MONEY COMMENT
Claim Your Million Today!

By Cliff D'Arcy
July 31, 2003

According to a survey from market research group Datamonitor, there were an estimated 74,000 British millionaires in 2001. Of course, the falling stock market has destroyed several fortunes since then, but the booming property market has created many more.

However, a million isn't quite what it used to be. £1m is around forty times the current average income of £25,000 a year. Fifty years ago, it was about 4,000 times the typical annual wage of around £250. So, thanks to inflation (rising prices), today's millionaires are the poor relations of the old-style tycoons!

Nevertheless, most UK adults wouldn't mind becoming very wealthy, so here are four ways to become a millionaire. Be warned: some of these approaches are less likely than others!

1. The National Lottery – fat chance!

The odds against picking six balls from forty-nine are 13,983,816 to 1 (for non-mathematicians, that's 49x48x47x46x45x44/(6x5x4x3x2x1)). "But someone wins a fortune in almost every draw!", I hear you cry. Yeah, but face up to it, it's not going to be you. Winning the lottery is like picking out the single lucky grain of sand from a dustbin full of the stuff -- it's possible, but amazingly unlikely.

Anyway, as Camelot returns less than half your stake money in prizes, a massive £10,000 of lottery tickets would win, on average, under £5,000. The lottery is a tax on people who are bad at maths, so give it a miss.

Marks out of ten: zero, which is effectively your chance of winning a jackpot.

2. Who Wants To Be A Millionaire?

This is really tough to win. It costs £1 to call the WWTBAM premium-rate number and answer a question. Get it right and you go into the draw for that show. Be one of the lucky hundred who gets called back to answer another question and, if you do well, you're one of the ten contestants on the show. Win the Fastest Finger round, and you're sitting in the hot seat opposite Chris Tarrant. All that remains is to answer fifteen questions correctly and you walk away with a cool million!

However, WWTBAM get hundreds of thousands of calls for each and every show, so the odds are heavily stacked against you. In any event, unless you are a pub-quiz genius and completely immune to incredible stress, you don't stand a chance on the harder questions. With WWTBAM, you usually end up winning a lot less you think!

Marks out of ten: three, which is the number of honest WWTBAM millionaires to date.

3. Monthly saving into a deposit account

This is a very low-risk way to become a millionaire. If you earn, say, 2.5% after tax on your savings account, saving £1,000 a month will make you £1,028,337 in... 46 years. However, if inflation is also 2.5% a year, it will largely wipe out your gains, effectively leaving you with £552,000 in today's money (which is only what you saved in the first place!).

Marks out of ten: five, which is roughly the number of years you'll live after 46 years of hard graft!

4. Monthly saving into the stock-market

This is one of the best ways to get rich. Just ask Warren Buffett, who has amassed at least $30 billion during his life and also made investors in his company wealthy along the way.

Since 1945, the average annual return from the UK stock market has been 12.4%. At this rate, £583.33 a month (that's £7,000 a year, the limit for a tax-free shares ISA) turns into £1,058,169 after 25 years.

Now, I know a number of people who are investing this much -- or even more -- in order to get rich. However, most British workers have much more modest means. Nevertheless, investing £100 a month at 12.4% a year gets you £1,096,705 after 40 years -- a working lifetime.

Marks out of ten: ten, until someone shows me a better way to wealth!

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