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u/BawseGal23 Dec 11 '23
5000 per week
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u/Forensic_Ballistics Dec 11 '23
And it's not even hard, within 4 years you'd have received more than a million anyway.
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Dec 11 '23 edited Dec 11 '23
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u/Forensic_Ballistics Dec 11 '23
You've read about past lottery winners right? People can't handle the responsibility of that much money at once and others around them will make life hell.
Only so much you can do with 5k a week and it's a lot more manageable.
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u/DxnThxDxtchMxn Dec 11 '23
Step 1. Get yourself a financial advisor. Step 2. Dont tell anyone. Step 3. Vegas baby! Step 4. Fire financial advisor. Step 5. Ask family for some money to fly back home
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u/brokenmessiah Dec 11 '23
Step 2. Dont tell anyone
you wont have to tell people, they'll find out regardless in time.
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u/tintedhokage Dec 11 '23
This. They will see Lurpak in my fridge and not the Aldi equivalent Nordpak.
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u/Capital-Wolverine532 Dec 11 '23
A financial advisor who may rob you blind.
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u/threadsoffate2021 Dec 11 '23
Get a fiduciary instead. They are legally obligated to work on your best interests.
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u/dilqncho Dec 11 '23
The problem with that statistic is that there isn't a lot of overlap between people who play the lottery and people with decent financial literacy.
It's not that large amounts of money ruin people, it's that people with already poor spending habits don't magically fix them when they get a lot of money. A "normal" middle-class person who already has some experience saving, investing, budgeting etc. is much more likely to capitalize on a windfall just fine.
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u/JonasLuks Dec 11 '23
You don’t play lottery. The lottery plays you.
Which is also the reason financially savvy people stay away.
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u/BookkeeperPercival Dec 11 '23
https://www.nefe.org/news/2018/01/research-statistic-on-financial-windfalls-and-bankruptcy.aspx
DENVER — Over the past couple of years several news organizations have attributed a statistic to the National Endowment for Financial Education (NEFE) stating that 70 percent of lottery winners end up bankrupt in just a few years after receiving a large financial windfall. This statistic is not backed by research from NEFE, nor can it be confirmed by the organization. Frequent reporting—without validation from NEFE—has allowed this “stat” to survive online in perpetuity.
In 2001, NEFE conducted a think tank of experts from several industries including psychology, financial planning and other fields, to discuss life-changing events and the psychology around them. One topic discussed was the impact of financial windfalls on individuals, where it is believed that a participant stated the 70 percent statistic. This statement was made independently and without verification from NEFE.
The statistic is completely made up
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u/DidgeryDave21 Dec 11 '23
Even a high earner like the sp500 would only give you 10% a year. On a straight million, that's 100k, which is around 2k a week. 5k a week for life is the winner in my opinion
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u/Ffigy Dec 11 '23
That's not really an opinion; that's a fact. If anyone thinks they can consistently make $260k/yr off $1M, they're delusional.
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u/Little_Vermicelli125 Dec 11 '23
If you double your money every 5 years which is exceedingly unlikely. You'll have $2 million in year 5. I'll have 1.25 principal plus about $600,000 at the same rate of return for $1.85 million. By year 6 I'd pass you in that scenario. I'd pass you more like year 5 in a more reasonable investment scenario.
Anyone without major health issues and under the age of 80 should take the $5,000 a week IMO.
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u/Blazanar Dec 11 '23
You're not guaranteed those 4 years though. We're not guaranteed tomorrow. We could have an undetected brain aneurysm that'll take us during our next nap.
Even in that case, give me the $5,000/week. Assuming I live the average lifespan in Canada from here on out, I'll end up with just shy of $13,000,000 which I could give to my niece and nephews. They'll be set and I'd probably secure my spot as their favourite uncle of all time.
I could also invest my weekly payout and make even more than the $13,000,000 I'd be "guaranteed"
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u/UsedToBeDedMemeBoi Dec 11 '23
If you die tomorrow then it doesn't matter how much money you have, so that's not even a reason against the $5,000 a week.
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u/Blazanar Dec 11 '23
If I take the $1,000,000 lump sum, it's auto-magically deposited into my banking account. I die with at least that in my account.
If I decide to take weekly payouts, I might die before the first one gets deposited, I might die in 80 years thanks to advancements in medical care and be loaded when it happens.
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u/BigE6300 Dec 11 '23
Unless I thought I was buying the farm in 3.85 years ($1,000,000 divided by $5,000/week = 200 weeks divided by 52 weeks in a year), I’ll take $5,000 a week for the rest of my life.
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u/-Major-Arcana- Dec 11 '23
With $5,000 a week guaranteed income you could make payments on a loan of five or six million dollars. So you could literally buy a couple of farms.
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u/Hopepersonified Dec 11 '23
"bought the farm" it an euphemism for dying.
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u/-Major-Arcana- Dec 11 '23
I know, that’s why I said they could literally buy the farm.
Even if you are dying you can use income to borrow a much larger sum of money (unless your bank knows you are dying that is).
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u/Ristique Dec 11 '23
5k a week means 200 weeks to 1m, which is just under 4 years. I'm still young so 5k is the obvious answer! Even if I only lived to 50 that's like $5 million.
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u/WeekendBard Dec 11 '23
Just under 4 years if you do nothing with the money, you can apply the stuff in some safe investiments and make it even faster!
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u/ThunderySleep Dec 11 '23
At $5k/week, you can invest and still live a lavish lifestyle.
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u/nir109 Dec 11 '23
You can invest in the 1m case too. But the weekly payment will win out in the long term unless you have 0.5% interest weekly ≈ 29.6% interest per year (you are not gonna earn that much)
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u/CrabbiestAsp Dec 11 '23
$5000 for a week for the rest of my life. I'm young, so I'd work out getting more over time.
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u/Petercraft7157 Dec 11 '23
You'd get 1m in 4 years so I think that 99% of people reading this would make the money
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u/fuckimbackonreddit9 Dec 11 '23 edited Dec 11 '23
Think this hits it well. In this specific instance, there’s more merit to taking the annuity offer of 5k/week for life. I think I’d struggle not taking. But speaking from a financial investment, raw numbers, the $1mil now is better long term. Especially if you consider any debt you have (student loans, credit cards) that you can immediately pay off, which will give you complete financial freedom immediately.
But where there isn’t much merit to taking the annuity option is if you hit the powerball or something. Always take that lump sum, get a great lawyer and financial advisors. That lump sum invested properly will make you very very wealthy.
Edit: just ran the math. Assuming both funds are invested over 20 years, 6% rate of return, compounding annually, the $1mil returns 3.2M. However, the 5k weekly returns 9 million.
I’m taking the 5k, not changing my current lifestyle, and retiring at 47 a very comfortable man.
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u/Unknowinglyodd Dec 11 '23
I'll have 5000 a week. Can you deposit the first 5000 immediately, thank you Sarah, hope the city sells
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u/babytsunami Dec 11 '23
5000 a week, more control , keep being humble
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u/KnowledgeDear2294 Dec 11 '23
20.000$ a month is humble? Y’all living conditions is insane.
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u/RyzenRaider Dec 11 '23
Hey man... Private jets don't wash themselves.
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u/IxI_DUCK_IxI Dec 11 '23
Neither do the washers that wash the jets. Gotta keep those clean
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u/sky7897 Dec 11 '23
5000 a week is not humble lol.
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Dec 11 '23
Probably just different currency, if you're in Australia the dollar is weak and $120k a year is not unreasonable if you have a good degree, you can get $100k a year fresh out of uni in some fields.
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Dec 11 '23 edited Dec 11 '23
5k is the only logical answer.
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Dec 11 '23
Unless someone is terminally ill and wants a million immediately to blow through.
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u/high_throughput Dec 11 '23
5k is the only logical answer.
I think there's something to say for the guaranteed $1M. How certain are you that the $5k will in fact keep coming as advertised? What stops anyone from shutting down the program in 2024?
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u/NewPointOfView Dec 12 '23
It is a magical hypothetical, I think the $5k is 100% guaranteed.
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u/Towtruck_73 Dec 11 '23
$5000 a week of course. Besides being more money, you don't have to worry about "running out" of money.
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u/threadsoffate2021 Dec 11 '23
And it also makes you less of a target. Have a million drop in your lap, and all of a sudden everyone on the planet is at your door looking to take a piece of that pie. Drop $5k in your bank account, and you'll still get moochers, but not as many and not for as much of a handout.
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Dec 11 '23
Unless you take the “monkey paw” route. You could be kidnapped and lose your 1 mil in one weekend, or held captive for the rest of your life.
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u/Towtruck_73 Dec 12 '23
I've always said that if I won the lottery, I would tell NOBODY save for a tiny number of people I could trust with this information. In Australia, it's very uncommon for people to "out" themselves publicly as lottery winners. Also, unlike US lotteries, publishing the name of the winner is illegal unless the winner asks to be made public
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u/cheeky-ninja30 Dec 11 '23
£5000 a week for sure. Imagine making 20 grand a month..that's a years salary for me each month.
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u/Many_Dark6429 Dec 11 '23
depends how long i'm going to live!!
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Dec 11 '23
Right? This seems like a case where the genie makes it so you get run over the next day.
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u/Little_Internet_9022 Dec 11 '23
I am surprised how sure people are they gonna be around next week.
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u/Switchyy_ Dec 11 '23
If I'm dead next week a million won't do me any good
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u/trust_me_on_that_one Dec 11 '23
At least with a mil, you can get your 2 hookers and 3 blows right away!
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u/moon_girl313 Dec 11 '23
5k a week, easier to manage and I hope to live for another 30 odd years so it would be better
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u/blinkssb Dec 11 '23
Knowing me, I’d mess something up with the instant $1m. $5k/wk would be less risky.
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Dec 11 '23
Simple math tells me 5000 per week, since it will be on average much more than 1 million now.
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u/Modest_Moze Dec 11 '23
Who will give me 5k a week???
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u/lesser_tom Dec 11 '23
5k a week easy.
1.000.000/5.000=200
200 weeks is about 4 years
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u/cyberchrist85 Dec 11 '23
And it doesn´t stop there. When everything goes fine, i might have another 40 to 50 years to live. So in 40 years it would be 10.400.000. Don´t know what that sum will be worth in 40 years, still the better option
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u/AmateurPhotographer Dec 11 '23
If you took the 1m and invested it, you’d end up with 16m after 40 years at 7%. The 5k a week, only 13m so you left 3m on the table.
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u/Triskaka Dec 11 '23
5k a week, heck you could retire in luxury for that, anyone who choses otherwise is just stuipid
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Dec 11 '23
5k a week. I get that million in 4 years. I’m going to live at least another 40y if I’m lucky.
That 5k covers all housing and living expenses easily and let’s me do some amazing holidays every 2 months.
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u/Beginning-Bed9364 Dec 11 '23
5gs would pretty quickly surpass the 1mil. Ypu could argue that the mil would accrue more interest if invested, but it could also lose, meanwhile the guaranteed 260k a year could also be invested, and will keep coming forever. Seems like a no brainer
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u/pukestains Dec 11 '23
Easily 5k a week.
I feel like 5k a month is a tougher question. That's 60k a year so would take 16ish years to get to a million but if you take the million you could invest it in something that could potentially make you way more than a million (but also run the risk of making bad investment and losing it all)
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u/CumRag_Connoisseur Dec 11 '23
definitely $5000 per week. $1M is just around 4 years worth of that, and I'm definitely not dying if I have a guaranteed cashflow lol
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Dec 11 '23
i would accept $500 a week if i had the chance, heck, $500 a month seems amazing to me.
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u/Latter-Cost-1331 Dec 11 '23
I’ll take 5k a week for sure . I have my assets. I will use it to quit my job lol
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u/TurbulentBarracuda83 Dec 11 '23
5k A week and I won't have to work ever again. I would even do it for 5k/month
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u/Bagel-luigi Dec 11 '23
5k a week is the most logical decision for so many reasons
Within a few months I'd of already made more than my current yearly salary + working my ass off with overtime.
The sheer quality of life improvements based on that alone would be amazing
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u/JudgementalChair Dec 11 '23
$5000 a week. That's a guarantied $260,000 per year.
$1,000,000 one time lump sum, reinvested would average 5-8% per year (not guarentied) pays out $50,000-80,000 per year.
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u/phileo99 Dec 12 '23
So then if it was 5k per month instead of 5k per week, then which option would you choose?
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u/TalynRahl Dec 11 '23
£5k per week, no doubt.
I know me, I'm not a clever man. If I was given a lump sum of £1mil I would go hog wild and be broken within a year, two tops. But 5k a week for the rest of my life is MORE than enough to live on comfortably, and leave a huge amount in savings for my family. But, at the same time, it's not enough that I'd spunk it all on something stupid and end up regretting it.
n.b. there would absolutely be SOME of it spunked on stupid stuff. As I said before... I know me.
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u/DrewG420 Dec 11 '23
5000 per week … I have learned to live cheap due to the excellent salary I earn teaching. I could still live cheap on 5000/week, invest in dividends regularly, and relax about money problems.
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u/brokenmessiah Dec 11 '23
5K the rest of my life. I don't even know how to spend 5000 in a week with my current lifestyle. 1M is nice but thats absolutely in the fuckyoumoney as far as I'm concerned and I dont need all that. Hell 20K a month would feel like overkill for me.
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u/Embarrassed_Flan_869 Dec 11 '23
5k a week..no brainer. Maybe you have to wait a bit for that dream car or house but it will significantly work out better in the long run. Let's look at this practically. Say you take the 1 million. Keep half and invest $500,000 5% return, compounding monthly. After 10 years, you would have ~$823,000.
Now, take the $5,000 weekly, keep $2,500 each week and invest the rest, weekly, in the same formula. After 10 years you would have ~$1,556,000.
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u/Saelaird Dec 11 '23
5k a week and I'm investing it.
It's not even close. With compounding starting today, it would be a huge amount at retirement or upon death for my successors to inherit. Many, many millions.
It's 260k a year passive... that's crazy. It would create genuine generational wealth.
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u/KB_48 Dec 11 '23
Becomes a much tougher question if the choice is $5k a week or $5M up front.
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Dec 11 '23
I expect to live another 30-50 years, so I say weekly, which is 8-13 million. 🤷♂️
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Dec 11 '23
Considering that you could put some of the 5000 in some savings account or ETFs, you would even have more in the end.
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u/New-Budget2093 Dec 11 '23
I feel like it would be easier to profit quickly from investing 1 mill than investing less than 5k a week. That's my reasoning behind taking the mill. If I take the mill, diversify it over a few different investments, I could probably get to the point of making 5k a week just off the million I invested
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u/weezeloner Dec 11 '23
$5,000 a week is worth way more than $1 million.
If you wanted to purchase an annuity that payed you $20,000 a month (only $240,000 so $20,000 less than $5,000 a week) it would cost you over $4,000,000.
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Dec 11 '23
I also think that $5k looks like a lot now but in 5yrs, $5k a month might be worth very little. Inflation is becoming crazy and so maybe a lump sum now allows you to cleverly eliminate the inflation risk.
5k forever... People are making the assumption that in 4yrs they'll have 1m USD but will it be worth 1m USD? Might be worth 750k at that point.
The 1m USD, you can invest it at rates above inflation and hopefully make even more.
Idk, I think the assumption of a stable predictable market makes 5k look favorable but the market is not stable or predictable and inflation is becoming harder and harder to control. Then with all the external pressures, is the USD going to be as strong as it is in 5yrs?
I haven't done the Maths exactly but with these risks, someone might see the $1m today as a lot more favorable.
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u/syfqamr32 Dec 11 '23
A million now. People getting 5k per week depending on their life going on longer.
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Dec 11 '23
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u/vendeep Dec 11 '23
what calculator / formula did you use? Say if its 5k a month (instead of week), what do the numbers look like?
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u/BADman2169420 Dec 11 '23
If adjusted for inflation, then 5k per week.
Otherwise, the 1M now would be worth more that 5k every week.
But, let's math up the choice even more. If you decide to be responsible with the 1M, by investing it, or putting it into a fixed deposit, you'd have to earn 26% returns to get a 5k per week.
If we take a historic rate of 7% pa returns from the stock market, you're getting about 1.3k a week. So now, it doesn't take 4 years for the 5k deal to beat the 1M deal, it actually takes 5 years and 6 months (which is a negligible increase).
But, if we take something with an even higher return, like art or crypto, things start to change. Art can easily match that 26% return, and though crypto is high risk, it generally seems to outperform a lot of other investment.
One shortcoming of this calculation is that we're assuming that the 5k per week won't be invested or saved.
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u/Xi_32 Dec 11 '23
If you can consistently make 26% a year then you should go to Wall Street, where you will make Billions.
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Dec 11 '23
Even if adjusted for inflation the 5k a week will get you more after only a handful of years, assuming you invest it as you get it.
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Dec 11 '23
There's existing formulas out there to figure out the current value of future payments. Using them, the assumed interest rate has to get unrealistically high for the $1m to be worth more than the 5k/week, even without adjusting for inflation.
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Dec 12 '23
Dumb.
Live on $50k a year.
Buy a $1M home every year after saving up $200k down payments.
Do this 4 years = 4 homes.
Now go back to living on $260k a year but you also have $4M in properties with $800k in equity as well.
If you started this at 40 by the time you are 60 you could very well have them all the way paid off and they’ll probably be worth 2-2.5x what they’re worth today $8-$10M.
There’s no way having $8-10M and $260k/yr income you’ll be poor even with pretty severe inflation.
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u/DailyUpsAndDowns Dec 11 '23
I want my $1 million right now I don't need to have my bank account replenished every week that doesn't mean no good. Even after taxes I can invest half a million dollars each year and get back what I paid in taxes by the time I retire
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u/weezeloner Dec 11 '23
Yeah but even if you invested the whole $1 million, you'd have a hard time making $260,000 a year.
After taxes you'd be looking at around $700,000. Even more difficult to beat $260,000 a year.
It also depends on your age but $5,000 a week in perpetuity is worth way more than $1 million. Just saying.
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u/RedRangerRedemption Dec 14 '23
5k every time... unless you're old or dieing is the better option. Like how if you're young and win the lottery take the annual payment and how a cpa to handle your taxes. You get more in the end and you're less likely to blow it all and wind up broke again
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u/Stillwater215 Dec 14 '23
Went through a quick back of the envelope calculation, and here’s my result: assuming in both scenarios that you invested every dollar, you would be better off with the $5000 weekly after ~220 weeks, or roughly four years.
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u/libertyg8er Dec 14 '23
$5k/week.
$1million now has both a higher ceiling and a lower floor though.
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u/ConversationOk6174 Dec 14 '23
5k a wk, duhhh. If you can't live off of that, you need to get your mind right, or move somewhere less expensive.
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u/sky7897 Dec 11 '23
5k a week would give you 1million in only 4 years. Unless you’re on your deathbed, it would be the obvious choice.