Would you rather have 2 million dollars now or 100k a year for the rest of your life? All tax free
Would you rather have 2 million dollars now or 100k a year for the rest of your life? All tax free
34 comments
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The lump sum has the better expected return over time, provided that you don't spend a large amount of it up front.
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Or you could invest the $100K a year. You have to compare apples to apples.
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Sure, but the expected return of the $2M is greater than $100k yearly, so you're not really going to be able to get ahead with the $100k/year. Compounding then further tips the scales in favour of the lump sum.
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For sure, assuming that the annual amount isn't indexed to inflation. But the question is just simple math if it isn't. See my longer answer.
Indexed, $100K/yr wins hands down if you're young.
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I could live comfortably on a small fraction of that, so it would pile up really fast if I had long to live. Not going to be billionaire money, but easily in the "think about pouring that somewhere good" money.
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34 comments