Greta Zarembien?, Head of Investor Relations at crowdfunding platform Röntgen
The figures for the Lithuanian lottery and gambling market are shocking: last year alone, we lost almost EUR 300 million. Even more interestingly, we spent as much as €2.6 billion on tickets and bets, so this €300 million is a net loss for gamblers. What if we invested these millions or even billions instead of "spending" them?
As Lithuania has become more vocal about the gambling sector this year, it is interesting to look at and compare its statistics. According to the data of the Gambling Supervisory Authority, last year Lithuanians paid EUR 2.6 billion in lotteries, casinos and bets, won EUR 2.3 billion and lost almost EUR 300 million. In other words, on average, one euro spent on gambling generated a loss of around 11%.
Although we sometimes hear about record jackpots and the greater or lesser success of acquaintances, these are mere coincidences, always offset by even greater losses for other gamblers. Of course, a large proportion of occasional gamblers are probably aware of the mathematically programmed unfavourability of "luck", so that for those few euros they are likely to buy an expectation, a dream, a sense of hope or simply entertainment.
But imagine what would happen if, instead of losing these billions, we invested them in time-tested instruments: deposits, buy-to-let housing, shares, bonds or crowdfunding. With interest rates as low as 5% per annum, the more than half a billion Lithuanians "bet" on gambling and lotteries would translate into as much as €130 million in earnings. And it would be virtually guaranteed, i.e. it would not depend on chance, and it would reach every single person who invests.
The 5% return in this example is a convenient average: in the bond or real estate crowdfunding sectors, it is now possible to earn up to 11% fixed interest per annum by pledging valuable assets as collateral for the benefit of the investor. In this case, the EUR 2.6 billion would be secured by collateral in the form of an asset collateral. We would not generate a loss of €300 million on the €2.6 billion "money Lithuania has built", but rather an income of almost €300 million. And within three years, by reinvesting the interest, we would already have a profit of almost a billion euros.
To put it another way, the average Lithuanian spent €1,000 on gambling last year and lost over €100, but by investing this money, depending on the instrument chosen, it would have been possible to earn €30-110 or even more per year.
So why do Lithuanians deliberately choose the mathematically unprofitable path and remain among the most passive investors in Europe?
If gambling is seen as a casual, non-addictive pastime, the point of which is to acquire a temporary dream, a diversion and a microscopic chance of getting rich quick, this is perhaps partly understandable. A few euros spent on a lottery ticket will not change the quality of life for many people, and dreaming about a life of winning the jackpot for a week can be just plain fun. But as we know, the reality is different: only individuals win large sums of money.
The dream of getting rich quick partly explains why we do not invest. A return of €30, €50 or €100 a year on €1,000 does not seem life-changing to many. Even if these returns are positive, above inflation and virtually guaranteed. But this is where the great myths of "non-investors" lie.
First of all, many people have far more capital than a thousand euros. If you can invest tens of thousands of euros, even conservative investment vehicles will generate several hundred, not several thousand, a year - a significant amount for entertainment, household needs or children's education.
Secondly, a 5-10% annual return becomes much more powerful than it looks on the surface if we invest continuously, over longer periods and reinvest the returns. Thanks to the so-called compound interest effect, the share of earnings in an investor's portfolio grows faster each year and can surpass equity in less than two decades.
The myth of a lack of knowledge and skills is probably not worth expanding on - unbiased information about the various investment instruments is more abundant than ever. It is just a matter of willingness and minimal effort.
One can only wonder, therefore, that instead of earning nearly 300 million a year, we are simply losing out, and only one other lucky person becomes a millionaire by chance.
There is something else that is striking about these figures: our financial success is largely determined by how we handle the money we have in our lives. It's not even the amount of income or knowledge, but the way we behave. The world is full of examples of bankrupt celebrities or other millionaires who simply squandered their wealth irresponsibly. Conversely, there are many true stories of modest people who lived, saved and perhaps invested even a small part of their income and died with a very solid capital.
The decision to (un)gamble or (un)invest is therefore up to each of us. Dreams of quick results are humanly understandable, but success really does favour the patient and the consistent. Those who not only build up their savings for a rainy day or for financial stability year after year in a purposeful way, but also start to indulge in more and more pleasures as time goes by.
Greta Zarembien?, Head of Investor Relations at crowdfunding platform Röntgen
The figures for the Lithuanian lottery and gambling market are shocking: last year alone, we lost almost EUR 300 million. Even more interestingly, we spent as much as €2.6 billion on tickets and bets, so this €300 million is a net loss for gamblers. What if we invested these millions or even billions instead of "spending" them?
As Lithuania has become more vocal about the gambling sector this year, it is interesting to look at and compare its statistics. According to the data of the Gambling Supervisory Authority, last year Lithuanians paid EUR 2.6 billion in lotteries, casinos and bets, won EUR 2.3 billion and lost almost EUR 300 million. In other words, on average, one euro spent on gambling generated a loss of around 11%.
Although we sometimes hear about record jackpots and the greater or lesser success of acquaintances, these are mere coincidences, always offset by even greater losses for other gamblers. Of course, a large proportion of occasional gamblers are probably aware of the mathematically programmed unfavourability of "luck", so that for those few euros they are likely to buy an expectation, a dream, a sense of hope or simply entertainment.
But imagine what would happen if, instead of losing these billions, we invested them in time-tested instruments: deposits, buy-to-let housing, shares, bonds or crowdfunding. With interest rates as low as 5% per annum, the more than half a billion Lithuanians "bet" on gambling and lotteries would translate into as much as €130 million in earnings. And it would be virtually guaranteed, i.e. it would not depend on chance, and it would reach every single person who invests.
The 5% return in this example is a convenient average: in the bond or real estate crowdfunding sectors, it is now possible to earn up to 11% fixed interest per annum by pledging valuable assets as collateral for the benefit of the investor. In this case, the EUR 2.6 billion would be secured by collateral in the form of an asset collateral. We would not generate a loss of €300 million on the €2.6 billion "money Lithuania has built", but rather an income of almost €300 million. And within three years, by reinvesting the interest, we would already have a profit of almost a billion euros.
To put it another way, the average Lithuanian spent €1,000 on gambling last year and lost over €100, but by investing this money, depending on the instrument chosen, it would have been possible to earn €30-110 or even more per year.
So why do Lithuanians deliberately choose the mathematically unprofitable path and remain among the most passive investors in Europe?
If gambling is seen as a casual, non-addictive pastime, the point of which is to acquire a temporary dream, a diversion and a microscopic chance of getting rich quick, this is perhaps partly understandable. A few euros spent on a lottery ticket will not change the quality of life for many people, and dreaming about a life of winning the jackpot for a week can be just plain fun. But as we know, the reality is different: only individuals win large sums of money.
The dream of getting rich quick partly explains why we do not invest. A return of €30, €50 or €100 a year on €1,000 does not seem life-changing to many. Even if these returns are positive, above inflation and virtually guaranteed. But this is where the great myths of "non-investors" lie.
First of all, many people have far more capital than a thousand euros. If you can invest tens of thousands of euros, even conservative investment vehicles will generate several hundred, not several thousand, a year - a significant amount for entertainment, household needs or children's education.
Secondly, a 5-10% annual return becomes much more powerful than it looks on the surface if we invest continuously, over longer periods and reinvest the returns. Thanks to the so-called compound interest effect, the share of earnings in an investor's portfolio grows faster each year and can surpass equity in less than two decades.
The myth of a lack of knowledge and skills is probably not worth expanding on - unbiased information about the various investment instruments is more abundant than ever. It is just a matter of willingness and minimal effort.
One can only wonder, therefore, that instead of earning nearly 300 million a year, we are simply losing out, and only one other lucky person becomes a millionaire by chance.
There is something else that is striking about these figures: our financial success is largely determined by how we handle the money we have in our lives. It's not even the amount of income or knowledge, but the way we behave. The world is full of examples of bankrupt celebrities or other millionaires who simply squandered their wealth irresponsibly. Conversely, there are many true stories of modest people who lived, saved and perhaps invested even a small part of their income and died with a very solid capital.
The decision to (un)gamble or (un)invest is therefore up to each of us. Dreams of quick results are humanly understandable, but success really does favour the patient and the consistent. Those who not only build up their savings for a rainy day or for financial stability year after year in a purposeful way, but also start to indulge in more and more pleasures as time goes by.
Related notifications
Ready to invest?
INVEST NOW
UAB Trečia diena, valdanti platformą Röntgen, yra licencijuota sutelktinio finansavimo platforma. Platformos veiklą reglamentuoja ES Sutelktinio finansavimo reglamentas, o veiklos priežiūrą įstatymų numatyta tvarka vykdo Lietuvos bankas.