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It’s the lottery factor: “Humans routinely exchange large amounts of money for excitement.”

That’s a quote from The Four Pillars of Investing (affiliate link) by William Bernstein. I don’t think I’ve ever heard things put quite so bluntly. And it’s true, whether you’re talking about the lottery, travel, lunch out every day, or investing in junk bonds instead of index funds.

Can you imagine people standing around the water cooler asking, “So, did you put a dollar into your high-interest online savings account today?” It’s just not that exciting. People would probably laugh if you asked that. Yet it’s common to hear, “So, did you buy a lottery ticket today? What would you do if you won?”

One is steady and certain (you’ll have that dollar for sure, plus interest as time goes by) and the other has a miniscule chance of ever coming to pass. But the lottery is exciting! Just imagine the possibilities — you could retire early, payoff the house, take a trip around the world. But you can do all that by saving consistently & investing wisely too, and that has an enormously better (if less exciting) chance of actually coming to pass.