What you should do with the money you spend on lotteries

Are you a gambler, do you want the thrill of the chance of winning that BIG price? Then you might want to try this as an alternative:

I used to play the Lottery, Euromillions in fact, as the winnings seemed to be higher there. Unfortunately while the winnings were higher, the chance of winning was still slim.
I wasn’t a big gambler 4 lines at £1.50 each or £6 per week is the same as £312 per year.
I did win once in a while, but ended up spending the winnings rather quickly. On average though my £312 would have turned into around £131.

I have since stopped playing the lottery. My lottery is instead premium bonds. I put in £50 every month = £600 per year. I should currently be getting around 1.2% back in winnings, and currently with one win of £25 I stand at 2.5% return. Not an awful lot, but I get to gamble and still keep my money (what I lose is the inflation of the money).

I still have that elusive chance of bringing home the monthly £1,000,000 win, which is highly unlikely that I will ever do, but the chance is there.

So, if you are that gambling person (don’t ever do this with more money than you can afford to lose), you can put the money in premium bonds, and at the end of it you are still left with the money, kinda like putting it in your mattress.

Here are the average returns you will make on £50/month comparing Lotto, Euromillion, and Premium Bonds:

  • Lotto: Your £600 would have turned into around £270, or a 55% loss. (Jackpot estimated at £2,000,000). (www.national-lottery.co.uk)
  • Euromillion: Your £600 would have turned into around £352 based on having the same Jackpot as this week (£34,000,000) every week, or otherwise around £252, or a 58% loss (Jackpot estimated at £15,000,000).
  • Premium Bonds: Your £600 would have turned into around £604.50, or a 0.75% gain. (It is not 1.5% as advertised, as the cost is spread over the 12 months, thus giving an average of £300 “gambled” for the year). It beats the lottery hands down. You could probably get better interest from a basic bank account (though you might have to pay tax on it), but with the Premium Bonds you have the chance of that £1,000,000 price each month. (www.nsandi.com)

Even if you do happen to get the Jackpot on the lottery, there is always the risk that someone, or a few people have got the same numbers which means you will need to share it. With Premium Bonds, if you win the £1,000,000 then you don’t have to share it with anyone.

Even with £1,000,000 in the Bank, most people could live rather well just on the interest, lets say 5% = £50,000 less tax gives around £35,000 or £2900/month. I would be happy if I had that kind of money coming in each month :)

I don’t know if there will be any more gambling advice, as I am pretty lousy at gambling, and try to play things where the odds are more in my favour.

Next week I will look at food costs, trying to compare prices of ready made things, with easy home made things.

Until then

/Fredrik Sohlberg