Tuesday, 6 March 2012

Five boring ways to make a million

Last week, a friend of mine bought two £2 tickets for last Friday's EuroMillions draw.

When I asked him what chance he had of winning the jackpot, my friend replied "one in 10 million, something like that."

In fact, the exact odds of picking all five main balls (numbered from one to 50) plus the two Lucky Stars (numbered from one to 11) are 116,531,800 to one. With two non-identical tickets for the same draw, these odds halve to 58,265,900 to one.

Nevertheless, despite these astronomical odds, one British punter did strike it lucky on Friday, winning £46.4 million, but chose to remain anonymous. This is the sixth-largest payout to British EuroMillions winners, and comes just weeks after UK wins of £45.2 million and £40.6 million. Alas, my chum wasn't Friday's lucky winner!

A random route to riches
Since Camelot launched the National Lottery in November 1994, it has created more than 2,800 millionaires across the UK, including a record £161,653,000 EuroMillions windfall on 12 July 2011. In other words, in more than 17 years, these draws have created an average of three millionaires each week.

Despite creating many millionaires, both the National Lottery and EuroMillions are poor ways to get rich, because they pluck winners randomly from among millions of punters. What's more, only half of our ticket money is returned in prizes. Brits collectively lose £2.8 billion a year by playing these games of chance.
Five paths to prosperity
However, there are several tried and tested ways of building wealth without trusting to dumb luck. By studying rich lists from the UK and US, I've picked out five recognised roads to riches:

1. Inheritance
Some of the wealthiest people in Britain are merely caretakers of their family dynasty, having inherited vast fortunes from their parents or other relatives.

For example, Gerald Cavendish Grosvenor, sixth Duke of Westminster, was fourth on the Sunday Times Rich List 2011. His Grace's family fortune of £7 billion consists mostly of ancestral estates and prime London property inherited from his father, the fifth Duke.

Likewise, Charles Gerald John Cadogan, eighth Earl Cadogan, is another aristocratic landowner. His fortune of more than £2 billion includes huge swathes of land, including large chunks of Kensington and Chelsea.

Given that 50% of all UK land is owned by just 0.8% of our population, very few of us will inherit estates valuable enough to catapult us into the rich lists, sadly!

2. Start a business
Of all the ways to build significant wealth, starting or owning a business seems to offer the best odds of success. Of the 1,000 richest people listed in the latest Sunday Times Rich List, more than half made their money by starting or joining a family business.

Indeed, among the ranks of the super-wealthy, there are a number of self-made businessmen and women. These include billionaires Sir Philip and Lady Tina Green, estimated to be worth £4.2 billion. Sir Philip started work at 15 and his family now owns a string of high-street chains, including BHS, Arcadia and Topshop.

Another self-made British businessman is Sir Richard Branson. The 61-year-old has leveraged his Virgin brand into a sprawling business empire encompassing trains, airlines and mobile phones. Sir Richard -- one of the UK's most popular and recognisable entrepreneurs -- is said to be worth over £3 billion.

Sir David and Sir Frederick Barclay are billionaire brothers who built up their fortunes via property, hotels and newspapers. Today, the reclusive twins, best known for their ownership of the Telegraph Media Group, are said to be worth more than £2 billion.

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