In an article that is sure to be torn apart more than a few times soon, Rich Dad, Poor Dad author Robert Kiyosaki recent stated that a friend of his would rather play the lottery than invest in mutual funds. To a point, I agree (somewhat) with that: most mutual funds are atrocious tools for growth. The loads, the management ineptness and the fees are all considered by many industry veterans to be one of the worst ways to invest your money. Consider John Bogle (founder of Vanguard), Peter Lynch (of the famed Fidelity Magellan fund) and former SEC Chairman Arthur Levitt. All of these respected individuals have spoken on the high costs and poor returns of the average mutual fund. Yet, financial advisers and licensed brokers dole them out to customers like candy to a baby.

But, the devil is in the details here -- not all mutual funds can be grouped into a big basket. No-load index funds are great investment vehicles for most novice investors in the U.S. Rather adventuresome investors may get into individual and speculative stock picking, but for most, the index fund (and a varied bucket at that) is a great way to park that money. Kiyosaki does not even make this distinction. Strike #1. According to a conversation with a friend of Kiyosaki's, 401(k) contributions, IRAs and profit sharing/pension plans are not wise investments at all. Whoa -- them's fightin' words!

It's true that investment vehicles in areas where investors have little control (like the market) can lead to somewhat of a gamble, is playing the lottery any better? Based on the track record of the market (and index funds in particular), do lotteries have a better return? It's true that past performance is no guarantee of future results, but with a few grand, what do you trust? An index fund or REIT or maybe a few hundred lotto tickets?

While there is a semblance of thought in the article by Kiyosaki, the premise is lacking in supporting detail and not enough investment vehicles are referenced to make a convincing thought here. I'm still a non-believer in most mutual funds (a waste of time and effort unless you know the manager), but index funds are still the way to go for many investors -- and I'd still put my money into one of them rather than play the lottery. Answer this: would you rather have little control over your investments for the (unknown) chance of a higher payoff or complete control over your investments with a tiny and slim chance for a payoff?