It’s the wager, not the odds

Liverpool Football Club won the League Cup (I can’t keep up with the change of sponsors, so I just call it the league cup, much to my son’s amusement) last week. It was an entertaining 0-0 draw with both sides having goals disallowed for marginal VAR decisions. Liverpool won the penalty shoot-out 11-10. Liverpool are now 66/1 to win the quadruple of League Cup, FA Cup, League and Champions League. Something that has never been done before and unlikely to be done this season either.

It’s the wager, not the odds

What has Liverpool Football Club winning the quadruple got to do with personal finance? It is a great illustration of how investments and returns work. Say I put €1 on at 66/1 and Liverpool win the quadruple. I win €66. A nice return but it’s not going to get me much. If I put €100 on, I win €6,600. Again, a nice amount but it’s not going to make a big difference to me. If I put €1,000 on, I win €66,000. Now we can do something with that; pay off car loans, cover future education costs, take a decent chunk off the mortgage.

While the odds were great, it is not until you put a decent amount of money on that the returns will actually make a difference to you. It is the same with saving for your retirement.

The minimum amount you can contribute to a pension is €10 a month. If you contributed €10 a month to a pension for 40 years and it returned 10% each year for all that time, you would have €55,503 at the end.

If I had contributed €100 a month and got 5% per annum. I’d still end up with €148,252, despite earning half the return over such a long period of time.

What about if I contributed €1,000 a month but only got a third of the returns, 3.33%? You’d end up with €990,404.


When it comes to pensions, we can spend too much time looking for the fund with the best return and not enough time on how much we contribute. The thing is, returns are completely out of our control whereas we have total control over how much we save.


Steven Barrett

07 March 2022