# '£50 now or £1,000 in ten years?' poll discussion

Former MSE Posts: 975 Forumite
edited 20 April 2010 at 9:12AM
Poll Started 20 April 2010:

£50 now or £1,000 in ten years?

Are you focused on short term or long term cash? Suppose you were offered the following choice (with a rock solid government-backed guarantee that provided you’re still alive you’ll get the cash).

If the alternative was £1,000 in ten years time, please select the FIRST you’d be willing to take.

A. £10 now
B. £50 now
C. £150 now
D. £250 now
E. £500 now
F. £750 now
G. I’d wait to get £1,000 in 10 years' time.

• Forumite Posts: 444 Forumite
I am not sure everyone understood the question..
Over 40% people voted for £750 now.. I don't think those 40% will say they don't need "£500 now" instead of "£1000 in 10 year time".
• Forumite Posts: 3,808 Forumite
Short term is a relative concept - I would quite happily wait, say, a few months to get the £500 rather than taking it now. To me, anything within a year is 'short term', a year to five years is 'medium term' and beyond that is 'long term'.

Then again I suppose it depends how much you need the cash as to what you'd take when. I went for £500 now as that would help out my 'saving to move to London' fund massively, but the £1000 in ten years would probably end up in savings as well, so how much difference it makes to me personally I'm not sure.

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• Forumite Posts: 17 Forumite
If you factor in inflation at say 3% on £1,000 in 10 years in would be the equivalent of £740 today and therefore, I voted for F.
• Forumite Posts: 11,828
Forumite
£750 today.
• Forumite Posts: 4,381 Forumite
To prefer £10 now you would need a discount factor of over 58%, but to prefer £750 now it would be 2.92%. So if you think annual inflation would average more than this you should certainly go for option F. Option E (£500) has an internal rate of return of 7.2% compared with G, so I would rule out A to E.

I'd almost certainly go for £750 now.
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• Forumite Posts: 19,868
Forumite
edited 21 April 2010 at 6:16PM
Assuming I could manage to make a 5% return each year by investing it, then £614 would give me approximately £1000 in 10 years time, so I'd accept anything over this to save the hassle of investing.

(Thus the only option was the £750 NOW option)
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• MoneySaving Expert Posts: 8,273
Money Saving Expert
Interesting readin - i will try and clear it up so everyone understands its the first option.

I note the analysis above - but what about the

A. I need it now feelings some will get (especially those who it could help clear debt)
B. The risk of dying before the payout if you wait.
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• Forumite Posts: 20,861
Forumite
I am taking £500 now as I reckon I could double it in 10 years. Thus making it the more financially viable option!

I don't need it now, I just would like it as its the obvious choice for me.
• Forumite Posts: 623
Forumite
Who in their right mind would turn down £750 now.
Anything government backed must be unreliable. I think I would take now and £750 was one of the choices so whats wrong with taking £750 now, why wait 10 years for an extra £250.
• Forumite Posts: 6,343 Forumite
The poll needs to be more spread out.

You have a massive gap of 10 years between F. and G.
£500 now or £750 now, taking £500 is losing you £250 for no reason at all.
If the opens were more like £10 now, £20 in 3 weeks, £50 in 2 months, £100 in 6 months etc. It makes more sense.
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