Is playing the lottery a good investment?

Absolutely not. In the best of lottery states, you'll still lose an average of 22% when you play the lottery. In the worst states, you may lose almost 80% of your money. This figure doesn't remove those big lottery winners, either, so the typical person will lose quite a bit more.

What should you invest in if you win the lottery?

If you win the lottery, you should invest in a financial planner. But if you choose your own investments, mix it up with some growth stocks, a lot of index funds, solid companies that have been around a long while and are still growing and changing to meet the times, certificates of deposit (CDs), Treasury bonds, and other investments you believe in. It really depends on how much you win, at the end of the day, and your risk tolerance.

What are the odds of winning the lottery?

The odds of winning the Powerball jackpot are 1 in 292 million. The odds of getting killed by a falling piano are 1 in 250 million.

Am I guaranteed to make money investing?

Nothing in this life is guaranteed, but a solid portfolio of companies that you understand and believe in, plus some index funds and Treasuries can help ensure that your future is a bright one.

Playing the Lottery vs. Investing: Which is Better?

Playing the Lottery vs. Investing: Which Is Better?

By Kristi Waterworth – Updated Sep 11, 2025 at 2:51 PM EST | Fact-checked by Frank Bass

Key Points

Investing in stocks or index funds has consistently shown growth, far outpacing lottery returns.
Odds of winning the lottery are extremely slim, with most players losing money.
Long-term investments in reputable companies or funds can significantly increase wealth.

Sometimes, people will compare investing to winning the lottery -- after all, how do you know if your company will hit it big or turn into a massive nothingburger? The reality is that there's a lot more subtlety in the lottery vs. investing argument, and we're going to talk about it in this article. Read on, Fools, and find out what your odds are of winning with your investments versus the lottery.

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Two people smile while buying lottery tickets. — Image source: Getty Images.

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Playing the lottery versus investing

Let's just get this out of the way: Your odds of winning the Powerball jackpot are 1 in 292 million, every time it's played.

But, of course, that's just of winning the actual Powerball, and not of coming out ahead by a reasonable amount. But as it turns out, your odds of coming out ahead with any lottery aren't that great, either. Although prizes per capita are greater than losses per capita in states like Arizona, Florida, and Pennsylvania (just to name a few), prizes per capita are lower than losses in other states, including Delaware, Oregon, and South Dakota. This doesn't exclude big jackpot winners, so those numbers are probably running a little high for the average non-jackpot winner.

The lottery prizes paid out per dollar spent per capita in the United States range pretty widely, too, from $0.21 in South Dakota to $0.78 in Virginia; there's no state in the country where the prizes paid per dollar spent per capita exceed $1. That means, statistically, everybody loses. (Again, these numbers include those jackpot winners, so for the average person in the gas station, you're going to see a much smaller return.)

It's a game of chance, and no matter how many times you play, you'll never really be certain that your money will help you make more money. This is where investing and the lottery differ. With investing, as long as you're making informed investments, the likelihood that your portfolio will move you further along to your financial goals is high.

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Sure, some stocks will be absolute dogs, like my own personal favorite terrible choice, WeWork. I did not see that coming and really should have. But some of my other investments, like Digital Realty Trust (DLR -0.77%) and UMH (UMH -3.96%), have had modest and steady gains over the last five years (plus regular dividends, which are beyond the scope of this article). When compared to a solid index fund, like Vanguard's S&P 500 ETF (VOO +0.23%), which I also happen to own, those real estate investment trust (REIT) wins are nothing – five years of steady growth in this exchange-traded fund (ETF) have produced a gain of more than 95%..

But any of these (WeWork aside) will produce more income on a more consistent basis than the lottery.

The winning approach

Long-term investing in solid companies that you believe in is always a better bet than gambling on the lottery. They call it gambling for a reason, after all. Investing is not a gamble; it's putting money in a company or other asset for which you can clearly see a path to growth. If you could buy into investments in the same place you bought gas station nachos, a lot more people would be really excited about stocks.

Where you put your money matters, and how long you plan to keep it there does, too. The power of compounding can take your modest investments and help them grow, even if you choose the absolutely safest investments possible, like high-yield savings accounts.

If you put $10,000 into that savings account and added just $100 a month for 30 years, if the interest rate averaged 4%, you'd have $102,539.92 at the end of that period. That's not too shabby at all. But investing in an S&P 500 index fund is even better. If you'd put that same initial $10,000 in an index fund that followed the S&P 500 really closely 30 years ago, without adding anything at all, you'd have $111,771.50. That's no joke -- it's a 1,018% increase in your investment in that time.

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FAQ

Lottery vs. Investing: FAQ

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

TMFMaldivesBlue

@MaldivesBlues

Kristi Waterworth has positions in Digital Realty Trust, UMH Properties, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Digital Realty Trust, Microsoft, and Vanguard S&P 500 ETF. The Motley Fool recommends UMH Properties and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Playing the Lottery vs. Investing: Which Is Better?

Key Points

Playing the lottery versus investing

The winning approach

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FAQ

Lottery vs. Investing: FAQ

Is playing the lottery a good investment?

What should you invest in if you win the lottery?

What are the odds of winning the lottery?

Am I guaranteed to make money investing?

About the Author

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Playing the lottery versus investing

The winning approach

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Safest Stocks to Buy in 2026: Low-Risk Picks for Stability

Lottery vs. Investing: FAQ

Is playing the lottery a good investment?

What should you invest in if you win the lottery?

What are the odds of winning the lottery?

Am I guaranteed to make money investing?