Last week, the National Lottery launched an exciting new game called Set For Life that will take place every Monday and Thursday night. Offering a top prize of a £10,000 payment every month for 30 years, the game is definitely likely to appeal to those who regularly purchase lottery tickets. Just imagine what you could do with that kind of money every month. At only £1.50 for a ticket, the game certainly looks interesting at first glance.
Risk versus reward
Yet taking a deeper look at how the Set For Life lottery game works, the risk/reward proposition may not be so attractive at all. You see, to win the top prize, you need to land five main numbers from between 1 and 47, as well as one ‘Life Ball’ number from 1 to 10.
The odds of winning the major prize of £10,000 every month for 30 years? Around 1 in 15.3m, according to the National Lottery website.
Those kinds of odds can be hard to interpret, as the human brain is essentially not wired to work out such large figures. But to put that number in perspective, if you combined the entire populations of Ireland and Portugal, it would total around 15m people. So, therefore, if you lined everyone up in these two countries and handed them a Set For Life ticket, only one person would win the major prize. Not great odds, is it? Playing Set For Life could turn out to be an expensive hobby.
An easier way to get rich?
In my opinion, an easier way to become wealthy, or build up a sizeable passive income stream, is to invest your money in shares.
Okay, shares won’t make you rich overnight from a £1.50 outlay. Yet, with the stock market generally returning around 7-10% per year on average over the long run, you’d be surprised at just how quickly a small investment could grow if you invest regularly.
For example, according to my calculations, an investment of just £5 per day could potentially grow to over £300,000 if it was growing at 10% per year for 30 years. Start investing £5 per day at 30, and by 60 you could have built up a nice lump sum.
Of course, it can take a little while to understand how stock market investing works. There are important concepts that you need to understand before investing your money.
That said, educating yourself on the basics of investing is quite easy these days, and you can find out a lot about the subject – and the secrets to generating a healthy return on your money – by regularly tuning into The Motley Fool website.
With our expert writers discussing attractive UK investment opportunities every single day in our free articles, there’s always something to learn. If you like the idea of building up your wealth by investing in shares, you’ve come to the right place.
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.