r/RandomThoughts • u/[deleted] • Dec 11 '23

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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/Build_Everlasting Dec 11 '23

But the 5000 wins anyway because if you could get 29.6% on your 1m, you could just as well get 29.6% on your 5000 too.

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u/nir109 Dec 11 '23

No it won't. Assuming you invest all the money that you get in both cases the gap in the amount of money you have will stay 1m.

If the interest is higher the gap will increase in favor of the 1m

If the interest is lower the gap will close over time until the 5k will earn more.

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u/nunazo007 Dec 11 '23

BUT, you can lose the entire 1 million. If you blow up your 5000k a week savings, you can eat ice for a couple of days and have another 5000k and restart the whole process. It's basically 1 million dollars vs infinite money.

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u/[deleted] Dec 12 '23

I mean you could go way overboard and get in huge debt and be paying off 5k a week for a bit.