Some of my colleagues are insisting me to join a group of 10 colleagues ( namely, A, B, C,..., J) in a money rotation game. Each member has to deposit Rs 10,000 per month into a money pool. Amount deposited in the pool for each month will be Rs 1,00,000 and this amount will be credited to the account of one of the members based on lottery. Suppose, A wins the lottery for the first month then Rs 1,00,000 will be deposited to the account of A. The candidate A will not participate in lottery for the next 9 months but he will continue contributing to the pool. And so on. I have no idea as how to invest this amount so that we could get the maximum benefits out of this game. On other hand if i don't participate in this game and deposit Rs 1,00,000 in FD for one year, i will earn an interest of Rs 6,500. What is the maximum possible profit i can get from money rotation game? I am afraid if i have asked an inappropriate question? I am afraid, if i have asked an inappropriate question for this site.

  • I think this should be moved out of the meta and to the general discussion board. It also seems more like a math problem than a personal finance problem if you're including the stipulation that your investment return is 6.5% – Dugan Nov 14 '19 at 22:13
  • Sounds like gambling, which would make it off-topic. – Chris W. Rea Nov 15 '19 at 0:12
  • @Chris W. Rea In fact, it is not a gambling, but more like a recurring deposit, where every one will get their own money back without interest. The maximum time it will take to get one' s own money back is 10 months. – gete Nov 15 '19 at 1:52
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    What guarantee do you have that each winner will actually continue to play? And if such a guarantee holds, what is the point of playing? – chepner Nov 15 '19 at 20:23

There is a big risk:

The other participants might stop once they win, thus if you don't win early the game might stop before you win a month. If it goes six months without you winning and then then stops you have spent 60,000.

There can be legal issues if it is viewed in your jurisdiction as gambling, and that form of gambling is illegal. It might even involve money laundering. Making large cash deposits in some countries can be problematic and trigger additional scrutiny.

There can be tax issues.

Even ignoring all of this, the best way to maximize the return is to win early and hope that others lose interest before you have contributed as much as you have won. If the games goes to completion then those that won early make more interest than they would have with a lump sum, those that win late make less money, but as a whole it evens out.

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