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Almost all of us have dreamt of winning the lottery. The idea of such a windfall inspires our imaginations to conjure up all manner of possibilities. Most fantasies probably involve some combination of less work, more travel and probably a “few” material purchases. Not that many of us would want to openly admit it, but a little (or often a lot) lower down the list you may find family, friends or charitable organisations, at least initially ranking in the precarious territory of ‘after thought’.

Lottery numbers that equate to INVEST

But how many of us dreamers also know that the lottery is frequently described as a tax on the STUPID – The reason being that the odds of winning the South African lottery are in fact 1 in about 14 million (13,983,816 to be precise). What that is essentially telling you is that there are almost 14 million ways of combining 6 numbers, ranging between 1-49, that do not have to match any particular order or sequence.

Not what one might term ‘favourable’ odds.

As a reference point, apparently you have about a 1 in 2 million chance of being struck by lightning.

The Lottery is also frequently referred to as a tax on the POOR – Research (in the USA) has shown that more lower income people play the lottery than do the high earners. Since the cost of a ticket for a low income earner is proportionately higher relative to his income than that of a well paid professional, it is termed a regressive tax. The poor are taxed more than the rich.

If those two stigmatic labels have not put you off playing the weekly lottery then you may want to consider ways of trying to improve your odds of winning. There is even a website you can go to that breaks down the draws into some sort of analysis. You can find out which numbers are most frequently drawn, or alternatively for those contrarians out there – the least frequently drawn. Then the same statistics are available for number pairings, triplets and consecutive number pairings. The numbers most due to be called or rather those that have not been drawn for the longest period of time and so on and so on.

Unfortunately the only really sure way of increasing your odds of winning is by buying more entries….. a lot more entries.

But, even if we could figure out a way of beating the odds, it still leaves perhaps the more important question open –What is the magic number? What must the size of the jackpot be to ensure you never have to work again and can maintain your current lifestyle?

There are necessarily a whole host of assumptions involved in reaching this number but to avert the danger of a collective mass episode of narcolepsy, I have included these assumptions in the footnotes to this article.

In short, the amount you are required to win has an almost linear relationship to the amount that you require as an income to sustain your lifestyle. For every additional R100,000 you require to satiate your expenditure needs each year, you need almost R3 million more to be added to the lottery jackpot. So for a family living a relatively comfortable but modest lifestyle this may be R600,000 per year and would equate to needing a jackpot win of about R18 million. If you require an income of R700,000 a year then your winnings would need to be about R21 million.

Figure A: Jackpot win required to ensure you never have to work again

Lottery win required per income level

Incidentally, the process of getting to this number is similar to the income draw down strategy or living annuity calculations that someone entering retirement would have to consider.

How much do I need to save in my pre-retirement years to be able to retire comfortably (Jackpot size)?

What is a sustainable annual income to withdraw from my capital before I risk running out of money?

So the graphic in Figure A could equally be used to provide you with an indication of how much money you will need to have saved in order to sustain an income in retirement that keeps up with inflation if you were to retire today.

I think we can safely say that the slim odds of winning the lottery pretty much put pay to the idea of having this avenue open to us as a route to a secure retirement. Failing a rather large inheritance, marrying rich or inventing the next iPod, if you want to improve your odds of a successful retirement you probably need to plan for it and we at White Investments can help with that. 

If you have already done some of the hard yards without a lottery win to aid you and are at or nearing retirement, White Investments can help you to construct and manage a portfolio that will provide you with a sustainable income for life. 

Foot notes – The basic assumptions used to reach the figures stated in the graphic above are:

-The stated required annual income is a before tax figure(gross)

-The money needs to last 40 years

-The initial draw down rate is 3.3% (amount of portfolio value taken as income in year 1)

– Inflation is 8%

-The asset allocation split is 75% equities and 25% bonds. (A high equity balanced portfolio)

-The combined portfolio’s average return after fees each year is 9.18%

– As with all models containing assumptions, there are risks. If the market does not deliver the expected returns you will fall short. If inflation is higher than expected you will fall short. If your estimated cost of living is too low you will fall short. If you live longer than you think (or hope) you fall short. If you plan try and be conservative and realistic when making assumptions. 

  If you have any questions relating to the contents of this article please contact us at

Lottery play capture


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