Well, I’m planning to take early retirement at the end of this financial year (maybe a few interesting jobs after that as the exception). I may take a small amount of money and try my luck when I’ve more time, so may check some of your previous posts. I have no interest in crypto currencies as the only time I hear of them is when someone is clearly trying to con me.
The “problem” I have is that I don’t need much pension growth (not that that is much of a problem really) to meet my outgoings, so a safe inflation plus a few percent is fine for me, so whilst part of me thinks maybe I’m missing out the other part of me thinks why take the risk. I also transferred my final salary pension into my personal pension last June and it’s booming under the scheme own’s investment choices, so that plays to the why take the risk part (I know times are probably good for investment growth just now, and my timing on transferring my final salary was pretty lucky).
Anyway, I will probably give it a go with a small sum.
If by ‘advertised returns’ you mean the average payout, then it’s not surprising you don’t get that.
PBs pay out two £1 million jackpots each month, several prizes of £100,000, etc.
These are all included in the average payout.
Anyone who holds any PBs get a crack at winning any of these huge prizes, which is part of the fun.
Hardly anyone gets the average payout.
The vast majority get less than that, which is how the big prizes are funded.
So everyone has the exact same expected value (EV) per PB.
Most people focus irrationally on what they actually won, and forget that all their losing PBs also had a chance every month of a huge win.
In poker, the equivalent of this is when a bad player focuses on whether she won or lost each hand - whereas what’s important is what decisions they made in each hand and why, not how the random part of the hand played out after all the money had gone into the pot.
In 60+ years of owning some, number increasing over the years, I’ve won once, something like £240 30+ years ago. At that time it represented maybe 8% average annual interest on amount “invested” over the first 30 years, not bad given that savings interest probably averaged 5% or so. Since then no more winnings despite quite a lot more bonds, so average effective interest rate over the 60 or so years is well under 1% (impossible to calculate exactly as I don’t recall dates of adding how many bonds). But I have never thought of it earning interest, rather it is safe gambling, a chance of a big win while at worst losing the original amount only at the rate of inflation, and likely a bit better than that.
One near certainty in a negative interest rate environment is asset price inflation.
CPI measures everyday living expense, not investment asset value, so even though global inflation has been very low over the last decade, asset value has gone through the roof.
Given the current negative growth post Covid enviroment, the only tool central banks seem to be using is economic stimulation through expansionary monetary policy - and key part of that is inducing a negative interest enviroment. So the current asset inflation will continue into the near future.
I read somewhere that out of all the USD in circulation today, 20% was printed last year. Crazy isn’t it.
And sadly it’s a race to the bottom - as the US prints more money (and thus devaluing it’s currency), other economies will respond and do the same. And hence, asset inflation is a also global phenomenon.
Without meaning to steer the conversation toward politics, The Telegraph is, this morning, talking of interest rates rising next time as the economy bounces back with 5% rise in GDP by 2022. Helped, ‘so they say’, by Britons massive lead in the vaccination role out compared to the rest of the EU.