Categories
Make Money

Shall I Play the Lottery so I Can get Rich?

There are many people that play the lottery, for all sorts of different reasons. Many people do dream about winning the lottery though and think about what they would do with the money if they did win. It can be a lovely dream, to imagine what you could do if you were rich, perhaps the house you could buy or holidays you could go on, how you could help out friends and family or even charities and things like that. However, is the lottery a good way to get rich?

Consider the Odds

It is wise to start by considering the odds of winning the lottery. We realise that the chances of us winning are low and that we are unlikely to meet someone who has won the jackpot, but do we actually know what the odds are? This will depend on the specific lottery that you are playing of course. It is likely that it is the Lotto (or National Lottery) that you may have in mind. This has a 1 in 9.3 chance of winning a prize which can sound good. However, this does mean that if you but one ticket a week you will win once ever 5.6 weeks. This sounds good until you realise that the lowest prize is just a free lottery ticket – so you will just essentially get your money back. The odds of winning a £10 prize is 1 in 97 which means that you have to play for almost two years (if you buy one ticket a week) to win this prize. If it is the jackpot that you want to win you have a 1 In 45,057,474 chance of winning. This means that you would have to buy one ticket a week for 866,489 years to have a chance of winning or over 50 years you would need to buy 2469 tickets in a day. It is quite staggering to think that would be a spend of over ninety million pounds!

Are there Alternatives?

There are definitely alternatives and it is worth considering all of them:

  • Joining a syndicate so you increase your chances of winning could be a good idea. If you club in with twenty other people you will have a greater chance of winning a prize. However, as you can see from the above, the chances are still pretty low and you are not really going to have much more of a chance of winning the jackpot.
  • It could be worth considering an alternative lottery. There are other lotteries and these may have better odds. However, those with better odds of winning tend to have smaller prizes, so you will need to decide whether you are happy with this or whether it is the big jackpot prize that you are interested in.
  • There are free lotteries that you can play online. The prizes on these are very small because they are funded by advertising but they are free to play. This can give you an opportunity to still have some fun with playing the lottery without paying out any money.
  • You could buy some premium bonds instead of buying lottery tickets. This is rather different but is still gambling. You buy a bond for £1 and then each bond is entered monthly in a draw and there are prizes of various values. There is a minimum purchase amount of £25 though and the jackpot is £1 million which is less than you would win if you won the jackpot on the lotto. However, the odds are better in some ways. The odds of winning a prize on a 31 bond is 24,500 to 1 which is a much lower chance than winning a lottery prize. However, the lowest value prize is £25 for the Premium Bonds whereas for the lottery it is just a free ticket. However, a big difference with the premium bonds is that you will always hold the bonds (until you sell them) so you will be entered in the draw every month and you can get your money back when you want to. Therefore, you cannot lose any money this way.
Categories
Employment

Is it Worth Being Self-Employed?

There are many people that really like the idea of being self-employed. It is true that there are lots of advantages but there are also some disadvantages as well. It is good to have an idea of some of each and this will help you to be able to decide whether it will be a good idea for you to try out.

Advantages

  • You can be your own boss, this means that you will not have to answer to anyone and you will be able to choose your own working hours. You will also be able to choose what you do and when and how often. You do not have to do anything just because someone has asked you to do it but you can decide for yourself.
  • You will be able to pursue your dreams. If there is a job that you have always wanted to do then you will be able to do it. You will not have to pass a job interview to do it but you will just be able to go ahead and do it regardless.
  • You could potentially earn a lot more money. Rather than the company you are working or taking all of the profits, you will get these for yourself. You will be able to pay yourself all of the money that you get in and so you could potentially take a much bigger salary.
  • You might be able to set up a business and then sell it for a lot of money. We do hear about people who manage to do this and start up small, grow their business and then are able to sell it and make a lot of money.

Disadvantages

  • You will need to be self-motivated if you are working on your own or even if not and have no boss to push you. You will have to make sure that you are the type of person that will easily push yourself to get on with the work, even the work that is not much fun.
  • You have to pay for own training as you will have no company to pay for it for you. This means that if you are moving into a field that you have not worked in before then you may need to get qualifications to be able to do the job. Even if this is not the case, you may still need to learn lots of new things. For example, you will need to know how to do your accounts and you will need to know how to do marketing if you are going to sell products or services. These may not be things you know very much about at all, but if you do not learn them, you will need to pay someone to do it for you and that will be expensive.
  • You have no holiday or sick pay when you are self-employed. This means that when you are not working, you are not getting paid. This is fine if you are fit and healthy and earning enough to be able to afford to take a few holidays every so often. However, it could be the case that you will have to work a lot in order to make enough money to manage and therefore you may be able to afford to take any breaks and perhaps may even have to work weekends as well as week days.
  • Many people that go self-employed struggle. You cannot claim benefits when you are not working as if you are self-employed you cannot be classed as unemployed as you are not job hunting. Therefore, you may not be able to get any help and will have to fully rely on your self-employment being a complete success in order for you to get a good income.
Categories
Savings

Where is the Best Place to Put Savings?

If you have money that you are interested in saving, then you may wonder whether the best place is to put it. There are lots of banks and buildings societies that offer savings account and they may have a choice of types of account. It is best to choose the type of account that you want first and then compare the different providers to see which has the best interest rate. Therefore, below is a selection of types of savings accounts with information about them, so you can learn more. This is not an exclusive list though, so there may be others available too. Once you choose a type of account you can then compare providers to see which looks best.

Instant Access Account

An instant access account will allow you get your money out as soon as you need it. This means that you will be able to use it to pop money in and then get it out again as soon as you need to spend it. You will not have to worry about whether you will need the money and what might happen if you cannot get it quickly, which could be a problem with accounts where you tie your money up. This type of account is likely to pay a pretty low rate of interest though and it will be variable which means that the provider can change it whenever they like and it is likely to go down more often than it goes up.

Notice Account

A notice account is normally set up so that you have to give notice of a certain amount of days before withdrawing the money. This could be 30, 60 or 90 days, for example. If you take the money out without giving notice you may not get any interest or you may lose a bonus. The accounts are set up in different ways depending on who you go through and for some you will just not be able to make early withdrawals at all. These will usually pay more interest than an instant access account. The interest on these accounts could be a fixed amount but it is more likely to be variable and be changed by the provider every so often.

Fixed Rate Bond

A fixed rate bond will have an interest rate that is fixed for the term of the bond. So, it might be for one, two, three or five years, for example and the interest rate will remain the same for all of that time. This can be good if the rates are very low and the fixed rate bond has a pretty good rate compared to the rate on other savings accounts. However, if you think that the interest rate is likely to rise above this amount during the term of the bond then it may not be wise to tie the money up in one. You will be unlikely to make withdrawals from the bond although some may allow a few, it will depend on the rules of that particular product.

Income Bond

An income bond will pay interest out into another account. You will normally nominate a current account and you will get a payment into it each month. The lump sum in the bond will stay the same and so you will tend to get the same amount paid into the account each month. However, you will find that this will have a variable interest rate and so the amount of income received will vary if the provider decides to change the rate. This is great if the rate goes up but if the rate goes down, then this will mean that the income received goes down.

Categories
Loans

Should I Pay off my Personal Loan Early?

There is often a lot of talk these days about repaying loans early. If you have a personal loan, you may wonder whether you should be thinking about repaying it early. However, you will need to think carefully about this in order to make sure that it will be the right decision for you. There will be different things that you should consider.

How much you will Save in Interest Payments

It can be a good idea to calculate how much your interest is and how much you will pay until the loan ends. You should be able to see how much you are paying each month if you get a statement, but if it is not obvious, then you can contact the lender to find out. If you consider how many months you have left to pay, then you will be able to work out the total amount of money that you will pay in interest over the whole term of the loan. Then you will be able to think about whether you think that it will be a good idea to repay it early and save the money.

Whether there is an Early Redemption Fee

With some loans there will be a fee to pay if you decide to repay it early and this is called an early redemption fee. This can vary between lenders and some may not have a fee at all and some could have a high one. It is really important to find out how much it is. This is because if it is really high, it might be cheaper not to repay the loan early, so you need to find it out and compare it with how much money you will save if you repay the loan early.

Whether you can Manage to Pay More

You will also need to think about whether you will be able to afford to pay more off. You do not want to be in a situation where you will need to borrow money using an overdraft or credit card then this could be a more expensive way to borrow the money so you need to be careful. You may need to change the amount that you are spending on other things to ensure that you have enough money to make these extra payments.

This could mean that you will have to budget. It is important for you to know how much money you have coming in and how much you normally spend and then you will be able to work out whether you will have enough. It could be a case of working out where you can reduce your spending and where you can earn more. This obviously sounds simple, but could be pretty tricky.

A good place to start is to compare prices on everything that you buy. If you check that you are not paying more than necessary, then you might be able to save money on a lot of things that you buy. Even a few savings here and there can add up. It is also good to ask yourself whether you need all of the items that you are buying and this should help you to buy less items. The money that you save, by not spending so much could be put towards paying off more of the loan.

Earning more might sound harder, but it may not be. There are lots of ways to get extra money and some are much easier than others. For example, you could sell things that you own and no longer want such as books, clothes and things like this. Although this will not bring in a regular income, it could bring in a lump sum of money that you could put towards paying off the loan. You could also do odd bits of work perhaps some temp jobs, freelance work or things like that. You could also consider renting out a room in your home, perhaps to a lodger, B&B guests or even for someone to store things in.

Categories
Budgeting

How Can I Stay in Control of my Money?

It can often feel that we are out of control when it comes to money. It can feel like we are paying out so much money for different things that there is never anything left or that we do not even know what the money is being paid out for. It is well worth making sure that you have more awareness and then you can start to control your spending more easily.

Keep Household Accounts

It is a good idea to keep household accounts, at least for a while. This sounds complex but it need not be. You can use either paper or a spreadsheet on your computer. Then note everything that you have coming in and out. So, when you get paid, note it down, when you buy something note it down. You will be able to use your bank statements to help you as well for any standing orders or direct debits. Once you have a full month you will be able to get a good idea of what money you normally have coming in and how much tends to be paid out each month. This will change month by month so it is also worth thinking about whether you will have some months that are significantly more expensive than others.

This might seem like a hassle but it will help you to find out exactly where every penny is being spent. This can allow you to start to see whether there are any places that you can start to control your money better. It might be that you have identified an area where you spend a lot of money that you feel you can cut down. For example, perhaps you buy a lot of chocolate bars and you could buy less, look after your health and save money. However, it is likely to be the bigger expenses that will be the ones that will have a bigger impact. For example, you will probably be paying out rent or mortgage, utilities, insurance and things like this that are big amounts of money. These are things that seem to take big chunks out of our current account and make us feel like we do not have a lot left. Therefore, it could be this sort of thing that we should be focussing on first as a few small changes could have a bigger impact. For example, switching to a cheaper insurer could save hundreds of pounds a year.

Compare Prices

Therefore, it can be a good idea to compare prices on lots of things. If we do this for everything we buy, starting on the big things, then this will enable us to be bale to start saving money right away. We could also do this on cheaper things as well, because small savings will all add up. By noting how much things cost, we will also be able to stay in better control because we will be fully aware of how much we are spending on things. This might lead on to us thinking harder about purchases and whether we should really be making them. We may look at a price and then think harder about whether we really think that the item is worth that much and decide that perhaps we do not want to buy it after all. Starting to think more about all purchases can be a good way to feel more in control. Knowing what direct debits and standing orders we have will help, as we will know what will automatically go out of the account. Then knowing what money is left will help us to know what we have left to spend and we can then think more carefully about the purchases we are making and whether we can afford them.