More than three quarters of the country gamble, and most of them will lose more money than they win. Read more about gambling 'get-rich-quick schemes', such as the National Lottery and Premium Bonds!
Last year I wrote an article on gambling called A Betting System That Works! The gist of it being that, actually, betting systems don't work, or if they do they are quickly quashed by the industry, making the effort involved in trying to beat their talented mathematicians and odds setters futile.
The problem is, millions of us still gamble, believing that some get-rich-quick schemes are worth risking our spare change on. Worse, half of us use our savings! A recent poll by The Fool of 1,484 people found that two out of three of us buy lottery tickets regularly and one in two have Premium Bonds. However, six out of 10 people who religiously buy weekly lottery tickets are adamant that they are not gamblers.
The good news is that eight out of ten of us say that the risks of gambling should be taught in schools. Whilst I think this is a good idea, to learn the risks you first have to learn how to gamble. Problem is, I've found that once wiseguys are told it's a bad idea, they then try to find ways to beat the system, thinking that they can succeed where the hugely-vast-great-massive majority has failed. I just I hope the syllabus is darn well written.
The National Lottery
Gaming (gambling) industry insiders consider games or strategies that have an average loss of 3% to be 'a good bet'. However, on average we lose 50% on the National lottery! I can't explain any better than Cliff did in Big Brother's Guide To The Lottery why you just shouldn't do it, so I shan't try. Please read it!
Premium Bonds
With most forms of gambling, with average luck you'll lose money. However, with average luck with Premium Bonds, you'll make 3.6% per year. (The Treasury sets and varies this rate, which you can find at National Savings & Investments.) Also, you will never lose your stake, making it vastly better than most bets!
Still, although this is far better than regular gambling, because over time you might actually expect to end up with more than you put in, again, the big winner is the operator (read Fifty Years Of Premium Bonds).
Thing is, most people will still lose, because they could do better simply by putting their money into a decent savings account. Basic-rate taxpayers just need to get a savings account paying 4.6% to beat the tax-free average winnings of 3.6% that you get with Premium Bonds. What's more, you don't need average luck to earn savings interest over 5.5%! (See our savings accounts.)
Higher-rate taxpayers might fare a lot better, as the equivalent savings account interest rate would need to be 6%. But you have to remember that it's not guaranteed. Submitting yourself to chance doesn't always pay off, especially in the short-term, as Fools discuss on our Premium Bonds board. Take this thread (the first one I saw) for example: I know I keep going on about this but...
Of course, you can't win a big prize with savings account, but my opinion is that the phrase 'you've got to be in it to win it' is the cleverest hookline (and sinker?) for any get-rich-quick scheme ever!
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> Beginner investors should read: Your Guide To Foolish Investing, Introducing The Index Tracker and How To Profit From Shares.