Wonga.....in need of a big loan

[sodthisforfun]

21 and a new driver. £3000 a year insurance, £15k for the car+ interest over 5 years and it was 3 years old when be had it. Must be mad.

Are you paying him too much?!

Guess he's only young once..

 

[sodthisforfun]

That's the modern way -

no longer work so you can afford things, but

buy on credit so you have to work more to pay for them.

And pay more for them..

 

[SammyInnit]

Are you paying him too much?!

Guess he's only young once..

Yes. Theres no one else I know earning as much as he is for his age; I'm too soft really but he hasn't had the responsibility of working to a price yet. That'll be a real eye opener for him. He's very comfortable with me taking all the risk while demanding more money.

 

[Ian H]

That's the modern way -

no longer work so you can afford things, but

buy on credit so you have to work more to pay for them.

A while back I was thinking of getting a £10,000 loan, buying 10,000 premium bonds and paying the loan back. Seemed a good idea but then I bought a house and forgot about it.

 

[sodthisforfun]

As don't get interest on premium bonds but pay interest on a loan, how does it make you money?

 

[SammyInnit]

As don't get interest on premium bonds but pay interest on a loan, how does it make you money?

It got harder and harder to win. It was £50 minimum, then I believe they introduced £25 wins. Got to a point where I'd perhaps win £100 in a good year on £6k I had in them. Ended up taking most of them out in the end; an ISA I have pays better.

 

[Ian H]

As don't get interest on premium bonds but pay interest on a loan, how does it make you money?

Prizes, I would have been hoping for the £1,000,000 draw.

I was also thinking i’d never save up £10,000 but I would pay back £10,000.

 

[sodthisforfun]

Prizes, I would have been hoping for the £1,000,000 draw.

I was also thinking i’d never save up £10,000 but I would pay back £10,000.

Lotto tickets?! Do the pools still exist?
I think your money is better off in the house for your returns

Father in law has £50k of bonds, won just under a grand all in all in dribs and drabs over the last 3 years and my better half has £30k and has won around £50 in 2 years.. odds are not good, ha ha. Yeah, get an ISA!!

 

[JohnD]

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[JohnD]

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[sodthisforfun]

the financial model is that the accrued interest is paid into a prize fund, and every bond earns its owner a monthly ticket. The prizes are raffled and every ticket holder has the chance of a prize. The random distribution of raffle prizes means that in any particular draw, any particular bond is unlikely to win. But the more you have, and the longer you hold them, the more your chances of winning approximate to the return determined by the "interest rate" that is paid into the prize fund. Prizes are free of UK tax, which makes them more attractive for higher-rate taxpayers. The value of your bonds is guaranteed by HM government which, unlike, say, an Icelandic bank, is considered very unlikely to go bust and lose all your money.

You've only staked your monthly "interest" into the raffle, your principal £1 is untouched and returned to you if you cash in your bond.

I know how bonds work, ta.
And you missed the point. To take out a loan which will have to be paid back with interest doesn't make financial sense when you buy bonds which you have no interest - just a chance to win in a draw. Is that really a financially sound call to make? Save up the dosh and buy bonds by all means, just don't pay interest in order to buy em first.

 

[JohnD]

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[sodthisforfun]

that might be what he tells you....

I just looked up my winnings over 24 months, and divided them by the number of bonds, and divided by two, and the return is 1.45% p.a.

Some will do better, some will do worse.

Perhaps he has been unlucky.

Father in law every time he wins says 'ner-ner', it's a running joke between them now. However, both father in law and better half don't have much luck considering the large amount they've bought in bonds and upping the odds of winning.

By the way, the tax free part isn't such a pull for most people now on bonds since they changed the rules.
https://www.moneysavingexpert.com/savings/personal-savings-allowance/

 

[sodthisforfun]

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Why you deleting all your posts John?

 

[Ian H]

Save up the dosh and buy bonds by all means, just don't pay interest in order to buy em first.

Lots of people would think to do that but in reality it wouldn’t happen, any money left in the pot gets spent instead. £10000 borrowed at 2.9%, the payment goes out of the bank on payday and isn’t missed.

My parents are very savvy with their money and think they do better with premium bonds than ISA’s.