@RainstormGB There are far more new 5 pences in my neck of the woods than the old ones now. I don't know why we still bother with those things now-a-days. You need handfulls of small denomination coins just to buy a coffee or a loaf of bread.
Thanks, jadcott, for the input. I agree that this is very much a simplification and I certainly would like to be able to work this out properly.
I think if someone was continually seeking out the bank account that would give the best return for their money then the bank option may perform better. But I've certainly had a number of bank accounts that have paid less than 2% long before 2009. I also didn't deduct tax from the interest, which is something we would have to consider too.
hmm... this would be an interesting thing to work out properly. It might not be as clear-cut as one thinks.
2% annual interest is undershooting things a bit . We had >10% rates for a significant part of last century. It never actually went below 2% before 2009. So avg interest rate is going to be markedly higher than that.
I make 5p → 192p over 100 years to be an annualised rate of 3.65%... there's actually a fair chance that the bank deposit would have performed better than the silver.
@jadcott There's an awful lot of other variables too, like the real inflation rate and the variable spot price of silver. It would be a challenging equation if anyone was going to work it out properly.
(please don't think I'm having a go about this - I have a great many of these coins purely because that I think they will do very well)
Such variables wouldn't be an issue when comparing two assets over a set period though.
Simplest way of looking at it would be to compare the silver price growth to CPI:
whatsthecost. com/cpi. aspx
indicates silver lost ~50% of it's relative value over the past century. If anything this under-performance shows silver is now currently undervalued.
they are quite rare the new 5ps not worth anything but not a lot about :)
RainstormGB 2 years ago
@RainstormGB There are far more new 5 pences in my neck of the woods than the old ones now. I don't know why we still bother with those things now-a-days. You need handfulls of small denomination coins just to buy a coffee or a loaf of bread.
0muffins0 2 years ago
Thanks, jadcott, for the input. I agree that this is very much a simplification and I certainly would like to be able to work this out properly.
I think if someone was continually seeking out the bank account that would give the best return for their money then the bank option may perform better. But I've certainly had a number of bank accounts that have paid less than 2% long before 2009. I also didn't deduct tax from the interest, which is something we would have to consider too.
quibble72 2 years ago
hmm... this would be an interesting thing to work out properly. It might not be as clear-cut as one thinks.
2% annual interest is undershooting things a bit . We had >10% rates for a significant part of last century. It never actually went below 2% before 2009. So avg interest rate is going to be markedly higher than that.
I make 5p → 192p over 100 years to be an annualised rate of 3.65%... there's actually a fair chance that the bank deposit would have performed better than the silver.
jadcott 2 years ago
@jadcott There's an awful lot of other variables too, like the real inflation rate and the variable spot price of silver. It would be a challenging equation if anyone was going to work it out properly.
0muffins0 2 years ago
(please don't think I'm having a go about this - I have a great many of these coins purely because that I think they will do very well)
Such variables wouldn't be an issue when comparing two assets over a set period though.
Simplest way of looking at it would be to compare the silver price growth to CPI:
whatsthecost. com/cpi. aspx
indicates silver lost ~50% of it's relative value over the past century. If anything this under-performance shows silver is now currently undervalued.
jadcott 2 years ago