “Money Can’t Buy Happiness” line
Spot on. But, there’s an excellent reason that aphorism is so well worn. It’s the absolute, unchanging truth.
Don’t get me wrong. I don’t think there’s anything at all wrong with acquiring wealth. For the record, I am not now, nor ever have been, even remotely poor. I have started many ventures, some successful, some not, many scarcely worth recalling, so I know something about making money.
Creating wealth is, like creating anything, innately satisfying. It will certainly provide comfort and security. But don’t ask it to make you happy or fix your life for you.
The correlation (or lack thereof) between wealth and well being has actually been the subject of academic study for many years. The “Easterlin Paradox” named after the economist Richard Easterlin established that once basic needs are met, additional wealth has absolutely no effect on happiness.
You can read an interview with Professor Easterlin if you’re interested. He seems a pleasant and engaging kind of guy, and is of course very happy!
But I rather doubt you’re at all convinced by any of this. Like, well frankly everyone, you think “but I’m different”. But you’re not. You’re here, reading this, just like everyone else who comes here, in search of clues for a better life. So how come they’re all the same but you’re different?
I could bore you at length with stories of people I know well whose lives are filled with misery, sadness and gnawing self-loathing against a backdrop of breathtaking opulence.
That’s before I start on all the people I don’t know at all but whose cheerless lives bear ample public testimony. Ever seen a picture of Heather Mills (formerly Lady McCartney) looking content and at one with herself and the world? She seems to believe that being handed even more money will solve her woes. Hasn’t worked so far though, has it?
I should point out in fairness, that I also know very wealthy people who are perfectly happy and lead fulfilling lives, just as I know folk who struggle for money and feel wretched most of the time. My point is simply that the two things are not linked and that you are not, whatever you may think, about to demonstrate some rare exception to the rule.
Still think there might be a “system” out there that can give you that vital edge? Read this advice regarding gambling systems.
The only way to win money is to make the maths work for you and the only way to do that is to devise or control the game. And that isn’t gambling; it’s running a gambling business. Crucial difference.
Trying to win money is for fools who dream their lives away. Nothing wrong with having dreams of course, otherwise, like the song says, how you gonna have a dream come true? But to make anything come true you have to do more than dream.
Hoping to win wealth is but one of several well established fool’s errands just looking for another fool. Check out others to avoid with How NOT to Make Money, Online or Anywhere Else.