Re: Premium Bonds

Did win £500 about 6 +years ago.

But about 3 months ago did have one £50 and three £25.

Last month had a £25

Good year so far.

Much better than any fixed rate Bonds

Re: Premium Bonds

As you state A POUND invested will return thoes odds

With the odds you gave if some one owns £30k they have a chance of winning at least £25 per month...over the year they can/will win £300

Do that every month they will get the same return if invested in a Bank Bond.

Plus tax free

Re: Premium Bonds

Errrrrr nope.

Probabilities and distributions do not work like that.

To explain. . .

Take an ordinary 6-sided die

You have a 1 in 6 chance of rolling a 6


But this DOES NOT mean that if you have 6 rolls, you actually will roll a 6.

Nor does it mean the die is rigged or loaded if you don't roll a 6.

It may take many more than 6 rolls to actually roll a 6

So your notion that someone putting £30,000 into PBs is actually going to win £25 every month is I'm afraid, wishful thinking, delusion.

They will be lucky to win a fraction of 1% profit in the year.


Meanwhile their money could earn 2.5% pa interest on a 5yr fixed bond, or 2% in a cash ISA with no risk at all.

You could earn masses more investing in good stocks and shares.

Re: Premium Bonds

But that was the odds you quoted.

You stated that to win £25 the odds were 30K to 1.

So if I have £30k in bonds the odds YOU QUOTED state I will win £25 every month.

Re: Premium Bonds

Sigh

So you ignored my previous post completely then !

The mathematical odds, which govern the total number of possible outcomes are theoretical and dependent on various factors. The ACTUAL results seen will vary tremendously depending on various factors and the number of times you roll the die or run the PB numbers.

You need to get you head around that to talk sensibly about odds, probabilities and results.

The odds of a flipped coin coming up Heads is of course 1 in 2. By your uninformed view then you would expect that every 2 times you flipped it you would see at least one head.

This is of course completely wrong, a school boy fallacy.

You could flip the coin 8 times and it come up tails each time.

Would that indicate that the coin is rigged?

No absolutely not. It's possible it is rigged but it may not be.

How would we determine if it was rigged?

You would have to flip the coin a great many times to see the results, the heads and tails distribution.

You have to run probability scenarios MANY TIMES in order for the known theoretical ODDS to become evident.

So NO, emphatically NO, if you roll a die just 6 times you most certainly are unlikely to see each number 1,2,3,4,5,6 come up once. To expect that is to be ignorant of probability and sample sizes.

Similarly, a 1 in 30,000 chance of winning £25 on the PBs DOES NOT mean that you WILL win £25 each time if you have 30,000 chances.

You have to run the scenario (in this case ERNIE picking numbers) many many times before the reality and results come anywhere near the theoretical odds of 1 in 30,000.

Some people will win more £25 prizes than others but over a very long period it should even out. The problem is the length of that "long period", i.e. the sample size.

Imagine the old National Lottery. You had 1 in 14m chance of winning the lottery. Those odds are staggeringly poor but worse still they wouldn't PRACTICALLY match the seen results without a super colossal sample size. Bear in mind that the average person might live to say 100 yrs old. In their lifetime they will only participate in 5200 lottery draws (being one per week for 52 weeks times 100 years).

Even if they could somehow survive to participate in 14m draws, they still couldn't expect to win that jackpot because distribution just doesn't work like that. Just as 6 rolls of a die are unlikely to turn up the numbers 1,2,3,4,5 and 6, so too 14m lottery draws are not likely to turn up each of the 14m possible combinations once each.

So going back to PBs.

Your odds of winning £25 are 1 in 30,000. That is the known mathematical theory, the true odds. But you can't expect to see those odds actually played out in results until a super massive number of PB draws have been conducted.

If one wanted to check that the National Lottery draw was fair and honest you would have to run an absolutely enormous sample of actual draws, by which I mean many many millions of draws. That just isn't going to happen in anyone's lifetime and thus it can't actually be tested to see if it is rigged. For that reason and other fairly obvious conspiratorial reasons I wouldn't touch the Lottery with a barge pole.

Equally I wouldn't touch Premium Bonds. They exist to take money from dim people who don't understand odds and probabilities. That money is used to invest wisely in good things which generates tons of profit for the operators and gives bugger all of it back to the mug punters.

It truly is a mugs game same as all online gambling.

Re: Premium Bonds

You're so 'Money Supermarket' Realist.........

Re: Premium Bonds

I will gratefully accept the £25 I’ve won this month

Re: Premium Bonds

Nice Christmas Present...but am gutted I drew a blank this month but cant complain have had a good return this year.

Re: Premium Bonds

Maybe you’ll be lucky for the New Year, Galty

Re: Premium Bonds

just checked for December and won 2 x £25 prizes.