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Forget the National Lottery! These FTSE 100 stocks could have helped you retire in luxury

Royston Wild
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It’s been a big week for the National Lottery. Tuesday marked exactly 25 years since the very first draw was made, and since then more than 5,500 lucky players have joined the seven-figure club and walked away with a cheque worth at least £1m.

Human nature means that it’s easy to be seduced by the headlines and to keep plugging away with the EuroMillions or Lotto draws each and every week in the hope of also winning a life-changing sum. The reality is very different, though, and the chances of correctly picking those six numbers plucked from the machine are miniscule.

Get better returns

Don’t forget: for those several thousand millionaires there have been tens of millions more people who’ve won little more than pocket money. This means that regular payers have likely lost a small fortune in that time, money that could have been put better to work elsewhere.

I’ve estimated that someone who’s forked out £50 every week since the first National Lottery draw would find their bank accounts £217.33 lighter at the end of the month (and by a whopping £65,200 in total).

And as I’ve explained, they in all probability have very little to show for it. For comparison’s sake, how much could this individual have made by buying UK stocks over that time period instead? Well based on the 10% average annual return that long-term investors usually enjoy, this individual could have made more than £268,038.

According to some of The Motley Fool’s calculations that sort of sum could help you retire comfortably. Though having said that, investors with a sounder investment strategy than the herd could have made even more money on London’s share indices over the past 25 years by exploiting booming stock values.

FTSE firecrackers!

Take the individuals who decided to purchase stock in some of the FTSE 100’s current alumni back in autumn 1994. If you’d invested £217.33 in Halma shares every month for the past 25 years, for instance, today you’d be sitting on a pot worth £355,074. Why? Shares in the safety product manufacturer have appreciated by 11.8% on average each year in that time.

Had you spent that monthly cash on Ashtead Group instead – whose market value has risen at an annualised rate of 18.4% since November 1994 – the rental equipment play would have made  you £573,323.

Another tasty figure, sure, but chicken feed compared with the returns from some of London’s other blue chips. Footsie share JD Sports wasn’t even trading on the London Stock Exchange when those lottery balls were first set in motion in 1994. The sportswear giant’s IPO took place two years later, and since then its share price has grown at an annualised rate of 18.7%.

Someone who had invested that 217-odd pounds every month since JD’s IPO of October 1996, instead of spending it on lottery tickets, would have made a staggering £763,787!

All juicy figures, sure, but I’m doing these top-tier equities some disservice as these figures only account for share price gains. Throw dividends into the bargain too and total shareholder returns are even higher.

It’s clear, then that stock investing is a great way to make the sort of money to help you retire in comfort. So get share picking today!

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Royston Wild owns shares of Ashtead Group. The Motley Fool UK has recommended Halma. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2019