Video: Play the Lotto or invest?

Over the last 20 years the National Lottery has paid out a total of R285 million in jackpot prizes. But as they say, the lottery is a tax on the mathematically challenged.

The chances of winning are really, really small. You only have a one in 14 million chance of matching all six balls correctly. Even to get just two matching numbers is a one in a thousand chance. Have you ever wondered what you would have saved if over the last 20 years, instead of playing the Lotto, you had invested the money?

If you bought one row of numbers for every Lotto draw since 11 March 2000, you would have spent R6 290.

Old Mutual calculated that if you had invested R6 290 in March 2000 into their Balanced Fund, you would have over R52 000 today.

Even if you had just invested in their money market fund, taking no investment risk, you would have nearly R29 000. (Of course that would assume that you had R6 290 back in March 2000 to invest.)

But even if you had put away R26 a month rather than playing the lotto, based on the 10% return from the stock market over that period, you would have over R19 700 today.

This goes to show how just a small amount of money adds up over time. So, if you are procrastinating about starting an investment because you “don’t have the money”, look at where your money is currently going and maybe there is some small thing you can give up to start that nest egg today.

Further reading: Should you be playing the National Lottery?

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