Oh dear ... can we Americans get any more financially irrational? OK, OK -- maybe I'm not talking about you. Maybe you've been dutifully socking away funds for your retirement, you're on track to pay for Junior's college education, your home is half paid for, and you've even bought most of your presents for next Christmas.

Or maybe not. The truth is: Gobs of Americans just seem to have their heads on backwards when it comes to making smart money moves.

You see, I just ran across the results of a survey conducted by Opinion Research Corp. for the Consumer Federation of America and the Financial Planning Association that stated that only 26% of adults think they could accumulate $200,000 in net wealth in their lifetime -- and a mere 9% believe they could collect $1 million.

That's bad enough, but the news gets worse: 21% said a lottery would be "the most practical strategy" for accumulating several hundred thousand dollars. (Yes, those in lower income brackets were more likely to think this -- some 38% did -- but many in upper brackets think this way, too.) Hello -- the lottery?!

No need to play the numbers
I'm here to set the record straight: Odds are, you can accumulate a nest egg worth $200,000 in your lifetime -- and you may very well be able to reach the $1 million mark, too. Here are some possibilities for accumulating wealth that don't require striking it big with the lottery:

  • First off, if you can sock away $8,000 a year -- in a coffee can buried in your back yard or under your mattress -- for the next 25 years, you'll accumulate $200,000. But that's silly.
  • Instead, invest $5,000 a year, earning just 5% on average per year (which you might get via CDs or money market accounts at various times), and you'll have $200,000 within about 22 years.
  • Better still, if you invest in the stock market and earn its historic average annual rate of 10%, $5,000 annual contributions will grow to $200,000 in just 16 years, and to $1 million in just 31 years.
  • Might you do better? Sure. If you earn, say, an annual average of 14% (perhaps via some carefully selected mutual funds or individual stocks), your $5,000 per year will grow to $200,000 in only 14 years -- and $1 million in 25 years. Just as examples, some companies that have averaged 14% or more in annual returns over the past 15 years include Southwest Airlines (NYSE:LUV), 14%; Micron Technology (NYSE:MU), 14%; and EMC (NYSE:EMC), 28%.

Meanwhile, if you'd been buying lottery tickets, here's what would most likely have happened: $5,000 in lottery tickets would have netted you roughly $2,500 in winnings. Sure, some very rare people win big jackpots, but most of us will never do so. On average, lotteries tend to pay out about 50% of what they take in.

But if you're a regular saver and investor, you could still be forking over big chunks of your money without meaning to. The Eagle Growth Fund, for example, sports an 8.5% front-end load and an astronomical 3.6% expense ratio. Not surprisingly, it has delivered an annual average return of 7.3% over the past 10 years -- trailing its benchmark by 1.2 percentage points. It's currently invested in the likes of Humana (NYSE:HUM), Disney (NYSE:DIS), Expeditors International (NASDAQ:EXPD), and Capital One Financial (NYSE:COF).

While this mutual fund underperformer is a bit of a disaster, it's still a heck of a lot better than pinning your hopes on the lottery.

The good news
Fortunately, not all Americans are out to lunch when it comes to money matters. According to the survey, some 55% of adults thought that the most practical way to accumulate hundreds of thousands of dollars is "to save something each month for many years."

So take some time to make sure you're saving and investing as effectively as possible, lest you end up missing out on some thousands more you could have accumulated. If you'd like some help, consider trying Rule Your Retirement free for a month. My colleague Robert Brokamp can help you organize a saving plan and he offers stock and fund recommendations that are a lot more compelling than that Eagle Growth fund. Just click here for more information.

Longtime Fool contributor Selena Maranjian owns shares of no company mentioned in this article. Disney is a Stock Advisor pick. The Motley Fool is Fools writing for Fools.