{"id":3168,"date":"2011-01-18T17:33:37","date_gmt":"2011-01-18T16:33:37","guid":{"rendered":"http:\/\/www.walkingrandomly.com\/?p=3168"},"modified":"2011-01-18T17:33:37","modified_gmt":"2011-01-18T16:33:37","slug":"which-is-the-better-investment-premium-bonds-or-national-lottery","status":"publish","type":"post","link":"https:\/\/walkingrandomly.com\/?p=3168","title":{"rendered":"Which is the better investment – Premium Bonds or National Lottery?"},"content":{"rendered":"

So here’s a fun (and potentially useful) probability puzzle for you all to ponder.\u00a0 Here in the UK we have an investment option called Premium Bonds<\/a>.\u00a0 From the premium bonds website:<\/p>\n

“Premium Bonds are an investment where, instead of interest payments, investors have the chance to win tax-free prizes.\u00a0When someone invests in Premium Bonds they are allocated a series of numbers, one for each \u00a31 invested.”<\/em><\/p>\n

There’s a prize draw every month and a range of prizes from 25 pounds right up to 1 million pounds.\u00a0 You can get your money back at any time with no penalty.\u00a0 So, if you invest 1000 pounds then you get 1000 shots at winning a prize every month for as long as you leave the investment alone.\u00a0 More detailed information such as odds etc is available here<\/a>.<\/p>\n

The way I like to think of premium bonds is that they are a bit like the National Lottery<\/a> (click here for discussion of odds<\/a>) except that you get your money back after you’ve played.\u00a0 So I was thinking that, instead of buying premium bonds, an alternative investment strategy would be to put all of your money into a high interest cash account (paying N% per year) and use the resulting interest to buy lottery tickets.<\/p>\n

Both strategies offer similar security (you can get your principle investment back at any time) and both of them are a bit of fun since they are based on games of chance.\u00a0 Assuming I am to choose one of these strategies, which one is going to offer me the best rate of return over the long term?<\/p>\n","protected":false},"excerpt":{"rendered":"

So here’s a fun (and potentially useful) probability puzzle for you all to ponder.\u00a0 Here in the UK we have an investment option called Premium Bonds.\u00a0 From the premium bonds website: “Premium Bonds are an investment where, instead of interest payments, investors have the chance to win tax-free prizes.\u00a0When someone invests in Premium Bonds they […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[6,45],"tags":[],"class_list":["post-3168","post","type-post","status-publish","format-standard","hentry","category-general-math","category-just-for-fun"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p3swhs-P6","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/walkingrandomly.com\/index.php?rest_route=\/wp\/v2\/posts\/3168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/walkingrandomly.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/walkingrandomly.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/walkingrandomly.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/walkingrandomly.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3168"}],"version-history":[{"count":2,"href":"https:\/\/walkingrandomly.com\/index.php?rest_route=\/wp\/v2\/posts\/3168\/revisions"}],"predecessor-version":[{"id":3170,"href":"https:\/\/walkingrandomly.com\/index.php?rest_route=\/wp\/v2\/posts\/3168\/revisions\/3170"}],"wp:attachment":[{"href":"https:\/\/walkingrandomly.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/walkingrandomly.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/walkingrandomly.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}