L0tto...the great heist?

It’s interesting how so many parents like to preach the message of hard work to their children but then line up for a L0tto ticket.

We had better not beat up on our parents too much. It's only human nature, we all love a quick win.

But how much of a heist is L0tto? Let's take a fun look at it and get educated.

The odds of winning Powerball (when buying one line) are about 1 in 38.3 million. So you’re dreaming if you think you will win.

But you’re creaming yourself if you do, so I get it.

Fun fact, I once won $1,000 on scratchies on a morning tea break with a mate of mine. We asked for 333 more $3 scratchies. The teller wasn’t impressed. Don’t worry, we took the cash.

Another fun fact: you don’t need to scratch them and get that niggly scratchy stuff under your finger nails or over your carpet. Get the teller to scan the barcode...that’s no fun I hear you say!!

Extra, fun fact. If you buy, say 20 of them (or 333 of them) they can scan the first and the last barcodes and tell you if any in the middle won too. I know a mind-blowing way to quickly see how stupid your purchase was right?

You are probably thinking ‘Wow Luke, how do you know so much about scratchies?’. I wish I could tell you I used to work for L0tto, but it’s probably more obvious that I bought too many hoping for some easy cash. I am human too.

Bloody hell, I was supposed to be talking about L0tto but here I am confessing my sinful lunch time activities when I hated my job and was hoping for a distraction away from the office.

Back to it….for every dollar spent on L0tto, 55cents is kept back for prizes. 23cents is given to the NZ lottery Grants Board and used to ‘build sustainable communities around New Zealand’.

The government sneak about 12cents in the dollar for tax…shock! Even though L0tto is basically a redistribution of wealth from everyone to the winner, the government is still taking a nice cut.

Don’t worry, the winner isn’t paying tax on their winnings. [This is not tax advice…].

But what about us losers who haven’t won the jackpot? What about if we just saved that cash?

I am going to guesstimate that the average spend is probably twenty bucks.

If you invested $20 per week at a 5% growth rate and did this for 40 years, you’d have over $130,000.

Cool story Luke, but I don’t want $130k. I want the Ferrari and the Bach now brother!

Yeah, fair enough. $130k doesn’t sound overly exciting when you are playing for $40million.

But that $130k only really cost $41,600 which is 40 years of $20 a week.

If you can find a 10% return, you’ll be looking at over half a million after 40 years.

Some people play the Wednesday version of L0tto too. Let's say $40 a week for 40 years, compounding annually at 10%, you've got over $1,000,000.

For some of you, it might be time to give up on the L0tto dream and redirect that to your Kiwisaver and enjoy a better retirement.

Enough with the practical tips, let's look at some stats...how many tickets sell? Back in 2020 L0tto said this:

"For a $5m jackpot we'd typically sell around a million tickets...when the jackpot is high[er], more people play, which can see a doubling in the number of tickets sold."

Kiwis love to buy a l0tto ticket. Because I am a geek, I dug into their annual report and found that:

L0tto sales for the year ended 30 June 2021 were $1.508 billion (including GST). These sales were the highest in L0tto NZ’s history and 8.9% up from the prior year. Well sh!t who would have thought L0tto sales would crank during a pandemic!

Geeky extra lesson - the 30th of June is often ‘balance date’/‘year-end’ for government entities.

Interestingly, around 1 in 3 dollars of those sales were done via MyL0tto (online).

Anyone remember the ‘Must be won’ $50million draw in August 2020? Surely some of you bought a ticket because more than 2,000 tickets a minute were bought in the lead up to the draw. Around 2.5 million tickets sold in total.

There were no First Division winners that night, so 10 people each won $5million when taking home Division Two.

I love researching how L0tto are going and often read their annual report (I know…what a life) because I think it has some fascinating insights as to how Kiwis live and how they will say one thing but then do another.

From a business perspective, they’ve had to activate online sales (they now have 1.4million Kiwis registered on MyL0tto) and they would have one of the biggest customer bases in Kiwi business, which gives them a lot of data.

I have no beef with them and am not here to run them down. I am just showing you some of the things you may have always wondered about.

Ultimately, if people want to buy tickets, that’s for them to decide. Like anything, bad things are bad in the hands of the wrong people.

I’m just suggesting you consider the concept of ‘delaying gratification’ and chasing some longer-term gains with the money you’ve worked hard for.

You’re statistically more likely to be handing it to someone else in the community than you are to be towing that boat you can’t drive in the overpriced Ford Ranger you can’t back.

Get real, and aim to get rich for sure, not quickly.

IF you do win…get some financial advice because you won’t want to waste the opportunity.

Right, I am off to buy a scratchie….

Have a winning weekend,

Luke