Can Investing Give You the Returns That the Lottery Likely Never Will?

Key Points

• Playing the lottery will lose money most of the time, whereas the stock market rises most of the time.

• Even investing in the worst S&P 500 stock in 2024 was better than the average lottery ticket return, and that stock has bounced back in 2025.

• These 10 stocks could mint the next wave of millionaires ›

The jackpot for the Powerball lottery is sitting at a whopping $1.4 billion, as of this writing, which is already the fourth-largest jackpot it's ever offered. If there is no winner in tonight's (Sept. 3) drawing, the jackpot has real potential to grow to be near the largest jackpot ever ($2.04 billion in November 2022).

That's a jackpot that almost anyone would love to win.

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Considering it only costs $2 to play, many people purchase lottery tickets in hopes of winning it big. After all, it seems worth it -- take an immaterial amount of money to have a chance at winning a life-changing sum. What's not to like?

However, in this article, it's worth exploring the concrete reasons why investing in stocks can give you the life-changing returns that the lottery (probably) never will.

Image source: Getty Images.

The odds are stacked

According to Powerball, the overall odds of winning a prize are about 1 in 25. And the prize with the best odds is the lowest prize at $4. In other words, one would need to spend about $50 in lottery tickets just to hope to win something. And chances are you would only win $4.

Put a different way, the most likely outcome is that someone playing the lottery would spend $50 and be left with $4. In investing terms, this would amount to a loss of over 90%.

Sure, it's possible to beat the odds. There are people who win it big on the very first try. But it's statistically improbable. Moreover, there isn't anything a person can do to improve their odds -- beating the odds would just be dumb luck. And luck isn't a repeatable process. Therefore, if a person continues to play the lottery, their returns will eventually get closer and closer to the overall odds of the game.

Isn't the stock market just a casino?

The lottery and the stock market have one thing in common: The future is uncertain. But I believe the similarities end around there. At a casino, the odds are stacked against the gambler -- the house always wins, as they say. But in the stock market, the odds tend to be stacked in investors' favor.

Consider that the S&P 500 has gained about 10% annually for over 50 years. And the market is up more frequently than it's down. If a casino offered a game that won more than it lost, gamblers would line up to play -- especially if their money increased by 10% on average, even after factoring in their losses.

A simple way for investors to win this "game" is to just put money into an S&P 500 index fund, which will earn the same as the index, minus any fees.

Consider that the average American spends $321 annually on lottery tickets, according to Motley Fool research. Over 50 years, that's just over $16,000. As mentioned previously, the odds are high that lottery players will lose more than 90% of this. In other words, they'd only have around $1,600 with this approach.

By contrast, if an investor put $321 in an S&P 500 index fund and added $26.75 monthly (which works out to $321 annually) for 50 years, this would be worth over $400,000, assuming a 10% annual return. That's not a typo.

It gets better

The above example is what could happen if an investor simply settled for average returns. But picking individual stocks could allow for above-average returns.

This is where some might say that the market is a casino. But I disagree. Consider that the worst stock in the S&P 500 in 2024 was Walgreens Boot Alliance (NASDAQ: WBA), which dropped 61% for the year. So even if one only purchased one stock, and it happened to be the worst possible choice, it would still be better than a lotto ticket.

Moreover, a total loss in the stock market is rare, and Walgreens wasn't a total loss. In fact, Walgreens' stock is up 28% in 2025. But lottery tickets lose 24 out of 25 times and don't give you a second chance.

Meanwhile, top stocks in the S&P 500 can return much better than this in a given year. For example, shares of Palantir Technologies (NASDAQ: PLTR) have more than doubled in 2025. And by learning to identify good opportunities, it's possible to pick above-average stocks such as this more often than not.

In conclusion, the odds are you will never become wealthy by playing Powerball -- I'm sorry to say. But the odds of achieving life-changing wealth are high if one invests in stocks over a long period of time. It's rare to find a lottery winner among the top 1% of wealthy Americans. But wealthy Americans do understand the power of investing, considering they own over half of the stock market's value.

It may not be as exciting as winning a billion-dollar jackpot. But it's smart to double down on investing -- where the odds are at least somewhat stacked in your favor.

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Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.