Why I Will Never Buy A Lotto Ticket

By Craig Lowe 


I have never purchased a Lotto ticket and I never will. My problem with Lotto is that it is a losing bet. Statistically speaking, you lose money on every dollar you spend when you buy a Lotto ticket. Of course most people lose the entire cost of the ticket, and some people win an extraordinary amount, but in aggregate Lotto takes in more than it pays out - which is exactly how casinos make money. Lotto were very clever when they started marketing the prizes from just cash to a bunch of trappings that the money could buy: like overseas holidays, boats and flash cars. This helps focus our minds on a very improbable outcome. Of course, I can appreciate that many people simply enjoy the thrill of a relatively harmless weekly Lotto ticket. It's just that chasing that kind of thrill doesn't appeal to my personal philosophy, which is......... to focus on process, not outcome. 

Although everyone understands that Lotto winners were lucky, in general, our minds deal with probability very badly.. We tend to vastly underestimate the role that luck plays in life and overestimate the chance of good things happening.* We also interpret a good outcome as proof that a decision or action was correct. For example, the person who buys an investment before a boom appears to be smart, while the person who buys before a crash looks like a fool, when neither conclusion is correct if they were just lucky and unlucky in their timing. Using a small sample of good outcomes to judge skill is the enemy of good thinking because individual results on their own mean little when there is a mixture of luck and skill involved - such as in sports, business and investing. However, over a long period of time a track record of success indicates skill because lucky and unlucky results even out over time, exposing a skilled process.

Real estate is no different. There will always be uncertainties beyond anyone’s control when you sell your home. For instance: how many willing buyers are ready to buy your home at any moment in time, how many similar houses are on the market and what their asking prices are, or even whether or not a certain person happens to see your home advertised or not. In spite of these unknowns, skilled salespeople can improve price expectations by tens of thousands of dollars by using broad marketing campaigns that maximise buyer activity, and well-executed marketing systems that influence competitive behaviour and increase your sale price.

If you are assessing an agent to sell your home, you should focus on understanding exactly how they intend to extract a good price from the market, rather than what their prediction of the future price will be. You should be looking for genuine insights not canned sales pitches. If you hit a good one, the difference will be obvious. Since good and bad results even out over time, you should also look for a long record of success. Concentrating on these factors will help remove the luck from your own decision making, and improve your chance of choosing the agent that is most likely to get you the highest price. The downside to choosing the wrong agent is likely to cost you a lot more than buying a losing Lotto ticket. 

I am available to provide my personal perspective on the best sales strategy for your home with no cost or obligation. Call me anytime on 021 764 746 for a free appraisal.

 

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