Still gambling on the National Lottery? Here’s a far more likely route to riches

Ditch the lottery. You’re far more likely to become wealthy doing this.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Getting rich quick sounds great in theory, doesn’t it? Unfortunately, the chances of this happening are slim. Take the National Lottery.

Despite the overwhelming odds against winning the jackpot (45,057,474 to 1), millions of people still play the game habitually. Today, I’ll show you a far more likely way of achieving financial freedom, albeit one that requires patience.

Losing bet

Now, don’t for one minute think I’m knocking those that consider the lottery a harmless bit of fun (as opposed to those who genuinely believe it will be their path to riches). For many people, the mere possibility of winning is enjoyable enough.

However, quite aside from the fact that grabbing the jackpot appears to be more trouble than it’s worth (considering the number of lucky people who’ve gone on to experience a host of problems after picking the right numbers in the draw), it’s worth remembering that the cost of doing so adds up over time. 

A single line in the main Lotto draw costs £2. Let’s say you regularly pick fives lines of numbers when entering. Now let’s assume that you do this twice a week. That’s £20 a week or £1,040 a year. The latter could buy you a nice holiday or a high-end TV.

Let’s take things to the extreme. The National Lottery has been around for 25 years. Let’s say you play for the next 25 years and there’s no increase to the cost of doing so. That’s £26,000 exactly.

Better odds

It won’t surprise you to know that I think there’s a better use for this cash. What’s more, the probability of success is far higher.

Forget what you’ve heard about the stock market being a dangerous place. Over the long term (think decades), stocks are the best performing asset around.

Let’s go back to that example. Instead of using £80 to play the lottery every month, what would happen if you invested this amount and it earned 7% annually (based on the historical performance of the market). Here, you’d end up with a little under £61,000 by 2044.

So, that’s £61,000 vs £0 (if you won nothing, which is likely). Don’t forget, we’re only talking about money you would use for the lottery, not including anything else you might be able to save over the years. 

This is just a hypothetical example, of course. Your return clearly depends on something we can’t predict with absolute accuracy (like the behaviour of the markets). Moreover, it also rests on what sort of strategy you adopt, which in turn should take into account your risk tolerance and how much time you’re willing to keep your money invested.

For younger people, a higher weighting in growth-focused businesses could be the way to go. For those with more moderate risk appetite and/or closer to retirement, strong and stable dividend-paying stocks might be appropriate.

Just remember that whatever investing style you adopt will require patience and a willingness not to meddle. That’s easy to say but it’s actually much harder to do in practice. As experienced Foolish investors know, learning to sit on your hands is a skill that tends to be developed over time. 

In sum, probability suggests that playing the National Lottery religiously is not the best use of your cash. If you’re serious about growing wealthy, I’d ditch the bi-weekly draw.

It ‘could be you’…but it probably won’t be. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Close up of manual worker's equipment at construction site without people.
Investing Articles

Investing £14,708 in this FTSE 100 stock could earn me £1,000 per year in passive income

Is a CMA investigation into anticompetitive practices the cloud cover Stephen Wright needs to start buying shares in a FTSE…

Read more »

Investing Articles

Despite rising 152% in a year, is Rolls-Royce’s share price still a bargain?

While Rolls-Royce’s share price has shot up recently, it still looks very undervalued against its peers, and the business looks…

Read more »

Investing Articles

Could Nvidia stock be a bargain in plain sight?

Nvidia stock has surged 252% over the past 12 months, but that doesn't mean it's expensive. In fact, it may…

Read more »

Investing Articles

Here’s why I think the Vodafone share price should be 110% higher

Reflecting on speculation, our writer believes there’s a case to be made for the Vodafone share price being more than…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

Is this dividend star also the best bargain in the FTSE 100?

This FTSE 100 stock pays a whopping 8%+ yield, looks very undervalued against its peers, and is set for stellar…

Read more »

Investing Articles

2 FTSE 100 stocks. One sublime, the other ridiculous

Our writer doesn’t understand the appeal of Ocado. But looking at the grocer’s latest results makes him see the attraction…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Down 18% in a year, what’s next for the Greatland Gold (GGP) share price?

The Greatland Gold share price has disappointed over the past 12 months. Our writer asks whether the company’s latest update…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

With 30% annual returns for a decade, I’m buying this for my Stocks & Shares ISA

Oliver Rodzianko has been looking for a new investment for his Stocks and Shares ISA. Here's one he's decided is…

Read more »