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or savings account. In response to this, there are now savings
plans in which you put money into an account, and in doing so
get entered into a lottery-like drawing for prizes, cash, and so
forth. Because the monthly lottery drawing is in present time,
it lessens the focus on the faraway (and less tempting) benefi t
of saving money. Simply put, to those who discount the future

benefit of saving money, it brings some immediate reward and
gets them on board with saving.
Premium Bonds in Britain are an example of an investment
where, instead of interest payments, investors have the chance
to win tax-free prizes. Anyone who invests in Premium Bonds
is allocated a series of numbers, one for each £1 invested. The
minimum purchase is £100, which provides 100 Bond numbers
and, therefore, 100 chances of winning a prize. Prizes range from
two £1 million prizes to more than a million £50 prizes. There
are currently 23 million bondholders holding £26 billion worth
of Premium Bonds. The marketing pitch on the Premium Bond
website is, “They are a fun, yet serious way of saving, combining
the chance of winning tax-free prizes with the peace of mind that
comes from knowing your capital is 100 percent secure.”
I’m not going to tell you that this is a better investment than
a mutual fund or anything that generates positive interest or
returns. But if you’ve got a high discount rate on your goal (and
if you’ve ever smoked, overeaten, wasted money, and so forth,
you might have a very high discount rate, at least for that issue),
then this is one way of putting some otherwise future benefi ts
in the here-and-now.
When Carl (I’m omitting his last name because he’s an engi-
neer for a government agency) set a goal to nab a promotion at
work, he knew it was going to be a tough challenge. Meeting
his goal meant learning new skills, which translated into night
classes. Weekend time would have to be set aside for studying,