A recent survey about wealth accumulation is but another manifestation of a serious, but often overlooked problem in this country: innumeracy.

Reuters reports that when a survey asked respondents how best to "accumulate 'several hundred thousand dollars,'" 35% of those answering said winning the lottery, receiving an inheritance, or getting a big insurance settlement were the best methods toward gaining wealth.

Only 55% said it could be accomplished through savings.

From Reuters:

More than one in five Americans believe the best way to get rich is to win the lottery, while 11 percent say inheriting money is the way to go, a survey showed on Monday.

Asked the most practical way to accumulate "several hundred thousand dollars," 21 percent chose winning the lottery, compared to 55 percent who thought saving something each month for many years was best, according to a survey by the Consumer Federation of America and the Financial Planning Association.

Three percent of those surveyed thought a big insurance settlement was the best way to become wealthy.
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Stephen Brobeck, executive director of the Consumer Federation, said it was of "some concern" that so many people thought the lottery was their best chance at wealth.

"It appears that these Americans both greatly overestimate their chances of hitting a lottery jackpot and greatly underestimate their ability to build six-figure wealth by patiently making regular savings contributions over time that benefit from interest compounding," Brobeck said.

It's interesting that so many people are unaware of how compounding works, yet believe in lotteries as their way to accumulate wealth.

The fact is, many lottery jackpots have odds that are in the neighborhood of 10,000,000 to 1.

This misunderstanding of a such a basic concept is unacceptable and needs to be addressed.

The survey of more than 1,000 adults also found only about half of Americans understand the meaning of personal wealth -- which includes financial assets plus home equity and other assets minus consumer debts -- and less than half know how much personal wealth they have.
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While financial planners believe about half of young Americans could accumulate $1 million over a period of 30 years, fewer than 1 in 10 of Americans believe they could save that much money, the survey showed.

"Planners know that it is easier for individuals to build personal wealth than they realise," said James Barnash, chair of the Financial Planning Association.