A husband and wife fight over how to spend their money to make money
Question:I play a lot of fantasy football — I’m in a PPR dynasty league, an IDP head-to-head league, and I’m commissioner of a standard points league. My wife is mad at me because this costs a couple hundred a year. But she plays Powerball like it’s nobody’s business, and she thinks she’s going to win millions of dollars. Which of course, she hasn’t done yet.
I tell her I’ve actually won a few bucks more than once playing FF. She says I never win enough, and when she wins Powerball, it’ll be for a lot more than I can ever hope to make. So I say to her, “My odds are better than yours. I’m more likely to win a few hundred than you are to win millions.”
Who’s right, Howard? Who’s the smarter investor?
— Paul in Virginia
Howard Dvorkin CPA answers…
I’ll answer your question if you promise not to be mad: You’re both terrible investors.
Fantasy football and the lottery are not investments. Playing fantasy football to earn money is no different than becoming a professional gambler. Certainly, there are gamblers who earn a nice living, but that’s their occupation — they work hard at it, and those who aren’t good enough to earn a living move onto something more lucrative (if less interesting to tell people at parties).
Unless you’re playing fantasy football at least 40 hours a week, it’s not a job — and unless you consistently win 5-10 percent returns each year, you’re not an investor.
Likewise, your wife’s odds of winning $1 million in Powerball is 1 in 5,153,632.65. That’s not considered investing, either.
That said, I know many men (and even a few women) who play fantasy football for the fun of it. They actually budget for it — it comes out of their pot of money set aside for “entertainment.” For them, fantasy football is no different than going to the movies — or buying a ticket to a real football game.
Likewise, I have some friends who buy an occasional lottery ticket when the opportunity arises, sometimes just a joke or a conversation-starter. They don’t, however, expect to win more than a few dollars.
(The odds of winning $4 in Powerball is a more reasonable 1 in 55.41.)
Here’s how I suggest you and your wife end this fight: Sit down and create a family budget if you haven’t already. Decide how much you can reasonably set aside for entertainment, and give each of you a set amount to spend as you please.
There’s nothing wrong with spending a few dollars on activities that please you — as long as you’re paying the bills and saving for retirement. However, I’d also urge you to set some entertainment money aside for the both of you. It sounds like you could use a romantic dinner to declare a ceasefire.
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Email your question to email@example.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.