Alt Investments

$100 Invested in 100 $1 Lottery Tickets

$100 in lotto tickets
($100 of $1 lottery tickets)
 

Investment Idea: $100 invested in 100 $1 lottery tickets.

Total Investment: $100

Total Time Cost: 00:30:00

Extra Costs: None

Total Time Spent on Investment: 10 minutes spent online finding lottery ticket with the best odds. 5 minutes spent buying lottery tickets. 15 minutes spent scratching off all the tickets.

Research and Preparation: Gambling and the lottery have always held an enticing allure for a lot of people: the idea that you could spend just $1 and be rewarded in prizes that are worth exponentially more, and all it would take is a little bit of luck and all your problems would be over. I knew I wanted to try my luck on $1 lottery tickets because I thought it would be cool to buy 100 of them. I also knew that I could find the odds of winning online at http://nylottery.ny.gov/.

After comparing all of the odds for the $1 scratch off tickets I came to a couple of conclusions:

– There are twelve different $1 scratch off tickets available in New York

– The odds of winning ranges from a best of 1:4.64 (Instant Take 5)

– To a worst ratio of 1:5.09 (Happy Birthday Cupcakes)

Happy Birthday Cupcakes Scratch off Ticket
(Never buy birthday themed tickets)
– The average odds of winning on a $1 scratch off ticket was 1:4.88

– The NY lottery website never refers to odds of winning, but instead calls it “Chances of Winning”

– The $1 scratch off ticket with the worst odds is the “Happy Birthday Cupcakes” ticket (1:5.09), ticket (1:5.09). Also, the other birthday themed ticket “Happy Birthday Presents”, with odds of 1:4.99, has the third worst odds of the batch. If you value your friends and give them lottery tickets for their birthdays please don’t buy them birthday themed tickets to help them increase their odds.

Happy Birthday Presents Scratch off Ticket
(Don’t buy these tickets either)
– The $1 scratch off ticket with the second worst odds is the Gold Rush, 1:5.02. I assume it has such bad odds since the allure of gold suckers people in.

How I chose which lottery ticket to buy?
After seeing the spread of the odds and the possible prizes I decided to choose the $500 A Week For Life ticket. It’s overall odds of 1:4.84 wasn’t the best, but it put it in the better half. Also, its namesake price of $500 a week for life was the best possible grand prize out of all the $1 scratch off tickets. Winning $500 a week for life would have provided the greatest possible return for my $100 I can think of. Of course the odds of winning 1:7,938,000 but, “hey you never know.”

Some of the other odds for the $500 A Week For Life ticket:

Prize Odds of Winning Expected Winning Tickets Total Winning Amount
$1 1 in: 10.00 10 $10
$2 1 in: 15.15 6 $12
$4 1 in: 62.50 1 $6
$5 1 in: 125.00 0 $0
$10 1 in: 100.00 1 $10
Total 1 in: 4.84 18 $38

To make the above table I took the total number of tickets (100) and divided by the odds. This left me with “Expected Winning Tickets”. If this number had a remainder, I rounded down since you can’t buy or win a partial ticket. Also, everyone loses when they gamble, so I wasn’t going to give myself the benefit of the doubt.

So it looks like I should have anywhere from 18 to 21 winning tickets, and win a prize amount of about $38 to $40, for a return of at least -60%.

With my ticket chosen and my research done I headed to my local bodega and asked if they had 100 of the $500 a Week For Life lottery tickets, just to check before I bought some. They did.

Counting 100 Lottery Tickets
(Counting 100 lottery tickets)
Counting 100 Lottery Tickets
(Checking all of the tickets)
As soon as I had paid for the tickets with my five twenty dollar bills I couldn’t wait to get home. (Side note: something annoying about lottery ticket buying is it is cash only, so no credit card rewards points here.)

Stack of Lotto Tickets
(Stack of lotto tickets)
All of the tickets were stacked and ready to scratch! Was I about to be the proud recipient of $500 a week for the rest of my life? Or had I just thrown $100 down the drain?

Piles of lotto tickets
(Guess which pile is filled with winning tickets?)
If you said the one on the right then you are correct. After fifteen minutes of furious scratching I came away with twenty two winning tickets and a total prize amount of $41. I had lost $59 on this investment in a matter of twenty minutes, and I had actually slightly beaten the odds that I had found and reproduced above.

Reason for Investment:

Everyday, millions of people in America play the lottery and hope for the best, but more often then not it is just them throwing their money away. But wouldn’t it be great if you could just on a whim plop down $1 and buy a ticket that changed your life? I decided it was worth it to try it a hundred times over and invest $100 in $1 lottery tickets.

Returns: $41. I actually came out ahead of what I had expected on this investment, but even that meant a massive loss of $59.
My Total Winnings Table:

Prize Amount Number of Winning Tickets Total Winnings
$1
13
$13
$2
7
$14
$4
1
$4
$10
1
$10
Total
22
$41

As you can see the predictions from my research were almost spot on.

Big ticket winner
(The big ticket winner was just $10)
The thrill and rush of possibly winning started to wear off after about the twentieth losing ticket. Each card had a couple of “Life” symbols on them, and every time you got a second you just dreamed of seeing the third one under the remaining graphite. However it never appeared and never will and it just kind of turned depressing. How could people put themselves through this humiliation and teasing every day of their lives? This is definitely an investment that is not rigged in your favor and can never really bring you positive returns.

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$100 Invested in Yelp

$100 Invested in Yelp
(Yelp)
 

Investment Idea: $100 invested in Yelp

Total Investment: $100

Total Time Cost: 00:10:00

Extra Costs: $9.08

Total Time Spent on Investment: 10 minutes to set the trade trigger on TD Ameritrade.

Research and Preparation:
In order to get set for this investment I logged into my TD Ameritrade account and searched for stock ticker YELP. It came up and was trading at a price of $24. That seemed to be way too high, and buying four shares for a total of $100 at $25 a share didn’t seem ideal. Instead, I set a stock trigger to buy five shares of Yelp if the price hit $20 a share.

Yelp share buy trigger
(Yelp share buy trigger is set)
 

Low and behold, only a couple of days after setting the trigger a load of bears showed up and shorted the stock.

Yelp five day stock chart
(Yelp share price chart)

As you can see the price is now hovering below the $20 amount I paid for it. Yelp also has an earning call on August 1st, so hopefully they will have some good news and the tide will turn back in my favor.
Reason for Investment:

Excluding the recent bearish trend on this stock, I personally believe Yelp is a great service and is still well positioned in the reviews/restaurant local search market place. This market, which I consider to include such sites as MenuPages and OpenTable, is ripe for acquisition and mergers. After the Instagram deal, a billion dollar acquisition no longer seems like that much of an impossibility. Last year Google purchased Zagat, and ironically, the person who led that acquisition was none other than Marissa Mayer,* who has since left Google and now heads up Yahoo. As the battle for ad dollars continues to grow I feel another attempt at acquiring Yelp is on the way, either from Google, Facebook, or Microsoft. However I wouldn’t rule out a surprise buy out by Apple, who is flush with cash, and looking for ways to better compete with Google, and help soup up it’s Siri voice search app.

At the time of writing this, Yelp’s market capitalization was hovering at around $1.2 billion dollars, allowing for one of the aforementioned big four to come in and scoop it for most likely a $2 billion dollar price tag.

Returns:

When setting the buy trigger on this investment I intentionally set the price at a low amount of $20. I believe that Yelp has a very real chance of being acquired in the next year or so, and at a price range of $35+ a share. To find the current value of this investment, take the current price of a share of Yelp and multiply it by five. To find an up to the minute price click here!

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$100 Invested in a High Yield 12-Month CD

Investment Idea: $100 invested in a high yield 12-Month certificate of deposit from Ally Bank.

Total Investment: $100

Total Time Cost: 00:15:00

Extra Costs: $0

Total Time Spent on Investment: Ten minutes of research finding the best certificate of deposit price. Ten minutes creating an Ally bank account. Five days for the account to become credited and the certificate of deposit to be funded.

Research and Preparation:
You might be a red neck if you think investing in CD’s means buying five limited edition Garth Brooks Christmas Special CD sets.

However, a CD in the financial sense actually stands for “certificate of deposit” and investing in a CD actually means buying a certificate of deposit from a financial institution with a guarantee that they will pay you a set amount of interest and your initial amount back to you after a certain period of time. Also, CD’s issued by federally insured banks are insured up to $250,000, making them one of the safest, but lowest earning investments in the market.

You might be a red neck if you think buying a Jumbo CD means buying a record. A jumbo CD is actually the term given to a CD which has a very high size: normally a buy price of $100,000 or more. The larger the amount the CD is, the higher likelihood a bank will offer you a better rate on the CD. In my case, I have the opposite of a Jumbo CD. I have what we would call a “mini-CD” (Not an actual finance term) since my investment is only for $100.

In order to find the best price for a certificate of deposit their are some great tools but perhaps the best would be BankRate.com. BankRate offers lots of current up to the minute rates being offered across the country and lets you search them too. They have rates for mortgages, home equity, auto loans, credit cards, and lastly and most importantly for us common CD rates.

So I went ahead and clicked CD Rates.

CD Rates section of BankRate
(CD rates section of BankRate.com)
BankRate then displayed the most common CD rates from around the US in a nice table, and allows you to sort by Institution, APY (Annual Percentage Yield), Rate, Min Deposit, and Comments. I sorted the table by minimum deposit, and only one bank offered a CD which had no minimum deposit.

CD Rates Ally Bank
(Ally Bank had the only no minimum deposit CD’s)
As you can see, not only was Ally Bank the only bank that would allow me to purchase a CD for just a $100, it was also the bank offering one of, if not the highest, APY’s. APY stands for Annual Percentage Yield, and is the amount of return you should expect after a year. I should expect my $100 investment to return $1.02 for the year. It would achieve this amount by earning a rate of 1.01% that is compounded daily yielding a total return of 1.02%. When buying CD’s and making other investments it is always important to check the compounding rate. The difference on the return between an investment that compounds daily, quarterly, or yearly can be huge.

Knowing that Ally bank was the only bank I could even open a $100 CD at and the fact that it’s rate was the highest made it a no-brainer for me to go ahead an open an online banking account with it. (Click here to read about how to open an online Ally Bank account)

Ally CD Opened
(Ally Bank $100 CD)
The process of opening the Ally account was relatively easy. Unfortunately, it took a couple of days for my deposit from my regular checking account to clear, but on July 25th, the money had finally arrived and the CD went live and has been earning me half pennies daily.

Ally CD Opened
(The CD finally opened and earning interest!)
Reason for Investment:
There are a whole lot of alternative investments out there but there are also some classic investments that every portfolio should include. One of the most common and safest investments out there are CD’s. CD’s are issued by banks and insured by the FDIC for up to $250,000. They offer low returns and normally force the buyer into a locked-in time frame. CD’s are a good place to put money you don’t need for six months or more if you don’t want to put that money in too risky of an investment.

The main reason for this investment was to diversify and add a stable and common investment to my portfolio. CD’s are a very common investment and never reap that big of a return, but at the same time they are a safe place to put your money and earn a couple of pennies on the dollar.

Returns:
With my Ally one year CD, I am looking to earn $1.02 for the year. You can check this investments current value here!

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$100 Invested in Oil

Investment Idea: $100 Invested in Oil

Total Investment: $100

Total Time Cost: 00:15:00

Extra Costs: $9.08

Total Time Spent on Investment: 10 minutes of research. 5 minutes spent online signing up.

Research and Preparation:
With talk of ever booming oil prices caused by global warming, and new found global demand, I wanted to get a piece of the action. Unfortunately, I knew that you couldn’t just buy the real thing and store it yourself. There is no easy way to buy oil and store it and then hope to resell it while making a profit on such a small operation. It all reminds me of the great “It’s Always Sunny in Philadelphia” episode titled, “The Gang Solves the Gas Crisis,” in which the gang decides to buy gas and hoard it before the price raises. However, they run into a whole bundle of issues, from trying to store it, transport it, and even trying to sell it. Below is a clip from the episode.

(The gang learns a valuable lesson about buying oil)
Knowing that buying oil directly wasn’t exactly the best option, I looked out for a way to replicate and mimic the price of oil and hopefully get in on it before the price went up even more.After doing some digging, I came across the USO. No, not the USO that Charlie Sheen just gave $1,000,000, but the United States Oil Fund. The USO, ticker symbol USO, “is a domestic exchange-traded security designed to track the movements of West Texas Intermediate (“WTI”) light, sweet crude oil. USO issues units that may be purchased and sold on the NYSE.”

That sounds like a whole lot of gibberish, but basically it simmers down to mean that the USO’s price tracks almost spot on with the current price of sweet crude. To illustrate this, below is a chart of the year to date performance of Oil and USO.

Oil year to date performance
(Oil looks to be tanking)
As you can see, the red line for Oil and the blue line for USO turn practically purple with all of their overlapping.

Anther quick takeaway is that it looks like oil is doing horribly. Perhaps this is a good sign, and that the market is at its bottom, a great time to buy in to it!

After reading more about USO, I went ahead and checked it’s stock price. It had been around $33.40 a share the day I checked. This was perfect. If it could just drop to $33.33 I could buy three shares for a total as close to a $100 investment as possible.

I needed a place to buy and sell stocks cheaply, so I went to Google and found TDAmertitrade. It seemed to have good reviews, so I went and signed up for an account. If you guys want one too, email me ahead of time so I can get some referral money! Unfortunately TDAmeritrade has a minimum deposit of $500, so I placed $550 into the account since I assume that each stock trade would cost around $10 and I would be making five or so total stock investments.

Unfortunately, by the time my account was fully set and funded, a couple of days had passed and the stock price of USO was now hovering at $34.50. I got worried. Had I missed the bottom? Was this stock on the up and up again?

Since I had missed my initial window of buying the stock at my ideal $33.33 price tag, I needed to just wait for it to hopefully drop again. TDAmeritrade has an awesome tool called Trade Trigger, where you can set a trade to automatically occur when a certain condition is met. In my case, I set the trigger to fire when the ask price of a share of USO was $33.33. When this condition was met it would then buy 3 shares of USO at a total price of $99.99. And I would even be sent an email when it had happened.

TDAmeritrade Trade Triggers
(USO Trade Trigger is set)
And then I waited.

This morning when I checked my inbox a new email arrived, subject, “Trade Trigger order activated.” Now that was exciting.

USO shares bought
(USO shares bought)
I logged into my TDAmeritrade account and sure enough a debit of $109.08 ($9.08 fee per a trade) had came from my cash supply, and I was now the proud owner of three shares of United States Oil Fund.

Reason for Investment:
The price of oil and of gas has seemed to be steadily on the rise. Even as people try to turn more green or use hybrid vehicles, there is still a booming market for gas guzzlers in India and China, as people turn in their bikes and reach for the keys. I personally don’t see this trend changing anytime soon and feel holding on to some oil will pay out nicely in the long run, even as oil seems to be down for now due to the slow economy.

Returns:
This investment’s return is based on the stock price of USO multiplied by three, for the three shares of it I own. To find an up to date price click here!

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$100 Invested in 100 People: Follow Up

Investment Idea:

I handed out $100, in single dollar bills on a pleasant Thursday afternoon in New York city. Here is what happened:

The giving started slow, people weren’t really sure what was going on. Lots of people thought the dollars were fake, or a gimmick. Seeing really is believing. Most people wouldn’t take a dollar from me until they saw others do it first.

Over the course of my three-block-walk, I gave away $100, meaning I talked to and interacted with 100 different people. Also, since I was rejected over half the time, it meant I talked to over 200 people on that short walk. It is amazing to think of all the people that are around you and could in a split second become a part of your life.

Many people asked “Why?”

About a quarter laughed.

Another quarter said “Thank you” (often the young people).

I gave $4 to beggars along the way. One had a baby with her so it was a dollar for her and one for the baby.

The happiest recipients were young men, old men, and nannies with kids, but overwhelmingly, the happiest were kids. Every kid who saw me handing out dollars immediately ran up and took one even if they really didn’t know what was going on. I guess these days if you really want to get kids in your van you should offer them money not candy.

Some results by numbers:

– 50+ new visitors to this website. Considering how no one else had been told about it yet it seemed most of them had to have come from my guerrilla marketing ($2 a visitor).

– 10 new sign ups on my websites mailing list ($10 a sign up).

– An awesome experience that put me out there and this website out there (free).

The results and costs I got seemed to be about the same amount as spending on a digital ad campaign, which leads me to ask why don’t people just hand out money on the street over buying Google Adwords? And why don’t people on the street stop bothering to hand out fliers and just start handing out money? As Mitch Hedberg says about fliers “When some hands you a flier its like here… you throw this away” but maybe if someone handed me a dollar next time maybe I’d actually check out what they were selling.

Images from the day below





















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