Current Events > $20 million now or $3k a day for life

(+) Yeah! (+)

Sad_Face posted...

I know exactly where to throw my money at with $20 million. In fact, I'd take $5 million and let you guys go with the rest (okay not really).

The $3K a day option is a terrible idea. The purchasing power of $3000 in 2019 is worth less than the purchasing power of $3000 in 2009, which is worth less than the purchasing power of $3000 in 1999. Inflation is going to devalue your wealth. So take the lump sum one time and learn to invest and maintain your wealth. And with the Fourth Industrial Revolution coming, every nation is researching Distributed Ledger tech (blockchain and the like) to back a new stablecoin that would be the new world reserve currency. If one rises and is hopefully not Facebook's libra coin, the US dollar could very well collapse in value.

The OP states that the 3k a day is adjusted for inflation, by the way.
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I think id still take the 20m but people who are talking about investing it need to remember to price that in. It's not trivial at all over the long term that your 3k a day is going to 'grow' to match inflation (that's like between 1.5 - 2.5% 'return' every year just automatically)

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Balrog0 posted...

I think id still take the 20m but people who are talking about investing it need to remember to price that in. It's not trivial at all over the long term that your 3k a day is going to 'grow' to match inflation (that's like between 1.5 - 2.5% 'return' every year just automatically)

On the other hand, if you have $20M, you can invest it at probably 15-20%.
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If you guys are concerned about risk on investing the $20 million put it in Treasury Bonds.

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20 million and choose to invest it

seriously I don't know how you guys can think otherwise

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3k per day

sure, maybe the 20million makes you more money over all but it requires effort and carries some risk and honestly even 3k per day is absurdly excessive and more than I really would ever see myself needing
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DevsBro posted...

On the other hand, if you have $20M, you can invest it at probably 15-20%.

No, you really can't. Not without taking on a lot of risk.

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PerseusRad posted...

The OP states that the 3k a day is adjusted for inflation, by the way.

Damnit this is cheating.

Still, I'd take the 20 mill since I've done my research and know I'd be throwing my money at chainlink.
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ssjevot posted...

If you guys are concerned about risk on investing the $20 million put it in Treasury Bonds.

but whats the return on those? 1% 2%? Use that as a discount rate on the 100 year annuity and the NPV will be clear.

to be honest the biggest risk with taking the $3k per day is probably the uncertainty around individual life expectancies, and your options for diversification are limited to having more kids. At least the $20m can be passed on with no conditions vs the annuity which only allows you to pass on the realised or received portions.

So from a finance perspective (ie market risk only and no consideration of the variable life expectancy), I think using a 100 year maturity to cover you and one dependent is a reasonable estimate and at least in todays climate, the $3k per day adjusted for inflation would appear to offer the better risk adjusted net present value.

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While TECHNICALLY because of currency devaluation over time, the 3k a day will be worth less, especially considering you could invest it.

I would rather have the 3k a day so I could be prevented from being stupid and fucking up with the 20 million.

ThisIsIt posted...

While TECHNICALLY because of currency devaluation over time, the 3k a day will be worth less, especially considering you could invest it.

what currency devaluation are you referring to?

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I wish I could have 3k every day.
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@gloBal enemy posted...

ThisIsIt posted...

While TECHNICALLY because of currency devaluation over time, the 3k a day will be worth less, especially considering you could invest it.

what currency devaluation are you referring to?

For example from 1999 to now (20 years ago)

Our money is worth 54.00% less now than in 1999.

With Trumps tariff wow and the insane amount of currency manipulation going on. You can expect a much steeper drop 20 years from now.

these are my favorite kind of discussions

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I first thought the $3k was for a month, before I reread it. Either way, the $3k is functionally infinite money that accounts for inevitable inflation & can be marked for inheritance.
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Daily money. No need to worry about my money vanishing because I made bad investments, or went on a ridiculous spending spree.

Plus people can't expect massive handouts. $3k a day enables a stress-free enjoyable life without living a flashy life.
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$3k daily.

Maybe I'm crazy, but I really couldn't care less if there was a way to earn more through the $20 million. I already have guaranteed financial security for the rest of my life. What do I need even more money for?
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I currently live off 1k a MONTH, so 3k a day would be like the best thing ever and I feel like I wouldn't have to worry about tax fuck ups as much.
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TC knows what he's doing. The NPV of $3,000 a day at 5% annual interest rate is right around $20million
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$20 million now. Can buy more stuff right away. Plus I can give it to my family if I die early.

that 3k a day will be useless if you die though lmao

take the 20 mil up front, hire a adviser or investor, flip that money around year over year
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konokonohamaru posted...

TC knows what he's doing. The NPV of $3,000 a day at 5% annual interest rate is right around $20million

I still think the key question is around mortality rate and essentially what is the expected vs. maximum maturity possible given the restrictions on passing on the cashflows to one dependent and that's it.

So whilst I don't really take that into consideration much in my valuation previously, given the uncertainty around this non market condition, and the no strings attached to the $20m upfront, I think I'll just take the lump sum.

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3k so I don't have to worry about lack of self control ruining my windfall

3k USD converted to local, is like 50X what i have as is (have around 12,7 per month and 3k USD alone is close to twice that) , and if that number was just doubled (let alone multiplied by 10) id be feeling like i live in luxus.

Yeah ill take that one.
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A bird in the hand.
Take the 20 million

You never know whats going to happen to the people cutting you checks. Plus Id rather be able to pay my new house and cars off upfront, instead of making payments.

Also, having freed up capital gives the opportunity to make more money like through investing or real estate.
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20M.
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$3,000 but mainly because it is adjusted for inflation. Plus if I can pass it on to my daughter that means 62 years minimum of payments (if she only lives to 65, with modern tech and $3,000/day she should easily make it into her 80's or 90's),

You can still buy whatever you want. A mansion, exotic cars, etc. Once any place sees that you are making $90,000/month they'll give you a mortgage/loan for just about anything.


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Akagami_Shanks posted...

that 3k a day will be useless if you die though lmao

take the 20 mil up front, hire a adviser or investor, flip that money around year over year

Only if you die a bitter, lonely old man. The money can be passed on to a dependent.

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BeyondWalls posted...

A bird in the hand.
Take the 20 million

You never know whats going to happen to the people cutting you checks. Plus Id rather be able to pay my new house and cars off upfront, instead of making payments.

Also, having freed up capital gives the opportunity to make more money like through investing or real estate.

I think one of the assumptions in the hypothetical was zero risk of default on the party making the payments to you, and the payments would increase in line with inflation.

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I would be set for life with 3k a day.
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3k per day easily.

That's just over a million per year.

If there is something I really need that is a big expense, I can just save up for a couple of days.

So after 20 years I'll hit break even, without accounting for the inflation.

I am going to assume I am going to live for another 50 years, so that'll also easily take care of my retirement.
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Could die tomorrow. 20 mil now. You're set for life and that's overkill. Give me the guaranteed cash over the slow trickle.
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modena posted...

3k

It would keep me from fully buying a bunch of exotic cars and I would make payments on land and leases ect... It would keep me from blowing too much and make smart decisions.

Lol no it wouldn't

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I think this topic demonstrates why people are so bad at investing for retirement, or just investing in general

Picking a random mutual fund I currently invest in (VSMAX), 20 years ago if I would have invested 20 million I would have 66 million today. There is a reason the rich stay rich

Taking the 3k is like not using a credit card because you lack self control. Don't live like that, don't be like that.
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TheGoldenState posted...

Taking the 3k is like not using a credit card because you lack self control. Don't live like that, don't be like that.

I think you would have a point if the numbers in the OP were like, 1/100th of what they are. But as it stands, both these options are ridiculously obscene amounts of money. Which ever one I take I would not have to work another day for the rest of my life. And at that point, why not pick the option that removes all potential financial worry or even having to think about it in the slightest as well?
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$3,000 a day for life
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ThisIsIt posted...

@gloBal enemy posted...

ThisIsIt posted...

While TECHNICALLY because of currency devaluation over time, the 3k a day will be worth less, especially considering you could invest it.

what currency devaluation are you referring to?

For example from 1999 to now (20 years ago)

Our money is worth 54.00% less now than in 1999.

With Trumps tariff wow and the insane amount of currency manipulation going on. You can expect a much steeper drop 20 years from now.

But it says adjusted for inflation. So that doesn't matter here. It will always be worth 100% what $3,000 is worth now.
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3k. more than enough to live on and as long as i live longer than 18-19 years i'll eventually make way more than 20 mill.
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If you invest it smartly, you can probably get more with the 20 million right away
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3k a day and as another user mentioned. Invest whatever I dont use to get the same return as with 20mill but without worrying about the risk since worst case I will still get 3k per day.
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3k a day. Its just more psychologically rewarding to know that theres always money coming in no matter how much I spend, instead of just having a boring ol 20 mill laying around.
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3k a day in the terms that you say it, TC. It's basically broken, no matter what society or market we live in, we will always have 3k a day unaffected by inflation or taxed in any way. Additionally, we can pass it on to another generation like to an infant that'll receive it for another 90+ years if lucky.

All risks considered in our world I think having almost 100k a month untaxed and unaffected by inflation is better. People get caught up in the rush of receiving 20 million, a lot of us here would probably fuck it up badly pretty quickly.

Tyrannosaurus posted...

adjusted every year for inflation

The $3k/day then easily

Especially since it'll give me time to learn how to manage my money ;>_>
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3k easily. Guaranteed money every day

Last bump

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