Earlier this year, the National Lottery launched a new game, Set For Life. Played on Mondays and Thursdays, the lottery game offers the chance to win a £10,000 cash payment every month for the next 30 years.
Given the attractive prize up for grabs, it’s not hard to see why Set For Life has been popular among those who like to play the lottery. After all, who wouldn’t a tax-free £10K lump sum, every single month for the next three decades? Just imagine what kind of lifestyle you could live with that kind of money.
However, looking at the odds of winning a Set For Life prize, I can’t help but feel that playing this unique lottery game could turn out to be a total waste of money.
The odds are stacked against you
You see, to win the Set For Life major prize, you need to land five main numbers (from 1 to 47) plus the ‘Life Ball’ (from 1 to 10).
The odds of achieving this? Around one in 15.3m, according to the National Lottery website.
Stop and think about that number for a second.
To help put those odds in perspective, I can tell you that the probability of being struck by lightning in the UK is around one in 1.2m while the odds of being eaten by a shark are around one in 3.7m. In other words, you’re far more likely to be struck by lightning or eaten by a shark than you are likely to win the major Set For Life prize.
When you think about it like that, Set For Life certainly looks far less attractive as a wealth generator.
The easy way to set yourself up for life
If financial freedom is your goal, I suggest you’re better off forgetting about Set For Life, and any other lottery game for that matter, and doing three key things:
Spending less than you earn
Saving money into a tax-efficient savings vehicle such as a Stocks & Shares ISA or a Lifetime ISA
Investing your money in growth assets such as shares and funds for the long term
Just by doing these three things, you could potentially set yourself up for life financially.
For example, let’s say you saved £200 per month into Stocks & Shares ISA and invested this money into a diversified portfolio of shares and funds that generated a return of 8% per year on average over the long run. According to my calculations, after 20 years, that money would have grown to over £100,000. Lift your monthly savings to £500 per month, and you could be looking at savings of nearly £300,000 in just 20 years. This money would be entirely tax-free too because you saved into an ISA.
Ultimately, building wealth is not that hard. The key is simply to spend less than you earn and get your money working for you.
If you’re looking to learn more about how to invest your money for the future, you’ve come to the right place.
- No savings at 40? I reckon you can retire rich with these tips
- Forget the Bitcoin price! Here's how I'd invest £10k to make a million
- I’ll hold this 11% FTSE 100 dividend yield in my ISA for at least 10 years!
- Forget buy-to-let. I’d aim for a multi-million pound retirement portfolio this way
- How should I invest £10k? 2 reasons why Warren Buffett’s advice could be worthwhile
- Top shares for 2019
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