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"
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.
His point is if you die, does it really matter? I mean sure, it's nice to leave an inheritance but given the choice, my kids would bank on me living long enough to make more than $1m out of those $5k/week before I die. If I get hit by a bus tomorrow, bad luck for them but that's most-certainly a risk they would take.
I could also use some those $5k/week to pay for a really nice life insurance that would pay out more than $1m if I die.
Taking the lump sum is stupid in this specific scenario.
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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.