What Are The Odds?

Posted on Posted in Finance, Goals

This weekend we took a quick trip to Crater of Diamonds State Park in Arkansas with some friends.  I’ll be writing about the park on Friday, but today I wanted to share an observation about wealth and security from the diamond mine…

My diamond hunting helpers.
My diamond hunting helpers.

An interesting part of searching for diamonds is the people you can observe at the washing tables.  Everyone has their gravel screens and are washing their material in search for diamonds.  There were lots of folks like us who were out there having fun and enjoying a new experience.  But there were a few who had serious plans for finding ‘a big one’ so they could retire and not have to work anymore.  I’m sure a recent discovery of a 6.19 carat diamond by a local man fueled visions of early retirement for many.

But what are the odds of finding a diamond at Crater of Diamonds State Park?  The State Park has a listing of largest diamonds found and quantity of diamonds per year, along with the total number of visitors in the park.  In 2013 there were 115,523 visitors to the park.  A total of 455 diamonds were found and registered with the park.  Straight odds would say that 1 in 253 visitors would find a diamond.  But those odds would not be accurate.

Many people, such as David Anderson who found the 6.19 carat diamond, live near the park and hunt regularly.  Experience and skill play a factor in searching for diamonds, so a large number of the diamonds, especially the small ones are found by experienced hunters.  Of the 455 diamonds found in 2013, only 17 of them weighed more than 1 carat, the largest being a 5.16 carat brown diamond.

Rough diamonds just over a carat will be the only ones that might have some value.  Much of the value depends on the quality of the diamond and whether it is of the size that can be cut and polished.  The odds of finding a 1 carat or greater diamond are 1 in 6,795 without factoring in expert hunters.  Realistically the odds of finding a quality diamond worth more than $10,000 would be somewhere in the ballpark of 1 in 300,000 or so, by my best guess. $10,000 isn’t near enough to give up your day job…you’d need quite a few more zeros.

The highest quality diamond to come out of the mine in recent years was the 3.03 carat white diamond found in 1990.  The diamond was cut and polished to a weight of 1.09 carat and is the most perfect (flawless) diamond ever certified by the laboratory of the American Gem Society.  They didn’t assign a value to the diamond but it is on display at the Crater of Diamonds State Park.

Let’s compare the odds of finding a good sized diamond with some other known odds:

The point?  There is no easy way to strike it rich.  Hard work and discipline are the only sure fire way to provide financial security for your family, and even that has issues.  As Dave Ramsey says, you’d be better off driving down the interstate flicking dollar bills out of your car than playing the lotto.  It is truly a tax on people who can’t do math.  (The Dave Ramsey article linked above also includes 5 other ‘stupid taxes’ that too many people are paying.)

There is nothing wrong with taking the kids to the only place in the world where the public is allowed to hunt for diamonds.  In fact, it was a blast and I’m looking forward to going back (again…more on that in my Friday post.)  But I recognize that going to Crater of Diamonds is a neat and unique experience, not a method to defy the odds and provide financial security for my family.

I hope you’re having a happy, healthy, and productive day!