So, future ERer or dissipated gambler?

[donheff]

My 12 yo grandson invests all of his money (presents and earnings) in equities in a Schwab Custodial Account I set up. He is up to $2k. I made him put half in a total market index fund to serve as a benchmark against his stock picks. He has recently acknowledged that index funds are the more reliable route to gains, although he still wants to play around with picks with a portion of his portfolio.

Tonight he is over watching the Nats game on TV with his grandmother. I heard him talking to her about his latest scheme. His dad (DS) let him put $25 into some complex pool betting on the results of the Masters. He told DW that he hopes to win the first place $7k. If he does, $3k goes into Amazon, $1k split amount his other stocks and stock slices, and the other $3k “straight into my index fund.”

LOL.

 

[SnowballCamper]

Better to learn the lessons while young, with minimal impacts to real life consequences!

 

[whatnot]

What a great lesson you are teaching your grandson.

 

[NW-Bound]

$25 to win $7K. The odds are not good for him to win. Your grandson is a dreamer.

 

[Koolau]

$25 to win $7K. The odds are not good for him to win. Your grandson is a dreamer.

It's true the odds are long, but it's probably better than the Lotto. As long as gaming is not considered an investment strategy (and never deprives anyone of necessities) I'd say it's fairly harmless.) I've mentioned that my BFF (1/2 mil in debt at 77) considers his several Lotto tickets per week as his financial plan! YMMV

 

[NW-Bound]

A risk of $25 is surely harmless even for a boy with $2K. But it looks like a sure loss.

I truly don't remember when I was 12 if I would take this slim chance or not.

 

[Sunset]

Worst thing the can happen is he wins !

 

[donheff]

Worst thing the can happen is he wins !

LOL. That's what I thought. Losing the $25 is a better lesson.

 

[ncbill]

$25 into scratchers probably has better odds...

 

[Jerry1]

His dad (DS) let him put $25 into some complex pool betting on the results of the Masters. He told DW that he hopes to win the first place $7k.

There’s more to win than just the $7K. We don’t know what the odds of winning some amount is. Maybe the odds of winning his bet back aren’t too bad. Though, I agree that there is a lot to be learned from losing the $25.

 

[Walt34]

Worst thing the can happen is he wins !

Yeah, that would be really hard to explain away....

 

[Franklin]

A risk of $25 is surely harmless even for a boy with $2K. But it looks like a sure loss.

I truly don't remember when I was 12 if I would take this slim chance or not.

cheap entertainment especially if he watches and enjoys the Masters. Now if it continues into other sports thats when I would have a word. Be glad he takes an interest in the sport. Having raised 2 boys I'd say this is normal. The real question is where did he learn the betting formula? Maybe Dad?

 

[rk911]

...I've mentioned that my BFF (1/2 mil in debt at 77) considers his several Lotto tickets per week as his financial plan! YMMV

one of my oldest and closest friends (i was his best man at their wedding) had roughly the same plan. bill was a dear, sweet guy with a huge heart but he was part ralph kramden (always with a get rich quick scheme) and part your BFF. he died penniless. we paid for his funeral. i miss him.

 

[Chuckanut]

It's true the odds are long, but it's probably better than the Lotto. A

The best thing that could happen to the young lad is to lose his money. Lose enough and that will kill any idea that gambling will produce profits.

My grandpappy used to say, "The state lottery is a tax on people who did not study their math". I think that is also true for most organized gambling.

 

[freedomatlast]

An acquaintance won $1,000,000 in the state lottery with a $30 scratch off ticket in March. Instead of looking to invest it and set up some sort of income stream, he's already bought 2 new vehicles, big home improvement down payments for several projects, lots of toys, lots of dollars to the kids and lots of additional lottery scratch off tickets every day.

I think the OPs grandson is certainly on the right track and his $25 bet will be well spent tuition in his early education about money.

 

[JoeWras]

The best thing that could happen to the young lad is to lose his money. Lose enough and that will kill any idea that gambling will produce profits.

Worked for me. My early try (age 8 to 12) into gambling was putting up $1 in a baseball "squares" pool. I never, ever won. Killed my desire.

I think getting kids into investing early is good. But there is a danger to it.

The gamification of the market made easy by various phone apps is leading some down dark paths. It is just so easy to play the game.

 

[donheff]

DS and DGS came over to watch the Nats game last night. They both lost their $25. It was a pool one of DS's coworkers set up that has accumulated about 300 participants. You get some number of points with which you assemble a team of 4 golfers, 3 of whom have to make the tournament. $7K was the total pool, $5K was 1st. DS says it's more fun than the lotto because you can watch (or at least follow) the tournament to see how your "ticket" is doing.

It is weird to have my 12 yo grandson send a text in the evening saying, "hey, Pop, will you send me a screen shot of my portfolio?"

 

[donheff]

DS and DGS came over to watch the Nats game last night. They both lost their $25. It was a pool one of DS's coworkers set up that has accumulated almost 300 participants. You get some number of points with which you assemble a team of 4 golfers, 3 of whom have to make the tournament. $7K was the total pool, $5K was 1st. DS says it's more fun than the lotto because you can watch (or at least follow) the tournament to see how your "ticket" is doing.

It is weird to have my 12 yo grandson send a text in the evening saying, "hey, Pop, will you send me a screen shot of my portfolio?"

 

[ncbill]

An acquaintance won $1,000,000 in the state lottery with a $30 scratch off ticket in March. Instead of looking to invest it and set up some sort of income stream, he's already bought 2 new vehicles, big home improvement down payments for several projects, lots of toys, lots of dollars to the kids and lots of additional lottery scratch off tickets every day.

I think the OPs grandson is certainly on the right track and his $25 bet will be well spent tuition in his early education about money.

That's because they're the type of person who plays the lottery ALL THE TIME.

I bet they spent well over $1,000 (probably closer to $10,000) on scratchers afterwards.

OTOH, I only buy multi-state lottery tickets, and only when I'm in an adjacent state where winners can remain anonymous.

 

[OldShooter]

The lottery is simply a tax on the poor and the ignorant. But if DGS gets interested that might be good. Some hard-earned dollars down the lottery toilet is cheap tuition compared to the cost of that education in the real market.

 

[Mulligan]

A risk of $25 is surely harmless even for a boy with $2K. But it looks like a sure loss.

I truly don't remember when I was 12 if I would take this slim chance or not.

I got sent to the principals office as a 6th grader for being the class bookie. It only lasted a couple weeks before I got in trouble. I do remember a 25 cent game limit. There was a line at my desk during home room, and I remember the teacher asking what was going on, and I told her we were paying off the bets from the football games. Next thing you know Im in the office.
They paddled back then and I thought I was going to get a heated seat over it, but I got out of it somehow.

 

[easysurfer]

Worst thing the can happen is he wins !

Yeah, if he wins, he may conclude that he got easy money figured out .

 

[RobbieB]

You know you're not gonna win the "sports pool" at the front.

10 x 10 grid, numbers drawn at random after filled out grid. Four winners, 1st, half, 3rd quarter, final.

If you do win, go have a nice supper!

 

[Koolau]

The best thing that could happen to the young lad is to lose his money. Lose enough and that will kill any idea that gambling will produce profits.

My grandpappy used to say, "The state lottery is a tax on people who did not study their math". I think that is also true for most organized gambling.

Stated succinctly: The house always wins!

 

[Koolau]

The lottery is simply a tax on the poor and the ignorant. But if DGS gets interested that might be good. Some hard-earned dollars down the lottery toilet is cheap tuition compared to the cost of that education in the real market.

I think the worst thing about the lottery is that those who conceived it and put it into motion KNEW that it would not work (for the state or whatever) if folks used it "responsibly." IOW, IF I were ever to play the lottery, it would have been during one of those weeks back at Megacorp when everything went wrong, everyone was on my case and I didn't have funds to ER. SO, then I might just have gone out and bought ONE lottery ticket, scotch taped it to the inside of my desk drawer and DREAMED about a winning amount that would take me away from all this cwap! Of course, I'd lose, but by then, it would be the next week and I would no longer need the dream, 'cause I'd figured my way out of what ever was wrong (like I always did) and go on until a couple of months later, it would hit the fan - setting me up for another lottery ticket purchase.

Turns out, I muddled through with OUT the lottery ticket, but that's the only way a lottery ticket makes sense. Buy it as a dream-maker for a week or two. Buying tickets as if it's actually a possible way to solve problems leads to excess and makes the lottery work for the state. That is exactly how BFF uses the infernal lottery. End of rant as YMMV.