Op-Ed: Ready to Take a Gamble? It’s What People Do in an Economic Downturn
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By Ryan Casey Stephens, FPQP®
Special Contributor
Bill Morgan, an Australian truck driver, had a fatal heart attack after nearly being crushed in a terrible accident in 1998. He was clinically dead for 14 minutes while doctors tried to revive him. Few people recover from 14 minutes with zero heartbeat without brain damage. However, lifesaving care was successful, and Bill miraculously woke up from a medically-induced coma after 12 days, perfectly intact!
Not long after, Bill decided to lean on his apparent luck when he bought a scratch-off ticket and won a car worth $17,000. A Melbourne TV station asked him to purchase a second ticket to re-enact the win for a story, and when he scratched off that second ticket he won another $250,000. Many have asked him to try his luck a third time, but Bill has so far refused. Does this man have good luck or what?
Have you ever wondered?
There’s been a lot of economic gloom and doom in the news lately. Inflation is constantly chewing into our hard-earned dollars, and millions of ordinary Americans have begun to cut back on discretionary spending. The signs are all around us — home starts and sales are slowing, consumer spending is down, and nonprofits are reporting a decline in charitable giving.
With our economy weighing on my mind during a recent drive along I-30 in Fort Worth near Camp Bowie, an enormous Texas Lotto billboard grabbed my attention, and it got me thinking: What happens to lotteries in times of economic downturn? Do people like our lucky truck driver, Bill Morgan, cut back on unnecessary spending? Do jackpots decrease?
Boom or bust …
As it turns out, we tend to ramp up our lotto purchases during economic downturns.
After looking into one study on the topic (yes, even this topic has been researched), the data seems to suggest that lotteries see a noticeable uptick in sales. As the researcher puts it, “Overall, the findings of the follow-up study suggest that when people are experiencing financial difficulties during economic recessions, the possibility to improve their financial situation by winning large jackpots with low initial stakes becomes more enticing.”
It was noted that 16 percent more lotto tickets were sold in 2011 during the recovery from the recession than in the boom that preceded it in 2007. There’s an old saying: “One ounce of luck is better than a pound of gold.” Now we’ve discovered that when times get tough, many people take to the convenience store counters to buy, what they hope, will be their quick and easy way out of uncertainty and fear.
We all understand this intuitively, right? When money is tight, don’t folks feel more inclined to gamble on a career change or earn a new degree? People often start their own businesses when they become too stressed or frustrated with their situation. Or perhaps you’ve considered moving across the country at some point to start over? I think there’s something in the way we’re wired in America that tells us to take chances in hopes we’ll make it big. Isn’t that the dream that built Hollywood, so to speak?
So what will you do, reader? As costs soar, rates skyrocket, markets tumble, and we appear to be careening towards another potential recession, will you “scratch” that itch? Will you be our next jackpot winner like Bill Morgan of Australia?
If you do, I only ask one thing — remember this article that gave you the idea and perhaps share a little of the winnings. It never hurts to ask!
Ryan Casey Stephens FPQP® is a mortgage banker with Watermark Capital. You can reach him at [email protected].
