Bullet Proof Investing - How to Get Rich, Eventually

by Harvey "M" Stwartkeimer
Financial Advisor, a volunteer at the League for the Short of Money.

30/Jun/2006

Though recently bankrupt myself, I, Professor Harvey "M" Stwartkeimer have given a great deal of thought to reversing my situation.

The importance of compiling and publishing a list of fairly commonly used investments that can cause either ThinnItis (Thin Wallet) and/or Money loss is self-evident.

Usually, these problems are reversible; that is, the Money loss is corrected when the investment is discontinued. But there are still infrequent times when this change can be permanent. If someone is experiencing a Money problem or if there is a Money disorder in the family, it is imperative the Financial Advisor be aware of this fact. If a person has bought into one of the investments found on this list, (s)he should speak to the Financial Advisor to see if another, potentially less foolish investment could be used in its place.

This information is very important to a Financial Advisor. Armed with it, (s)he may then be able to promote an investment that would have a potentially less mitigating effect on money. The likelihood of having a problem with money from the use of one of these investments is usually extremely small. The investments with the greatest potential to cause a money loss are usually used only in life-threatening situations.

Remember, the Financial Advisor is the person best qualified to determine which investment is best for you. It is important that (s)he be aware of not only any real or potential problems concerning money, but also of any other conditions which may be present that would influence the selection of investment.

Investments That Can Cause Money Loss

• Mutual Funds
• GIC's
• Saving's Accounts
• Real Estate
• Gold
• Stocks
• Bonds

The loss of money with the above investments appear to be closely related to the amount of money invested and are almost always reversible once these investments are discontinued.

The best investments are lottery tickets. Yes, it is true buyers of lottery tickets don't always win. But the one's that do will often find they have won enough to buy another lottery ticket investment. An investment approach can be used to buy a fixed dollar amount of the same lottery ticket on a regular schedule over a long time span. This will reduce the average cost per ticket because some winning tickets can be used to purchase the next batch.

In Ontario, lottery tickets are produced by the OLG (Ontario Lottery and Gaming Corporation), a Crown Agency, created by the Government of Ontario. The Government of Ontario is currently run by a group of people who really care about Ontarians. We can trust them if they tell us about all of the wonderful things that can happen to us if we buy their tickets.

One thing that may puzzle the new lottery ticket investor is the disclaimer on the OLG website which says, "(OLG) products are designed for the entertainment of adults in the Province of Ontario, Canada." It seems unlikely anyone would buy lottery tickets for entertainment purposes.

I have designed an experiment to test the theory that people buy lottery tickets for entertainemt purposes. You need a table, a chair, a pile of blank pieces of paper and a garbage can. Go to some place like a hospital or a nursing home where you see someone selling instant lottery tickets. Except for the lottery tickets they are selling they will have exactly the same equipment as you; a chair, a table and a garbage can.

Next Step: Set up your table, chair and garbage can and put up a sign which says, "Blank Tickets for Sale - Entertainment Purposes Only." If after several hours of experimentation your garbage can has nothing in it while the lottery seller's can just get's fuller and fuller you will have shown that consumers are really not entertained at all by the act of buying pieces of paper just to throw them into a trash container.

No, the real reason people buy lottery tickets is as an investment.

One good investment is the "Cash for Life" instant lottery ticket. According to the OLG website, The Cash for Life Lottery has, in addition to the $1000 a week for life jackpot, "Lots of additional cash prizes, including $50,000, $25,000 and $10,000."

All the successful lottery ticket investor needs to do is win the jackpot or one of these additional cash prizes, of which, we are told, there are "lots". So you see, you don't have to worry about winning the grand prize right away. Go for one of the "lots" of additional cash prizes then re-invest your winnings in more lottery tickets.

After a period of time you will get up to one of the "lots" of $50,000 prizes. With $50,000 smackeroos you can now invest in 12,500 more Cash for Life tickets which will give you 12,500 in 1.25 million chances of winning the grand prize.

This intelligent approach to lottery investment has now brought the investor to a point where his odds of winning have been greatly increased. Where only one Cash for Life ticket gives the owner 1 chance in 1.25 million of winning the grand prize our smart lottery ticket buyer has narrowed those odds to 1 in 100!

Even if our investor doesn't win the grand prize this time he will almost certainly win something. For example, there is one chance in 2000 of winning a $50 prize in the cash for life lottery. So our investor has an excellent chance of winning 12,500 divided by 2000 equals 6.25 50$ prizes for a grand total of 312 dollars and fifty cents!!!

By re-investing this $312 in more lottery tickets at $4 each our investor can now buy 78 more Cash for Life tickets! The odds of winning $10 in the Cash for Life lottery are 1 in 83.33. One does not have to be a wizard in math to see that our investor, with 78 tickets has an excellent shot of winning the $10 prize. He will also have a shot at some 2X, 3X and 4X wins as well as some of the smaller $6 or $4 prizes.

Say our investor has managed to win $20 on his latest investment. By putting these winnings back into lottery tickets he has the opportunity to win even more money!

Through the magic of disciplined and wise lottery ticket investment our hypothetical investor has made quite a lot of money for himself. First there was the $50 grand. Then there was $312. In the third round of play our investor earned another $20.

Without doing hardly any work at all our investor has made himself a cool fifty-thousand, three hundred and thirty-two dollars in just three rounds of play!

Of course, it may have been noticed that our investor isn't left with too much money at the end of this first cycle of investment. As stated above, Lottery investment requires a great deal of self discipline. If at first you don't succeed, try, try again. Time in the lottery market will eventually pay off handsomly. The odds are that if you are consistent you will eventually win the grand prize.

For example, if you buy one Cash for Life ticket a day the odds are that you will win the grand prize in 1.25 million days = one-hundred and seventy-eight thousand, five-hundred and seventy-one weeks = three-thousand, four-hundred and thirty-four years - almost four millennia (about the length of recorded history).

This is not as large a span of time as it may seem, especially when compared to the age of the earth (4.5 billion years.)

Certainly, lottery investing requires a lot of time and patience. It is a good idea to get your children and grandchildren into the game as soon as possible. The amount of money that can be won is nothing short of amazing when time is properly factored in. For example, if you, one of your children, one of their children, and so on for the next 4.5 billion years were to buy one Cash for Life lottery ticket per day members of your family will have won the grand prize one-million, one-hundred and twenty-five thousand times by the time earth is only twice it's current age.

Skeptics may balk at this advice by saying that the purchase of one four dollar lottery ticket a day for the next 4.5 billion years would end up costing $6570000000000 dollars (6.57 trillion dollars) but they forget to take into account the "lots of additional cash prizes" that will be won during the same period.

Something to think about?

last modified:Wednesday,March 19, 2008 at 04:40