Prize bond winners???

smeedyova

Does anybody actually personally know anybody who won a significant amount in the prize bonds? It's very strange that more is not known about big winners, don't you think? Are prize bond managers and their families allowed to win? Can anyone provide incontrovertible evidence that the firm running the prize bonds is unlike the gift of money to the student travel pass issuing company from the government?

coylemj

The Prize Bonds people don't splash the winners' names over the newspapers or TV like the Lotto do.

There is a thread here called '25K invested in Prize Bonds', take a look and participate.

martyoo

Here's one anyways.

deem79

Nobody has ever won one - FACT

maximoose

There's an interesting thread here somewhere started buy a guy who invested 25k (IIRC) and is logging his success.. or lack thereof.

However I am too lazy to find it for you.

Good day.

Mort5000

I'm a little unsure as to why people keep using the words "invest" and "Prize Bonds" anywhere near each other.

Prize Bonds are exactly as valuable as cash, not an investment, and degrade at the rate of inflation.

The 'return' is a gamble and you'd be better off putting money in almost any interest bearing account.

soddy1979

Mort5000 wrote: »

I'm a little unsure as to why people keep using the words "invest" and "Prize Bonds" anywhere near each other.

Prize Bonds are exactly as valuable as cash, not an investment, and degrade at the rate of inflation.

The 'return' is a gamble and you'd be better off putting money in almost any interest bearing account.

Isn't all investing essentially gambling?

There is an expected rate of return available from prize bonds, similar to any other investment. Not sure if it is more or less than an interest bearing account, but I guess it's less.

Prize bonds are unique as they appeal to investors who are both risk averse, but excited at the possibility of extremely large returns. I think they are certainly suitable investments for some people.

Also, people generally think in nominal terms, and will be happy enough to get E100 back if they save E100 (obviously, only if inflation is low). It's an incorrect way of thinking, but it's also reality. It's especially prevalent among retail investors.

Thud

heres that thread:
http://www.boards.ie/vbulletin/showthread.php?t=2056292513

Dj Stiggie

Mort5000 wrote: »

I'm a little unsure as to why people keep using the words "invest" and "Prize Bonds" anywhere near each other.

Prize Bonds are exactly as valuable as cash, not an investment, and degrade at the rate of inflation.

The 'return' is a gamble and you'd be better off putting money in almost any interest bearing account.

Freakonomics had a very interesting podcast on this. Prize bonds are illegal in most of the United States so the states can have a monopoly on the Lotteries. However, while the return on investment will statistically never match a fixed-rate ROI, people who would never normally save would still buy prize bonds.

(In the US at least) Most people who play lottos are of lower socio-economic backgrounds and many do not have any significant savings to their name. Prize bonds (would) encourage these people to save, as they can always withdraw their money, and they have a chance of winning a significant amount (no matter how unlikely it is).

So you are right, you would be better off investing in almost anything else, but this scheme encourages people who would never normally invest to invest.

Mort5000

soddy1979 wrote: »

Isn't all investing essentially gambling?

There is an expected rate of return available from prize bonds, similar to any other investment. Not sure if it is more or less than an interest bearing account, but I guess it's less.

Prize bonds are unique as they appeal to investors who are both risk averse, but excited at the possibility of extremely large returns. I think they are certainly suitable investments for some people.

Also, people generally think in nominal terms, and will be happy enough to get E100 back if they save E100 (obviously, only if inflation is low). It's an incorrect way of thinking, but it's also reality. It's especially prevalent among retail investors.

Sure all investing is gambling.
But investing has an expected return.

Prize bonds have no expected return. Zero. Unless you are smacked by the lucky pixie.
In fact they have a guaranteed negative return: inflation.

pbwinner's "returns" in the adjacent thread appear to be around 1%.
That is not a suitable investment for anyone.

Mort5000

Dj Stiggie wrote: »

... but this scheme encourages people who would never normally invest to invest.

Fair enough.
You've got me there