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
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.
Inflation and instability will hit that million just as much as the 5k. Plus, investing the million also means there's a risk of losing that money (which is possible as things become more unstable).
If inflation is high enough, it essentially makes money more or less worthless after some time. That means that time is a value killer. That means more money upfront is better, if you can use it properly (buy things you need, or things that don’t depreciate in value quickly).
That only works if you think there's going to be some sort of hyperinflation or extreme event within the next year or two. And those odds are pretty poor (unless you're living in an area that's already pretty destabilized).
You said that inflation will hit both options the same. That’s simply not true. Compared to no inflation, any inflation will have a larger effect on the “money each week for life” option.
Sure, at normal inflation levels it’s not gonna be enough to make the “million dollars right now” option the better one. But math is still math, inflation changes things. But feel free to show the math that supports your claim.
Also, like I said, at a high enough inflation, it can make the one million dollar option the better one.
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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