NS&I or lottery with interest

bowlhead99

SonOfPearl said:

SonOfPearl said:

I can't help but think that the OP is either delusional or simply trolling at this point. The strategy they described is simply gambling and its not remotely similar to holding NS&I premium bonds. I'm sure that MSE understood them perfectly well and quite rightly ignored future communication. 

eskbanker said:
I'm, perhaps naively, thinking that at some point the eponymous light bulb will illuminate above their head and they'll finally cotton on to what everyone else can see clearly, but yes, a bit more wattage would seem to be necessary at the moment!

I think they are trolling - albeit politely. I'm not even going to read their reply to me (I had an email notification that they had replied). I think it would be best if this thread was locked now. 

It seems quite strange behaviour to decide to participate in a thread to comment that a poster is 'delusional', and then when they reply to address your comment politely and without offensive language, to then leave your own reply underneath their comment stating that you refuse to read what their comment says and want the thread to be locked. 

Eco_Miser

SonOfPearl said:

I can't help but think that the OP is either delusional or simply trolling at this point. The strategy they described is simply gambling and its not remotely similar to holding NS&I premium bonds. I'm sure that MSE understood them perfectly well and quite rightly ignored future communication. 

Yes, it is gambling, but it is very similar to premium bonds, which are also gambling. The only differences are the size of the prizes, and the odds of winning a prize, which is what this thread is asking.

Remember that with premium bonds your stake is not the £1 you paid for the bond - you get that back eventually - but the twelfth of a penny that the Treasury puts into the prize fund on your behalf each month (new rates), as thanks for lending them money.

phillw

coyrls said:
No, your premium bond draw entries are based on your capital, not the nominal interest on the capital.  The nominal interest is used to pay the prizes.

Premium bond entries are in lieu of interest, with your capital depreciating because of inflation and no interest.
You gamble that your prize will make up for it.
It is the same as using interest to buy lottery tickets, just with different odds.

phillw

annabanana82 said:

By the same token as advocating buying lottery tickets, you could suggest betting on the football, horses, matched betting etc? Granted you aren't likely to see the million pound prizes but actual returns may be better.  

Returns might be better, but the amount of effort is also higher.
You could just pump your savings into starting up a couple of businesses (and give up sleep) as well.

Apodemus

talexuser said:

Which lottery has a better chance of ongoing small winnings at better odds than PBs? Without that fact it is all hot air. 

To be fair, I think the OP made it clear that it was a strategy for those that want a (remote) chance of a really big win, not the ongoing small winnings.  This is not a new argument - there have been threads on here before suggesting the same thing and debates about whether it would be better for PBs to put more into big prizes or alternatively to spread the pool wider and thinner.

For my part I am happy with the frequent small wins and would never think of buying a Lottery ticket - but I accept that there is a certain degree of irrationality in thinking that one option would be gambling and the other not. 

eskbanker

Apodemus said:

talexuser said:

Which lottery has a better chance of ongoing small winnings at better odds than PBs? Without that fact it is all hot air. 

To be fair, I think the OP made it clear that it was a strategy for those that want a (remote) chance of a really big win, not the ongoing small winnings.

OP did initially accept that "The key however, is whether you expect to be better off, on average", which is a much simpler concept that can be modelled mathematically and which does have a right answer and one or more wrong ones!