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Forget the National Lottery! Here’s a surer way to get wealthy

The weekly National Lottery in the UK started in 1994, and it’s been churning out millionaires ever since.

These days, you can play the main Lotto game for £2. But I suspect many people pick more than one set of numbers — maybe five sets for a spend of £10 each week?

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Or perhaps people are tempted to flutter on one of the several other games on offer, with ticket prices ranging from £1 to £10.

I’d bet some folks even take a punt on all the lottery games every week, perhaps spending much more than a mere £2 for a chance to become wealthy. £25 per month, perhaps, or even as much as £25 every week?

£25 can open doors to investing

Indeed, one well-known expression asserts ‘you’ve got to be in it to win it!’ But the chances of winning the Lotto jackpot, or the EuroMillions jackpot, or any life-changing amount of money from the National Lottery are vanishingly small.

The most likely outcome from regular participation in these games is that you’ll end up out of pocket. We could, therefore, reverse the expression and say, ‘you’ve got to be in it to lose it!’

But if you’re spending as much as £25 a month on lottery tickets, you could do something meaningful with that money if you divert it to another method of building wealth. And the method I’d choose would be to invest in share-backed investments in the stock market.

£25 per month is a good way to start, because that amount of money opens the door to investing in managed and passive funds, each backed by the shares of many underlying companies. Many funds have a minimum one-off investment threshold of £100 and a minimum threshold for regular investment (say monthly) of £25.

I reckon most people would be better off putting that £25 per month into a fund than into the lottery for several reasons. For example, even though stock prices tend to fluctuate, over time, the tendency is for shares to rise. So you’re unlikely to lose all your money if you invest in a share fund.

The power of compounding

On top of that, most share funds pay shareholder dividends, which is a bit like getting interest from a bank account. If you choose the Accumulation version of your share fund, rather than the Income version, the dividends will automatically be ploughed back into the fund for you.

So, over time, a combination of rising share prices and rolled up dividends could help your investment compound and increase in value to become bigger than the amount of money you’ve paid in – perhaps much bigger.

What are you waiting for? I’d head over to providers such as Hargreaves Lansdown and others to explore how you can get started. I reckon it’s a surer way of building wealth than spending money on the lottery.

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Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended Hargreaves Lansdown. 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.