Just as I made my last blog post to the Amateur Investor website (Here we go again. Markets Plunge) I received an email about Friday’s National lottery rollover (according to the email the EuroMillions jackpot is estimated to be £57m).
This seemed an ideal time to blog about the National Lottery and the Amateur Investor take on it…
First off, I should say that for about 4 years I ran a lottery syndicate at a company I worked for over 10 years ago. On average we played 40 lines a week for most weeks of the year (let’s say we played for 50 weeks a year to make calculations easier).
So in the 4 years that I ran the lottery syndicate we played approximately 8,000 lines at £1 per line, “investing” £8,000 in total!
8,000 lines! It would take someone playing one line a week over 153 years to play that many times!
In the 4 years we won £10 a few times and managed to match 4 numbers only once (banking about £50 for 4 numbers). You don’t have to be a statistician to work out what a poor return our £8,000 achieved.
When I left the company to move onto pastures new I vowed NEVER to play the lottery again. Over 10 years later I have been true to my word.
“But come on, it’s only £1 a go” I hear you say.
Yes, it may only be a Pound, but all those Pounds add up.
£1 a week for year is £52. But play the lottery midweek as well as at the weekend and your annual lottery spend goes up to £104.
Assuming you are a basic rate taxpayer you might have to earn between £130 and £140 before tax to take home the £104 needed to feed your lottery habit (this calculation is just a rough calculation). And that £104 spent playing the lottery could mean spending £520 over a 5 year period.
All of a sudden those couple of lottery lines a week have been converted to a bill of £520 every 5 years (and you’d probably have to earn around £700 before tax to get £520 in your pay packet.
Still feel like playing the lottery now?
Why don’t you save up all those Pounds buy some Premium Bonds every year with the money. At least when ERNIE has made the draw each month you get to keep your Premium Bonds.
A Final Thought
Before I get abuse from people telling me about all the good causes the Lottery funds, I know, I know! But if you want to give to charity then give to charity directly. Not only will your favourite charity get all of your £1, but if you are at least a basic rate taxpayer then the charity can claim further funds using the Gift Aid scheme.