The National Lottery is extremely popular in the UK. According to statistics from Lottoland, more than 32m people play the lottery on a regular basis (around 70% of UK adults), with many of these people buying several tickets per week.
When you think about it, it’s no real surprise that people love the National Lottery. ‘Spend a little, win a lot’ is the tagline, and the chance of winning a huge sum of money (£3.8m is up for grabs tonight) for an outlay of just a few pounds no doubt appeals to a lot of people.
But could there be easier ways to become a millionaire?
The odds are stacked against you
The thing to understand about the National Lottery is that the odds are very much stacked against you. Sure, it’s possible to win a little here and there, yet realistically, the odds of winning a major prize are very low indeed. For example, the odds of winning the National Lottery jackpot are 1 in 45,057,474.
To put those odds into perspective, Spain’s entire population is around 45m. In other words, if you lined up every single person in Spain and gave them a lottery ticket, only one person is winning the major prize. I don’t know about you, but those kinds of odds don’t appeal to me so much.
Making a million slowly
In my view, a much easier way to obtain millionaire status is by investing in the stock market.
As a ‘get rich slowly’ strategy, stock market investing isn’t likely to make you a million overnight like the National Lottery possibly could, yet with a simple long-term investment strategy, making a million over time is certainly possible, no matter your salary.
You see, the stock market is a proven long-term wealth generating machine. This is due to the fact that stocks, in general, tend to produce returns of around 7% to 10% per year on average over the long run.
While you can lose money on stocks in the short term, the longer you invest for, the less chance there is of generating a negative return and the more chance there is of making a healthy return on your money. In other words, the longer your investment horizon, the more the odds become stacked in your favour.
Making a million
Compounded over many years, a return of around 7% to 10% per year can transform a small investment into a very large amount of money, especially when added to on a regular basis.
For example, according to my calculations, an investment of around £2,100 per year (just over £40 per week), growing at 10% per year, grows to just over a million after 40 years.
This means that if you started an investment plan at age 25, contributed just over £40 per week into the plan and consistently earned a return of 10% on your money, by 65 you could have built up a million-pound portfolio. Boost the investment to £5,000 per year and the time taken to reach a million falls to just 31 years.
In my view, this kind of strategy makes a lot more sense than spending money on the National Lottery. With the lottery, you have a very low chance of becoming a millionaire. However, with a disciplined long-term stock market investing strategy, making a million is a real possibility.
