But nevertheless,someone wins these prizes every month. Take a look here..
Remove antispam and add 670 after bra to email
But a BS pays interest. One knows from the outset that one is going to receive it. With PBs, it's a bit of a lottery. Therefore, I don't think it is wise to compare PBs with any other form of money hoarding (saving). Even though you can can get your stake back, PBs are a gamble and as such must be counted as a luxury leisure pursuit, like going to the races, not as sensible financial planning.
MM
Oh dear, the gamblers mentality.
Why do you think an 0.000000008 and 0.00000000007 is a lot worse that zero ?
At odds as bad as that you'd need to invest £260,000 to have the probability of 1 prize above £5,000 and £31,250,000 to have the probability of a big prize over a 40 year timespan.
It should be measured against the stockmarket. Which has returned 5.2% above inflation over the last 100 years. The max PB investment of £30,000 would be worth £700,000 over the same 40 year period (with inflation at 3%).
People investing in PBs are effectively giving up that kind of return for odds of 0.000000008 and 0.00000000007.
Daytona
"Andy Pandy" wrote
In that case, someone holding 30K of PB's has
30,000 chances in 15billion, or a 1 in 500,000 chance of winning the jackpot each month.Let's compare that with the National Lottery :- Each 1 ticket has a 1 in (about)14million chance of winning the jackpot. So you'd need to buy
28 tickets each month, just to have the *same* chance of winning the jackpot as with the PB's..."Andy Pandy" wrote
Only 82.5% of mine have been the 50! [That's over more than three years.]
"Andy Pandy" wrote
I've had 7(seven) 100's in a period of less than 18 months. My best period of 12 months had 5(five)...
ISTR they've skewed the fund more towards 50's, and away from all higher prizes, so they can improve the odds of a win. I think it used to be 1 in 28,000 or 30,000, it's now 1 in 24,000.
The details are here:
Yup.
Indeed. So if your 30,000 was instead invested in a savings account paying 3% interest net, you'd get 75 a month interest. If you spent that on lottery tickets you'd have almost treble the chance of winning the jackpot, which on average is much more than a mere 1 million (it was 18 million last Saturday!). So if you're after a big prize - you're much better off with the lottery.
Nope!
I won a "big prize" through investing in the Leeds before they merged with the Halifax and floated. I think I got about 6000 in shares. The chances of the remaining building societies floating may be remote, but far less remote than winning a big prize on the PB's.
Interesting point.
I've said it before, and I'll say it again: IMO PBs are a good home for the '100% secure emergency roof repair' part of one's portfolio.
For 30K over, say, a five-year timescale, I'd stick maybe 2K in PBs i.e an amount large enough to be usefull if you want it back, but not so big that you're gambling /all/ your possible returns.
rgds, Alan
"Andy Pandy" wrote
Exactly! I was picking up on your comment that "the chance of winning a high value prize is miniscule with premium bonds". It is the same for the Lottery! Don't forget, we are comparing a chance of 0.000002 with a chance of 0.000005.
They are *both* "miniscule"!!
"Andy Pandy" wrote
Ah, but (excluding rollovers), when the jackpot is, say 6M, then you'd expect on average three winners sharing and getting 2M each. The average expected jackpot prize is always 2M - which is only twice as much as for PB's.
And bearing in mind that people often play the Lottery in syndicates, which they don't use to invest in PB's, the average jackpot payout is even lower for the Lottery!
"Andy Pandy" wrote
I know - but the period I mentioned above was *after* the change!
Well, yes.
Why exclude rollovers? The only relevant factors are the chances of winning and the size of the (shared) jackpot.
Well obviously, but then the chance of winning is higher, in exact proportion to the lower prize.
So you've either been very lucky or very selective with your chosen periods. I'm sure you're capable of working out the odds.
"Andy Pandy" wrote
Glad you agree.
"Andy Pandy" wrote
Yes, but you need to average over time:-
When there isn't a jackpot winner (so it rolls over), then the chance of you being "one of the winners" is *zero*.
When it was a rollover, and the winners share more than 2M each, then this simply counter-acts the lower-than-average "chance of winning, times jackpot size" of the earlier draw (which was zero, see above).
"Andy Pandy" wrote
A bit like "more prizes, but lower" in PB's? ;-)
Nevertheless, if you're going to ignore multiplicative effects on "miniscule" amounts, then you may as well argue than investing 1 in PB's is as worthwhile as
30,000.
Eh? You're suffering a logic failing - you're chance of winning was 1 in 14 million per ticket. The fact that nobody ended up winning doesn't change that.
If you're going to look back in hindsight and say "nobody won so your chance was zero", you may as well say "my numbers didn't come up so my chance was zero".
But using your logic above, the more people who win the better your odds - so if lots of people win your odds were better than 1 in 14 million!
Sort of - although it's still likely to be skewed towards higher end prizes even in a syndicate.
"Andy Pandy" wrote
Well, ignoring the minimum allowed investment in PB's, who says it isn't as worthwhile?
Altho', the probability distribution will be very different from the 30K holding scenario.
"Andy Pandy" wrote
Not if the syndicate has three or more people in it! With a three-person syndicate, that "nearly treble chance" becomes "just under the same chance"...
Eh? Are you feeling alright today? Have you been in the sun too long ;-)
With a 3 person syndicate the "nearly treble chance" becomes a nine-fold chance. For every 1 you get 3 entries. The winnings are smaller, the odds of winning are greater.
"Andy Pandy" wrote
"Andy Pandy" wrote
Perhaps I didn't explain myself very well. Let me try again...
The main point is that the expected average jackpot win is (only) 2M per winner.
This is true whether-or-not you consider rollovers
-- I just thought it might be easier to think about a single draw that wasn't rolled-over (into or out of).
But over the fullness of time, for each 14 Billion tickets sold we expect an average of 1,000 jackpot winners sharing a total jackpot of 2Billion (2M each).
Those 1,000 winners probably won't be evenly spread over the weeks -- some draws may have no winner (creating a rollover) and others will have more than one. But the average over time will still be 2M per winner, because those draws with no winner "counter-act" those with many, and those draws with jackpots not won "counter-act" with winners of rollover amounts.
Summary: There is 2Billion to be spread amongst 1,000 jackpot winners, so the average is 2M each.
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