£500 today or £1,000 in two years?

jamesd

Emotional pressure is my summary of the reason given in past reports for why those who are poor are more reluctant to invest than those who aren't, which causes those who are poor to improve their position less than those who aren't.

It would be interesting to know how the ability to get the £500 at any time during the two years might change the answer.

ryantcb

If we knew what to do we wouldn't be on moneysavingexpert.com

Poosmate

I would take the £500 now. I am able to get £500 now quite easily from other sources but I'd have to pay interest on it, or I could cash in some premium bonds. I don't want to do either of those. The £500 I could easily get is my emergency money. My pb's are my extreme emergency money.

I think I'd pay some of my debt off, my current plan being to get the minimum payments down so that I am in a better position to manage when the mortgage interest rates go up. If push comes to shove I may have to drop my debt payments down to minimums for a while - I can live with that. I would find it very distasteful to have to go further in to debt to see me through another recession, that would just be soul destroying!

I say "think" because I have to MOT my new old banger later this year which scares me as I'm almost certain it's current MOT is "dodgy"! I do put money aside for car tax, MOT and insurance but the MOT's are sometimes scary and more than I've saved so I have to use my pocket money (disposable income) then go without stuff during the next month or so.

Nah, I just made up my mind. I'd pay it all to my debt. A bad MOT can be sorted through going without treats or using emergency money. The reduced minimum payments on my debts would give me extra leeway as soon as I pay it off the debt and the peace of mind that brings is priceless.

See, taking the £500 now can beat the £1000 hands down emotionally! lol

Having said all that, I would definitely wait 2 years for £10k.

Poo

Meatballs

Current personal circumstance: buying a house. £500 would help now to get the things we need paid or act as a bit of backup stash.

If we were happily moved in I'd take the £1000 in 2 years.

tara747

£1,000 in 2 years for me too, I'm gobsmacked at the results!!!!

I'd be interested to know how many people who chose the £500 were in dire financial straits (I'm assuming all). This is totally understandable. But I would find it hard to imagine someone choosing £500 if they were comfortable financially.

Fascinating debate anyway, thanks Martin.

tgroom57

tara747 wrote: »

I'd be interested to know how many people who chose the £500 were in dire financial straits (I'm assuming all). .

This is actually my biggest gripe. People make too many assumptions (including me )
I'm assuming that for many of you it is just an exercise in numbers.

Mobeer

I would take the £500 now.

Of the two options, the £1000 is worth so much more, the only reason it would be offered is if the company thought they could weasel out of paying in the future. On that basis, a certain £500 is better than an unlikely £1000.

MSE_Martin

Just to note the question was deliberately written so the company surety is not an issue. So saying "not sure it'd pay out" is not part of this - there is no credit risk

Joe_Bloggs

If the 'double your money in two years' was offered to me I would think it's a 'Ponzi' scheme or maybe worse.

Edit: This response was composed before Martin's reply. Though you have to look into the motivation behind any reason for deferring what is due. Could it be a trick question designed to test attitudes ?

It is a thought provoking topic and I liked Jamesd's insightful viewpoint on matters . I thank Jamesd, but not via the thank system, for that might be misconstrued as approval of the position or even an understanding of the general speculation topic.

I am too terrified to risk my money. My fears for the near present outweigh my greed for return in future years.
J_B.

tgroom57

I find it easier to envisage saying - there is £500 in an account for you and an extra £500 will be added if you don't touch it in 2 years. Kind of combining what jamesd said above.

I've just come back from the Tesco free bus trip and asked them your question as above. They were in favour of £500 now - maybe those going in their own cars would have said differently.

But just before I left I thought of another angle. All those in favour of waiting the 2 years say 'Aye'.
By spending the £500 (not all at once, I promise) wouldn't that trickle contribute to sales on the high street and thereby stimulate the economy?
By withholding your 'winnings' are you delaying a recovery? Would you willingly wait 2 years for that?