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

Sooler

Estimator1 wrote: »

Therefore for anything less than £675, you would lose out.

I would seriously question that - losing out on what?

Does the decision have to be based solely on monetary value? May be if you have a specific monetary purpose for the guaranteed 1000 or your life is ruled by money – but how about living and enjoying life, why not consider a lesser amount now and do something with it … so what if you’ll be 50p worse off, or £500, or £325 – is it worth the wait?

fuzz

Diesel44 wrote: »

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.

LOL :rotfl: that made me laugh out loud as I thought exactly the same....the government is a joke and if I was any dafter I would refuse to vote....but I have to force my self to "try and make an informed decision"

£750 now is definitely a go-er and if you like me squirrel it away for 10 years then its a bonus too

pinkclouds

Reading the poll as "what is the lowest amount I wouldn't say no to" (instead of waiting 10 years), then I selected £250. The smaller amounts are too trivial, for want of a better word. After all, £150 might represent 2 lots of groceries - hardly life changing. To me, £250 represents the sort of amount that I'd be loathe to spend and glad to save. While £1,000 is a much larger amount, it's still not life changing so, 10 years is a long time to wait and the control freak in me would rather have the instant gratification.

Renya

£1,000 in 10 years time, I'd probably be a hard up trainee journalist, so I'd defiantly need the money

[Deleted User]

I thought that this question was crystal clear - it's basically 'what is your price to surrender (now) a guaranteed £1000 in 5 years' time?'

Even allowing for inflation, I went for £500, because that's worth more to me at this stage in my life than £1000 is likely to be in 5 year's time. It's not just about RPI, but also looking at it from the perspective of 'relative to what I earn'. I'm hoping that £500 is a bigger percentage of my take-home pay today than £1000 is in 5 years.

[Deleted User]

Incidentally, reading other people's responses, this is exactly the scenario contestants face in Deal or No Deal, even if they don't know it.

The question ultimately comes down to 'what would I be happy to gain VS what would be happy to lose?'. If I have a deal of £250 then I'd be more happier winning a thousand pound than I would be sadder by going away with nothing.

JasX

All comes down to what your percieved cost of money is these days.

if you took the £50 today you'd need a 35% return after tax to have it grow to £1000 in 10 years.
-if you have debts costing you more than this and could use the money to pay them off and avoid incurring in excess of 35% APR over the 10 years your threshold is likely to be lower.

I took my 'cost' of money as my mortgage rate since thats my biggest source of borrowing I'm trying to pay off (at around 5%) for me this makes the breakeven point a little over £600.

The poll is probably skewed by not having many options between £500 or £750. Yes probably if I put the £x into a good fund i could beat 5% over 10 years and get closer to the £500 mark perhaps, but i erred towards £750 for the time being....

JasX

Deleted_User wrote: »

Incidentally, reading other people's responses, this is exactly the scenario contestants face in Deal or No Deal, even if they don't know it.

I wasn't aware the time value of money came into 'Deal or no deal', i think you missed the point

michaels

To make it really interesting the sample could be split in two and half asked the question as posted and the other half asked how much they would sell a £bond paying 1k on maturity in 10 years time for that they already have. Behavioural economic research suggests that answers will differ.

kerri_gt

I'd take the max I could now please - I don't believe in such thing as a 'rock solid government guarantee' in 10yrs time there will no doubt be a diff governement or even if it's the same, they will find some way of going back on their word.