04-03-2016, 04:55 PM
62
Re: Premium Bonds
As with most "lotto" style ventures, Premium Bonds are really just a mechanism which takes large amounts of money from mug punters, which the operators can then make money from (gambling it themselves on stock markets or investing in safe schemes etc) and who then will pay-out nothing or very little, to the vast majority of mug punters.The probabilities and maths involved in assessing Premium Bonds are very complex and made that way deliberately so the average punter can't properly assess the proposition.
The simpler people are left to reason thus:
"I can't lose any money because I can always take my money back out, and I might just scoop a hefty jackpot, so how can I lose?"
What they fail to assess is the true reality of how much return they will get from Premium Bonds vs the return they would get from say ISAs or interest accounts and so on.
When such analysis is done it soon becomes clear that Premium Bonds are a mugs game. That said the returns from interest savings accounts and the like have been getting less and less but even so, Premium Bonds will give most people a smaller return than other investing options.
Here's a good article which explains the true odds and the real facts about Premium Bonds.
http://www.moneysavingexpert.com/sav...-bonds#arethey
I have a key principle in life where lending money is concerned as follows:
If a bank or other institution would charge you X% to lend you some money, then you yourself would be a fool to lend YOUR money out to someone else and not charge them that same X%
If you have Premium Bonds then you are effectively lending your money out to someone else for zero percent charge, or for a very very small charge.
04-03-2016, 07:16 PM
65
Re: Premium Bonds
Originally Posted by Realist
->
As with most "lotto" style ventures, Premium Bonds are really just a mechanism which takes large amounts of money from mug punters, which the operators can then make money from (gambling it themselves on stock markets or investing in safe schemes etc) and who then will pay-out nothing or very little, to the vast majority of mug punters.The probabilities and maths involved in assessing Premium Bonds are very complex and made that way deliberately so the average punter can't properly assess the proposition.
The simpler people are left to reason thus:
"I can't lose any money because I can always take my money back out, and I might just scoop a hefty jackpot, so how can I lose?"
What they fail to assess is the true reality of how much return they will get from Premium Bonds vs the return they would get from say ISAs or interest accounts and so on.
When such analysis is done it soon becomes clear that Premium Bonds are a mugs game. That said the returns from interest savings accounts and the like have been getting less and less but even so, Premium Bonds will give most people a smaller return than other investing options.
Here's a good article which explains the true odds and the real facts about Premium Bonds.
http://www.moneysavingexpert.com/sav...-bonds#arethey
I have a key principle in life where lending money is concerned as follows:
If a bank or other institution would charge you X% to lend you some money, then you yourself would be a fool to lend YOUR money out to someone else and not charge them that same X%
If you have Premium Bonds then you are effectively lending your money out to someone else for zero percent charge, or for a very very small charge.
04-03-2016, 08:56 PM
67
Re: Premium Bonds
Originally Posted by Realist
->
As with most "lotto" style ventures, Premium Bonds are really just a mechanism which takes large amounts of money from mug punters, which the operators can then make money from (gambling it themselves on stock markets or investing in safe schemes etc) and who then will pay-out nothing or very little, to the vast majority of mug punters.The probabilities and maths involved in assessing Premium Bonds are very complex and made that way deliberately so the average punter can't properly assess the proposition.
The simpler people are left to reason thus:
"I can't lose any money because I can always take my money back out, and I might just scoop a hefty jackpot, so how can I lose?"
What they fail to assess is the true reality of how much return they will get from Premium Bonds vs the return they would get from say ISAs or interest accounts and so on.
When such analysis is done it soon becomes clear that Premium Bonds are a mugs game. That said the returns from interest savings accounts and the like have been getting less and less but even so, Premium Bonds will give most people a smaller return than other investing options.
Here's a good article which explains the true odds and the real facts about Premium Bonds.
http://www.moneysavingexpert.com/sav...-bonds#arethey
I have a key principle in life where lending money is concerned as follows:
If a bank or other institution would charge you X% to lend you some money, then you yourself would be a fool to lend YOUR money out to someone else and not charge them that same X%
If you have Premium Bonds then you are effectively lending your money out to someone else for zero percent charge, or for a very very small charge.
Nice long post
BUT stupid.
Your quote
If you have Premium Bonds then you are effectively lending your money out to someone else for zero percent charge, or for a very very small charge.[/QUOTE]
That statement covers all investments that you make and hope and expect a return on.
04-03-2016, 09:22 PM
68
Re: Premium Bonds
Originally Posted by tarantula
->
As I get a heck of a lot more in prize money on my premium bond investment, than interest on the savings accounts, I would beg to differ.
To win £1000 per year you would have to one of the lucky 5% of people in that bracket and even if you were, that's still only a 2% return.
There are savings accounts offering better returns than the average 1% that premium bonds provide. Santander for example offer 3% on up to a £20,000 investment.
04-03-2016, 09:24 PM
69
Re: Premium Bonds
Originally Posted by galty
->
That statement covers all investments that you make and hope and expect a return on.
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