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MSE_Martin wrote: »m3 Sussex, I think your win is very interesting if we look at it on the Probability Calculator
It shows theres a 0.33% chance of someone with 30k winning over 10k. ...The problem with premium bond distribution is that for everyone who substantially outperforms the interest rate, (in your case roughly 33% interest for the year) many more need to underperform.
The chances of M3_Sussex now joining the ranks of those whose bonds underperform must now also be very very high. If there's a 1 in 300 chance of doing what s/he's done then there must be a 1 in 90,000 chance of doing it again next year, which is as good as none.
I recommend that you take the money and run to the bank with it. Statistically, you've had your run of luck and it's time for you to start paying for someone else's...;)0 -
westernpromise wrote: »The chances of M3_Sussex now joining the ranks of those whose bonds underperform must now also be very very high. If there's a 1 in 300 chance of doing what s/he's done then there must be a 1 in 90,000 chance of doing it again next year, which is as good as none.
I recommend that you take the money and run to the bank with it. Statistically, you've had your run of luck and it's time for you to start paying for someone else's...;)
But if M3_Sussex wins nothing over the next four or five years, which is highly unlikely, it is still a very good gain and even better if you save the 10K in a high interest account.0 -
Technically, conditional probability doesn't work like that. The chance of someone having £30k in bonds and winning over £10k twice in a row is 1/90000, true, but the chance of doing it next year based on having already done it this year? 1/300 again.westernpromise wrote: »The chances of M3_Sussex now joining the ranks of those whose bonds underperform must now also be very very high. If there's a 1 in 300 chance of doing what s/he's done then there must be a 1 in 90,000 chance of doing it again next year, which is as good as none.
I recommend that you take the money and run to the bank with it. Statistically, you've had your run of luck and it's time for you to start paying for someone else's...;)
Same's true with the lottery. If you win the jackpot one week, you're equally likely to win it again the next week if you play with the same numbers.I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
I don't like to be called a "liar" and please do tell me where you can get a net High Street rate of 6.25%
Hey I didnt call you a "liar" but if the cap fits......
Now to some facts..
6.25% on the High Street - no problem - Northern Rock Silver Savings - and its linked to the base rate so unlike your winning AMOUNTS on the bonds, my interest has gone up twice already to this point and will go up again if interest rates are raised again. I have also seen a 6.5% bond if you are willing to leave your money in for a year. This is money guaranteed and I do believe there are more rates like this out there - oh yes it is 6.25% on whatever you put in and its not capped at some small amount like some accounts are. Yes that is before interest but what happens when you BANK the winnings out of your bonds - oh yes you pay interest dont you?
You and M3 Sussex ( HELLO by the way - I'm back!) appear to have been very lucky. Now lets see what happens to you both over the next twelve months as luck unlike interest is hit and miss and I really dont see lightning striking twice......
Bye Bye bonds...................0 -
tightwadman wrote: »This is money guaranteed and I do believe there are more rates like this out there - oh yes it is 6.25% on whatever you put in and its not capped at some small amount like some accounts are. Yes that is before interest but what happens when you BANK the winnings out of your bonds - oh yes you pay interest dont you?
I'll assume you mean before tax and not before interest as you posted above.
However 6.25% is 5% net (BRT) or 3.75%(HRT) net. It's still not 6.25% net.
Banking the winnings and paying tax is the same as banking the interest and paying tax. You have to compare like with like.
As the winnings from Premium Bonds is tax-free that is what you compare. So basically if you can get more than 5%(BRT) or 3.75%(HRT) from winnings on Premium Bonds then you are getting more than the highest High Street account.
Now I'm not advocating Premium Bonds as you'll see from my post above. They are more more attractive for a higher rate taxpayer but it is still a gamble. For me, even as a higher rate taxpayer, the return was poor so I've moved the money elsewhere and hope that over the long term this will be better.0 -
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I'd love to know what is the most probable way of becoming a millionaire given an investment of £1000
1,000 invested at birth achieving a return of 9% after inflation and living until you're 80 years old. If you want it when retiring at 68 it would take 10.7%. If you're willing to start with 2,000 it takes 9.6% after inflation to do it in 68 years.
Starting at 21 with 1000 and retiring a millionaire at 55 takes 22.6% a year for 34 years if you don't add any more money. You'd probably need 2000 to do it - that takes 20.1% and that's achievable.
If you're 21 now and have 7000 in a stocks and shares ISA and want to retire with a million at 55 you need 15.7% and that's definitely achievable.
Less time? Try next year's maximum 600 a month in a stocks and shares ISA and get 10% after inflation or more and do it in 27 years. But this is more than a thousand.
Even less time? Raise the risk level with more emerging markets and other high growth areas and you can do it with 600 a month in 10 years at 41%.0 -
tightwadman wrote: »
Frankly the experience has made me hugely cynical and I dont believe there are in fact any winners of the big prizes. I have seen no evidence and the winner is always anonymous. Surely by now someone would have come forward to explain what they did with their mill ?
:eek: :eek: My experience of investing £20K in PBs in quite small units is much the same as Tightwadman's. I expected the returns to be approximately in line with the 3.4% quoted by NS&I but they have fallen far, far short. I begin to wonder if the post code of the holder is a factor in their probability of success. It wouldn't be difficult for NS&I to implement this if requested by the Government.
I understand that the names of major prize winners is not published but would it be possible to know the short post codes of all the winners of major prizes in any month? An analysis of this would soon reveal if there was any post code favouritism taking place.
:eek:0 -
Frankly the experience has made me hugely cynical and I dont believe there are in fact any winners of the big prizes. I have seen no evidence and the winner is always anonymous. Surely by now someone would have come forward to explain what they did with their mill ? :eek: :eek: My experience of investing £20K in PBs in quite small units is much the same as Tightwadman's. I expected the returns to be approximately in line with the 3.4% quoted by NS&I but they have fallen far, far short. I begin to wonder if the post code of the holder is a factor in their probability of success. It wouldn't be difficult for NS&I to implement this if requested by the Government. I understand that the names of major prize winners is not published but would it be possible to know the short post codes of all the winners of major prizes in any month? An analysis of this would soon reveal if there was any post code favouritism taking place. :eek:
Pure conjecture - and nonsense, all the times you aren't winning, others are. I win regularly almost every month. Albeit small prizes (2 x £100 this month, which I'm pleased with!)
Now you say you don't hear of the winners of big prizes, perhaps you aren't looking or reading in the right places?! Why not visit http://www.thisismoney.co.uk and go a search for PBs.
Many wish to remain anonymous, and I don't blame them, look at the crazy hype some more lottery winners got.
A couple of PB millionaire stories, with quotes from the winners.
Oct 06: Man from Cheshire. A man from Cheshire and a woman from Edinburgh are Britain's newest millionaires, after taking the jackpot in October's Premium Bonds draw.
Link: http://www.thisismoney.co.uk/saving-and-banking/article.html?in_article_id=413230&in_page_id=7
April 07: Two more Bond Millionaires."...The lucky pair become Ernie's 180th and 181st Premium Bond millionaires. The winner from Hounslow - who has chosen to remain anonymous - said: 'My parents suggested I use the auto reinvest option on my Premium Bonds so that any prize money goes straight into my savings rather than being tempted to spend it. It seemed like a good idea but now one of the Bonds won the £1m it seems even better...."
Link: http://www.thisismoney.co.uk/saving-and-banking/article.html?in_article_id=419019&in_page_id=7
Aug 07: £1M Jackpot goes abroad
Link: http://www.thisismoney.co.uk/saving-and-banking/article.html?in_article_id=422935&in_page_id=7
Many more stories, just do a Google!
And you can see there is obviously not a postcode lottery or not by looking at the high prize win allocations: http://www.nsandi.com/products/pb/winnerlist.jsp
Myth quelled :cool:0 -
It would be lovely if they split one of the £1 million prizes and made four £250,000 prizes instead, I believe.
Thats only 4 extra prizes. Why not split it ten ways or even a hundred ways? I'm sure there are people like me who arn't greedy but would like the CHANCE of a regular return of smaller prizes. The more prizes there are, the greater the chance of a Bond winning one of them.0
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