UKC

/ Dilemma

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handofgod on 16 May 2018

Would you take £1m now, or £1,000 a week for the rest of your life?

 

what the hex on 16 May 2018
In reply to handofgod:

How long do you have left to live?

Edit: Sorry, that sounds a bit sinister...

Post edited at 15:38
paul_the_northerner - on 16 May 2018
In reply to handofgod:

Wish i had that dilemma! for me the £1000 a week would be nice as i hope to live a fair while yet. 

handofgod on 16 May 2018
In reply to what the hex:

lets say you're 25.

Jon Greengrass on 16 May 2018
In reply to handofgod:

Is that what the robot overlords are going to be offering?

JLS on 16 May 2018
In reply to handofgod:

I'm not fussy, whatever way suits you really.

Here are my account details...

sort code: 60-16-13
account number: 31926819

Blue Straggler - on 16 May 2018
cander - on 16 May 2018
In reply to handofgod:

So to achieve £52,000 pa you’d need to get a return of just over 5%, so it depends on how you think the markets will perform . Personally I’d take the million quid and invest it - so when I kick the bucket hopefully there is some left for my family to enjoy as the £1000 a week would stop once you’re dead, but the investments on the 1,000,000 would continue to work and payout, as I wouldn’t be foolish enough to have spent the capital sum.

stevieb - on 16 May 2018
In reply to handofgod:

> Would you take £1m now, or £1,000 a week for the rest of your life?

index linked or a flat rate?

if it was a flat rate, I'd take the million

wintertree - on 16 May 2018
In reply to handofgod:

Impossible to say without clarity on if that £1000 is somehow inflation linked/adjusted over time.

If the £1000 is not adjusted for inflation but is fixed over time, living to infinite age will pay out more in total paid weekly than up front given a constant annual inflation rate below 5.340067% (approximately).  For inflation above that rate, you are better of taking the million up front.

 

Trangia on 16 May 2018
In reply to handofgod:

It's a no brainer for me - look at my age.........

I would love to be in a position to clear my 4 kid's mortgages.

Post edited at 17:11
hokkyokusei - on 16 May 2018
In reply to handofgod:

Does the £1000/week increase with inflation?

gravy - on 16 May 2018
In reply to hokkyokusei:

and are you a safe bet and reliable?

BnB - on 16 May 2018
In reply to handofgod:

It's a good question but one that ignores tax and inflation, not to mention your age. Until you quantify those variables this question cannot be accurately answered.

That said, if we assume the sums are tax free and that the £1k per week is adjusted upwards to match inflation indefinitely then anyone with a life expectancy in excess of 30 years should take the weekly gift. Anyone who expects to live fewer than 20 more should take the lump sum. And those in between will need to have a good think about it.

And, as many of us probably fit into that middle band, your question remains a good one.

Neil Williams - on 16 May 2018
In reply to handofgod:

Good question.  The £1m would have the advantage of being able to be invested in something like a business (or a set of businesses) which could, if it is successful, bring in a lot more money long term.  I therefore think I would choose that.

Post edited at 17:46
tom_in_edinburgh - on 16 May 2018
In reply to handofgod:

The million quid.  And I'd get it the hell out of UK pounds before Brexit.

BnB - on 16 May 2018
In reply to Neil Williams:

> Good question.  The £1m would have the advantage of being able to be invested in something like a business (or a set of businesses) which could, if it is successful, bring in a lot more money long term.  I therefore think I would choose that.

If that’s all you’re going to do with it then take the (inflation adjusted) weekly option. It’s the equivalent of being paid 5.2% interest in perpetuity with no risk. You can only get that on the stock market by taking a lot more risk.

Wingeing Old Git - on 16 May 2018
In reply to JLS:

> I'm not fussy, whatever way suits you really.

> Here are my account details...

> sort code: 60-16-13

> account number: 31926819

Thanks! I've passed the details onto my Nigerian cousin.

Neil Williams - on 16 May 2018
In reply to BnB:

> If that’s all you’re going to do with it then take the (inflation adjusted) weekly option. It’s the equivalent of being paid 5.2% interest in perpetuity with no risk. You can only get that on the stock market by taking a lot more risk.

But it doesn't give you a nice lump sum if you *want* to start a business?

Dax H - on 16 May 2018
In reply to handofgod:

At 46 with only 2 members of my imidiate family making it past 60 I would take the million. Sell my business for as much as I can. Invest half the cash to look after the wife if I do pop at 60 or give me some cash if I don't. Enjoy the other half and do all the stuff we want to do but can't afford to due to both financial constraints and time constraints through running a business. 

tom_in_edinburgh - on 16 May 2018
In reply to BnB:

> If that’s all you’re going to do with it then take the (inflation adjusted) weekly option. It’s the equivalent of being paid 5.2% interest in perpetuity with no risk. You can only get that on the stock market by taking a lot more risk.

Sure there is risk.  In the last 40 years there have been periods of high inflation,  periods where interest rates went way over 10% and a bank crash.  The UK chose to print money and bail everyone out last time but it may well not be able to do that the next time.   Investors might well take a haircut or get paid out in inflated currency.   If you have money locked up in an annuity for 20 or 30 years there is a chance that a government which needs cash will change taxation rules and screw you.

There is also great risk in the near term:  we have one of the main parties hell bent on  tearing apart our trading relationships and the other that is dreaming of 1970s style state intervention and nationalisation.   There's no way we will get through either a hard Brexit or a Corbyn government without a financial crisis.  The governments own estimates say Brexit will reduce the growth in the UK economy for decades.  So why invest in the UK?

I'd guess you could get more return on the stock market with less risk than an annuity backed by a UK financial institution and paying out in pounds if you had a diversified portfolio and exposure to multiple countries and currencies.

Post edited at 23:56
handofgod on 17 May 2018
In reply to hokkyokusei:

No. Fixed at £1000 p.w. No adjustment for inflation.

 

handofgod on 17 May 2018
In reply to Wingeing Old Git:

Jokes aside; what can one do with someones sort code and a/c number apart from set up DDs? 

 

skog on 17 May 2018
In reply to handofgod:

> Jokes aside; what can one do with someones sort code and a/c number apart from set up DDs? 

"Hi Mr. Hand, I'm calling from the TSB regarding a small problem with your account number 12345678 with us, set up in the Liverpool branch.

Before we can take this any further, I just need to run through a couple of security questions with you.

Firstly, could you please confirm your mother's maiden name for me...? Great, and your PIN to access your online account?"

A skilled con operator can use such information to make themselves sound very credible, and go on to obtain the rest of the information they need to access the account, or trick someone into performing a transaction for them.

It won't work every time, of course - but it doesn't have to for it to be well worth their while.

 
Post edited at 10:09
handofgod on 17 May 2018
In reply to skog:

What stupid person would disclose such sensitive info over the phone?

 

Ian W - on 17 May 2018
In reply to handofgod:

Literally hundreds do every day. Thats why its such big - and growing - "business".

NottsRich on 17 May 2018
In reply to handofgod:

> What vulnerable/naive/old person would disclose such sensitive info over the phone?

Try that one.

 

elsewhere on 17 May 2018
In reply to handofgod:

> What stupid person would disclose such sensitive info over the phone?

You or one of your loved ones in the early stages of dementia.

Post edited at 10:37
handofgod on 17 May 2018
In reply to elsewhere:

Vulnerable people should be safe guarded and not issued with services like online banking or pin numbers, no?

I'm not sticking up for the banks here, I dislike them as much as anyone else, but if you cant mange the services offered i.e you have an condition which might mean you disclose senstive information, then should you really have these services? And also, why should the bank pick up the tab when someone skims your life savings?

 

 

Post edited at 10:55
skog on 17 May 2018
In reply to handofgod:

> What stupid person would disclose such sensitive info over the phone?

If you imagine yourself to be invulnerable to being tricked into doing something stupid - by someone clever, whose actual full time job is conning people, and is backed up with cutting-edge technology, support, psychology and training - you're a prime candidate for being conned!

It's big business, and the people doing it are better at it than you or I (unless you're a professional, working full time in the same area or in countering it, anyway).

elsewhere on 17 May 2018
In reply to handofgod:

> Vulnerable people should be safe guarded and not issued with services like online banking or pin numbers, no?

In reality it doesn't work that way for all sorts of practical reasons. In no particular order...

  • Not everybody has a trusted guardian.
  • Few of us have a power of attorney legally set up in advance in case we have a head injury climbing.
  • In the early stages of dementia it's hasn't been recognised or accepted by the person or the family. 
  • The family is likely to be flummoxed why the person is behaving a bit out of character such as when the person gets conned.
  • It might be obvious to medical professionals but the family may be flummoxed unless they've seen it before.
  • A bank can't easily deny a customer's autonomy or normal consumer rights by removing internet banking as the bank has no medical expertise.
  • The state can't protect you by removing your autonomy without a legal process signed off by a doctor.

I suspect there's usually an increasingly vulnerable stage of a couple of years or more for the loss of normal adult capacity.  

Post edited at 12:05
jkarran - on 17 May 2018
In reply to handofgod:

> Would you take £1m now, or £1,000 a week for the rest of your life?

I'd take the weekly income.

jk

hokkyokusei - on 17 May 2018
In reply to handofgod:

> No. Fixed at £1000 p.w. No adjustment for inflation.

I'd definitely go with the million.

jkarran - on 17 May 2018
In reply to handofgod:

> I'm not sticking up for the banks here, I dislike them as much as anyone else, but if you cant mange the services offered i.e you have an condition which might mean you disclose senstive information, then should you really have these services? And also, why should the bank pick up the tab when someone skims your life savings?

Because quite often it's their too expensive to fix or left in for convenience security flaws that facilitate it. Because it incentivises them to protect your money better, collectivises risk that individuals often have little to no control over.

jk

arch - on 17 May 2018
In reply to handofgod:

> What stupid person would disclose such sensitive info over the phone?

Brexit voter ??

Wingeing Old Git - on 17 May 2018
In reply to handofgod:

> Jokes aside; what can one do with someones sort code and a/c number apart from set up DDs? 

I haven't a clue. I was only joking. Having said that, I think it would be foolish to let anyone know one's sort code, a/c number, etc

Rigid Raider - on 17 May 2018
In reply to handofgod:

This has been discussed a bit at home since my Mum aged 88 allowed somebody on the phone to browbeat her into admitting them into her laptop. Happily she had a genuine appointment to keep so she broke off the call before too much damage was done but the caller kept on phoning her for two days afterwards.

I've concluded that we are still too afraid to cause offence, we still have some respect for "authority" whatever form that may take and on reading up I find that in elderly people the part of the brain that controls belief begins to deteriorate. 

handofgod on 18 May 2018
In reply to Rigid Raider:

Sorry to hear about your mother. Thats really sad

Many years ago, my father was at work and I walked in on a vacuum cleaner sales man about to sign my mum up for a £2000 vacuum cleaner.

Luckily, I told him to sling his hook.

jkarran - on 18 May 2018
In reply to handofgod:

> Many years ago, my father was at work and I walked in on a vacuum cleaner sales man about to sign my mum up for a £2000 vacuum cleaner. Luckily, I told him to sling his hook.

I nearly ended up doing that job for a summer. They were during recruitment very reluctant to discuss what we'd be selling, how and to whom but it eventually became clear so I did the same as you!

jk

Duncan Bourne - on 18 May 2018
In reply to handofgod:

£1,000 a week I aim to try and live at least another 20 yrs

 

EddInaBox on 18 May 2018
In reply to handofgod:

Neither, I would rather have one penny.  Just put it on the first square of a chess board... and promise to double it on the second square and double it again on the third, and so on.

elliott92 - on 18 May 2018
In reply to everyone:

You are all way too sensible. Give me the million and 1 week. I may be skint at the end of it. I may be dead at the end of it. But what a week I would have with a free million quid 

 

cander - on 19 May 2018
In reply to EddInaBox:

I thought it was meant to be grains of rice?

Timmd on 19 May 2018
In reply to Duncan Bourne:

> £1,000 a week I aim to try and live at least another 20 yrs

I think we all do. It didn't work out like that for my Mum, unfortunately. 

BnB - on 19 May 2018
In reply to Neil Williams:

> But it doesn't give you a nice lump sum if you *want* to start a business?

Unless you’re thinking really big in which case you need £100m, you certainly don’t need £1m to start a business. Indeed if you do start with that much you’ll probably increase the chances of failure by focusing on how to spend the money rather than on building your income. At the very least you’ll waste much of that seed capital.

Away from capital-intensive industries, you can expect to build a strong business with £50k of starting capital and a good idea (or use someone else’s idea and do it better). But it’ll be a couple of years until you see any cash out of it, no matter how profitable the trading, so allow a little extra besides.

Timmd on 19 May 2018
In reply to BnB:

One could have the £1000 a week, and live on £500 and put the other £500 into investments, and possibly eventually end up with £1000000 and still have the £500/£1000 a week. ;-)  £25.000 a year isn't to be sneezed at if one lives in the north of the UK.

Post edited at 19:34

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