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

Sooler

Diesel44 wrote: »

Who in their right mind would turn down £750 now.

The question is what is the lowest amount you would take.

Would you turn down £500?
Would you turn down £250?
Would you turn down £150?
etc.

ragz_2

If I was asked this 2 days ago I would have answered that I'd rather £1k in 10 years as I may be able to do something useful with that (though that's assuming 1k is worth much then!
However my husband's tools and therefore livelihood were stolen yesterday and even £500 would be a great help right now.

THough the gap between £750 and £1k doesn't seem that great over 10 years so maybe I'd have gone for the £750...

rpb

Sooler wrote: »

I think the results skewed to £750 show how many people vote with their eyes rather than their head :rotfl:

I think it may be the complete opposite. For lots of people who are planning for their futures, £750 is the obvious choice.

£750 would *almost certainly* be worth more overall than £1000 in ten years' time.

£500 would be worth around the same as the £1000 IF you could GUARANTEE over 7% growth every year for the next ten years. Alternatively you could get the equivalent of over 7% growth RISK FREE by taking the £1000 instead of the £500.

So unless you're struggling and desperate for money, or take a shorter-term view of your finances and would rather have now than have more overall, then £750 is the logical answer for many people.

Estimator1

£1,000 in ten years, would be worth £675 now if you banked it at 4% for the ten years (or de-escalated the £1,000 at 1.04 to the power of 10).
Therefore for anything less than £675, you would lose out.

Maybe I'm missing the point here, it seems too simple a question to ask???

Diesel44

Sooler wrote: »

The question is what is the lowest amount you would take.

Would you turn down £500?
Would you turn down £250?
Would you turn down £150?
etc.

The lowest amount would be the most offered eg £750
I have a 4 years left on my mortgage and our endowment is short by £11,000 so 10 years is no good to me.
I should have put my example in my earlier post.

beer_tins

Sooler wrote: »

I think the results skewed to £750 show how many people vote with their eyes rather than their head :rotfl:

I'm not sure I agree. £750 now is the best value, as it will be worth more than £1000 in ten years as long as you invest it at 3% or better (or overpay your mortgage, say).

chardir

I went for £500 now. If it's purely a question of interest/inflation rates then £750 is the obvious answer, but it's not. It's a question of what is more useful, money now or more money later. I took the optimistic view that in 10 years I will be richer and more financially secure (salary rise, cumulative savings etc) so £500 now is more valuable.

chardir

Diesel44 wrote: »

The lowest amount would be the most offered eg £750

No, the question is not which amount would you take. The question is: What is the minimum you would take now rather than £1000 in 10 years time?

Sooler

The question is flawed or not clear – there isn’t a range of offers to take now.


You have to consider each option in isolation …

If the offer was 150 now or 1000 later – would you take 150 now?
If the offer was 250 now or 1000 later – would you take 250 now?
If the offer was 500 now or 1000 later – would you take 500 now?

Answer the poll by voting for the lowest offer you would say yes to.

Bad_Ash

Estimator1 wrote: »

£1,000 in ten years, would be worth £675 now if you banked it at 4% for the ten years (or de-escalated the £1,000 at 1.04 to the power of 10).
Therefore for anything less than £675, you would lose out.

Maybe I'm missing the point here, it seems too simple a question to ask???

I don't think it was a question to test your maths or investment skills.

There are a host of other factors, such as where you are on your career path (at the beginning/student or at a glass roof with nowhere to go for 10 years) or family life, etc.