Many NZ’ers would have been bitterly disappointed when checking their lotto tickets last week, learning that they weren’t the latest millionaires and lucky winners of the $44million dollars up for grabs.

But putting your faith in winning lotto is perhaps not the best way of planning your financial success – after all, how many people do you know that have won $1million or more from lotto? According to NZ Lottery, the odds of winning it big are around 1 in 3.8million. Frankly, I would not be betting my future financial success on those odds.

So what are your other options? One of the best ways of getting ahead financially, and it’s something that nearly everyone can do, is to start small. Start saving a small amount of money each week, or each month, and whenever you can, increase the amount you are regularly putting away. But rather than putting these savings into a bank account that might be paying you an interest rate of 0.50% if you’re lucky, a much better option for long term savings may be to put this regular savings amount into an investment fund, that is likely to give you a better return over the long run.

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According to Lotto NZ, a $16 triple dip is their most popular selling ticket. So let’s say that rather than taking 1 in 3.8million odds of striking it big, you decide to do something smart, and put that money instead into an investment fund. Let’s assume the $16 that would have been spent on a lotto ticket each week is instead invested, and let’s assume that you can get a long-term average return of 7% as a balanced investor. After one year of saving this lotto money, you would have a nice little savings fund of $832. That’s $832 that many New Zealander’s are spending each year on lotto.

After 5 years, that has grown into an investment fund of just under $5,000. At 10 years, it’s worth $11,500, and after 20 years your weekly lotto habit could be worth $35,000.

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So the question is – do you keep spending $16 each week and cross your fingers for that 1 in 3.8million chance, or do you start planning and making smart financial decisions?

Disclaimer –   Rachel Strevens is an Authorised Financial Adviser (AFA) and Director of Ilumony Ltd, a company providing financial services and advice on KiwiSaver. A copy of her disclosure statement is available free of charge on request from info@ilumony.com Information provided in this article is of a general nature only, and is not intended to be personalised financial advice.