With the jackpot for this Friday's TOTO Hong Bao draw at $13.9 million, even those who typically never gamble at the Singapore Pools have now lined up in queues just to try their luck.

Including yours truly (haha!). While I did it purely for fun, this prompted me to look into the statistical odds of winning the TOTO.
Disclaimer: Before you jump to buy a TOTO ticket for the Hong Bao draw, take note that more people buying also means you'll be splitting the prize pot with more people for the same number, given the same probability. In other words, lesser winnings for each person.

Drawn by newspaper headlines of last Thursday's draw - which saw one person walking away with $9.5 million in winnings - many have headed forth to place their bets for this Friday's special Hong Bao draw. But are their hopes misplaced?

I certainly think so. You see, that solo winner had a 1 in 13,983,816 chance (i.e. 0.00000007151124 probability) to win that jackpot prize. If one more person had bought the same exact 6 numbers, the prize would have been split between both winners = $4.25 million.

How does TOTO work?

You pick 6 or 7 numbers from the numbers 1 to 49 and place your bet.

Buy 6 numbers = $1
Buy 7 numbers = $7

Tip: Statistically speaking, it is not worth buying a $7 ticket for just that one additional number. You'll be better off sticking to the normal $1 bet.

During the TOTO draw, 6 winning numbers and 1 "additional" number are drawn at random. Draws are held twice weekly on Monday and Thursday, and typically each game attracts $2.8 million from the population. The jackpot sum usually begins from $1 million.

As long as your numbers match at least 3 of the winning numbers, you win a prize.

How much can I win?

It depends on how many matching numbers you have. While the game isn't easy to win, the most likely scenario for most people would be to get 3 or 4 matching numbers, which pays out $10 - $25 in prizes per winning ticket.

The rest of the prizes are calculated as such:
Credits: Singapore Pools (I merged different tables together to give you this overview).

The "sure-win" strategy

Contrary to what the punters / "feng shui" masters / fortune tellers will tell you, there really is no definite strategy to win in TOTO.

The entire game is a game of chance, and your statistical probability of winning a significant amount is quite low. Even if you do win (on the rare chance), your winnings will probably not match up to the total amount you've spent betting on TOTO to date.

If you really want to increase your odds of winning some easy money, here's a better method: invest.

Instead of religiously spending $8 a week on a bet that you might never win, why not start off by putting aside as little as $100 a month into index funds?

For the uninitiated / beginners, this can be as simple as opening a POSB Invest-Saver account and put a monthly sum into buying a basket of Singapore's stocks - the ones that make up the Straits Times Index (STI). If you're unfamiliar with the STI, it is basically a major stock market index which tracks the performance of the top 30 companies listed on the Singapore Exchange, like DBS, SingTel and SingPost.

Spending $268 on 1 lot of the STI ETF would give you a small slice of the pie consisting of these top companies, with a total market capitalization of over $250 billion. Not too bad, right?

Of course, while the stock market doesn't guarantee you winning, buying stocks when they are cheap (hint: like now) and holding them over the long run has historically given most investors significantly high returns. The magic boils down to this amazing thing called compound interest, which grows your money over them.

I'm therefore convinced that your odds of making money from the stock market in the long run are much higher than winning the TOTO. What about you?

P.S. Having said that, I'll still be placing my bets ($10 from my hong pao money) into this Friday's draw, but I sure wouldn't count too much on my winning anything. Whatever comes will just be a good bonus surprise :)

With love,
Budget Babe