Why You Should Never Buy Lotto Tickets!

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A tempting way for many people to try and get rich is to buy a lotto ticket each week, hoping to strike a lucky jackpot and catapult themselves to financial freedom. This is a poor approach and there is a much better alternative with which you can guarantee a win! 

The chances of  winning lotto in Australia are 1 in 29 million!! (averaged across the top 5 weekly lotteries). Needless to say this is highly unlikely….

Let’s assume a 25 year old decides to buy a lotto ticket every week until they retire at 65. If they spent $20 a week, after 40 years they will have spent $41,600 in total (not taking inflation into account).  Despite buying over 2,000 tickets in this time, their chances of winning anything significant are still incredibly small. 

As an alternative, let’s assume they invest $20 per week in a low-fee index fund or dividend paying share portfolio, returning 7% per annum (compounded monthly).  After 40 years, their shares would be worth $227,484! 

Given the positive expectation of investing in a diversified index fund or similar low-risk investment, let’s now assume they decide to really kick their savings plan into action and invest $100/week. Their shares would be worth $1,137,419 at 65 yrs old! 

Instead of throwing money down the drain on negative-expectation lotto tickets each week, why not guarantee yourself “winning the lotto” by the time you retire using the magic of compound interest – the 8th wonder of the world! 

With this strategy you also get the benefit of learning about financial discipline and money management, while slowly building your wealth. There is a reason why many lotto winners go broke soon after a big win – they have no idea how to manage their money and waste it on short term purchases. A far better approach is to think long term and plan for the future with a simple yet sustainable savings plan that anyone can follow!

If you want to play around with these numbers yourself, check out the compound interest calculator at the following link:

Some other scenarios (7% return):
Starting with $5,000, investing $50/week = $650,000 after 40 years
Starting with $10,000, investing $100/week = $1,300,533 after 40 years

If you want to aim for financial freedom in a shorter timeframe (also 7% return), how about:
Starting with $0 at age 25, investing $100/week = $351,000 after 25 years
Starting with $20,000 at age 25, investing $250/week = $992,000 after 25 years

There are many things you can do to kickstart your journey to financial freedom and this is probably the easiest one! In addition, consider diversifying your approach and buying property to take advantage of leverage and supercharge your investment returns even further. 


If you want to get in touch, please send me an email:
micahkg@gmail.com




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