Who wants to be a millionaire?
Winning Lotto or investing wisely – which is more likely to put you on the rich list?
The odds of winning first division Lotto are just 1 in 3,838,380 - and even then the average prize is only $400,000. So what other options do you have?
To answer this question, there was a story published about one of the world’s most famous investors, Warren Buffett, who made a bet about how investments would do over the long term.
As part of this, he put his money where his mouth was and invested $1m (admittedly a huge amount of money in the first place) in equity and bonds aiming to double the investment in 10 years. Since then he has made a return of 7.1% per annum so that his investment has currently made a profit of $854,000 with a bit of time to go and is reasonably on track to get to around $1m.
Not many people have $1m but many do have a time horizon of more than 10 years between investing and needing the money.
The moral? If you want to make a million, invest in bonds and shares over a long period, using expert advice to structure your investments. Compared to Lotto, the odds are much more in your favour.
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