Is it worth playing the lottery?

Make MoneyBy Eamon

The lottery sells the dream of luxury living and early retirement, but is it really worth playing the lottery or is the hope of winning just an illusion to keep you spending money? If you want to know the true cost of doing the lottery and better ways to make money, stick around until the end.

Is the national lottery a scam?

The National Lottery is a legitimate form of gambling that is state-franchised and operated by a licensed private organisation. It’s regulated by the Gambling Commission in the UK, which aims to keep crime out of gambling. Historically, there’s no indication that winners of the prize draws are fixed but it’s easy to feel like you’re getting scammed when the odds of winning are so low.

What are the odds of winning the lottery?

You have have a better chance of being struck by lightning than winning the lottery. In order to win the EuroMillions, you’d need to match 5 main balls each out of 50 numbers + 2 lucky star balls out of 11. In total, there are over one hundred million possible combinations and only one is right per draw. Your luck of hitting the jacket is roughly 1 in 139,838,160 or 0.00000072%.

Which lottery is the easiest to win UK?

The good news is that the easiest lottery to win also comes with the biggest jackpot. While the EuroMillions is harder than most to hit the jackpot, it also dishes out the most prizes, meaning you don’t have to match all your numbers to get a substantial sum of money. The table below shows a breakdown of other UK winners in a £111m EuroMillions jackpot result. The amount you end up winning depends on the number of people who also match the same amount of numbers within a prize draw. Hundreds of thousands of people with 2 numbers get their money back while matching 5 numbers can get you as much as six figures. There’s also one guaranteed UK millionaire maker draw so, regardless of your numbers, there is still a shot at winning big.

Why you shouldn't do the lottery

There’s a lot more to lose from doing the lottery than you think. When you scratch below the surface you’ll find that even winning has a dark side to it.

The lottery is a form of gambling that relies on the slim hope of catching a lucky break. The main problem with it isn’t so much financial, but psychological. Every time you play the lottery you’re betting against yourself and your belief that you are capable of becoming successful without it. It casts doubt on your abilities, ambition and drive to earn money, and runs counter to long-standing values that create most millionaires. Normally, you’d need to work hard, build character, give value to others, innovate, create jobs, and make an impact. And these aren’t things to shy away from. Quite the opposite; they help the world go around and improve everyone’s lives. But when you play the lottery, your mind is rejecting these ideas that will actually help you in favour of a dream where you do nothing and have it all. And if you need evidence that taking shortcuts can go horribly wrong, 70% of lottery winners end up broke and a third go on to declare bankruptcy, according to the National Endowment for Financial Education. Without going through the necessary life adjustments when building up wealth, instant money will so often amplify our existing worst tendencies. And the worst part is that many winners struggle to return to a normal life and end up suicidal.

If you have an addictive personality, the simple act of buying lottery tickets can spiral into unhealthy gambling habits that could also lead to worse activities. It’s easy to find yourself sinking into debt and getting trapped in a vicious cycle of borrowing and paying off loans that make you a slave to money.

Also, people like to think a large injection of money will help them with relationships. Sadly, this is often not the case. You’re more likely to grow cynical and isolate yourself from those around you. People start to act different and call you out of nowhere. Family members may even feel entitled to a certain percentage. And whenever things go wrong in their lives (which you are funding), you will also be expected to pick up the bill. If you don’t or so much as hint that they need to be more responsible with ‘their’ money, you’ll soon find them grow more resentful and perceive you as controlling. If you want to keep everything a secret, you’ll find yourself micromanaging your lifestyle to avoid dropping hints.

Alternatives to the lottery

If you played the lottery weekly over 50 years at £2.50 a ticket you’d spend around £5,000. That doesn’t sound too bad though, right? Well, firstly ticket prices will keep going up to around £9 so you’ll actually end up paying between £10-20k. Given the low odds of hitting the jackpot, it’s worth considering how much you could make with that same money with much higher odds of success. One low effort, low risk option is to invest in a standard index fund for the S&P 500 where, historically, you can make an average of around 10% a year. Your £10,000 investment would likely increase to around £1,173,909 over 50 years thanks to the power of compound interest.

With £10,000 you’re in territory to put down a deposit on a house. Property is a time tested asset that appreciates in value. If you know how to find a good deal, you can get a mortgage and rent it out at a cost that pays for your monthly payments and gives you a few thousand pounds profit on top of that. All the while, your property price is going up and increasing your equity for when you’re ready to sell.

You can step into the world of ecommerce and websites for much less than £10k. As long as you can buy inventory at a good wholesale price and you have researched to make sure the resale value gives you plenty of profit margin to cover your costs, you can rinse and repeat selling products online through popular platforms like eBay and Amazon.

If you have a skill that people pay for, invest in getting started with setting up your own freelancing company as a side hustle. Put money into tools, branding, website creation and marketing spend and you’re off. If you don’t have much experience, start investing in courses and tools so you can grow and provide people with something worth paying for.

Building wealth slow and steady is the best way to make money, as well as smart saving and investing. Do things properly and lay the foundations now and your future self will thank you for it.

Keep going to keep growing...