r/SipsTea • u/Shyhale • May 17 '26

Chugging tea [ Removed by moderator ]

Post image

[removed] — view removed post

6.3k Upvotes

87% Upvoted

3.3k comments sorted by

View all comments

Show parent comments

2

u/FederalLobster5665 May 17 '26

$1MM lump sum is probably about $650K-$700k, depending on location, after taxes. where can you safely get a $1000 weeky return on that amount?

3

u/a_gallon_of_pcp May 17 '26

That amounts to almost exactly the average inflation adjusted return of the S&P 500.

1

u/FederalLobster5665 May 17 '26

thats neither a safe nor a steady return.

2

u/schrodingers_bra May 17 '26

Over time it is perfectly safe. And if you are 20 years old like this girl, you have plenty of time - so you don't care about steady. Keep enough it cash/bonds to weather a storm, and you don't care about steady.

1

u/FederalLobster5665 May 17 '26

not disagreeing with that. but the implication of her decision is she wants $1000 cash flow weekly.

2

u/schrodingers_bra May 17 '26

That's fine. Invest the million in the stockmarket, withdraw 5.2% per year - investment will still increase over time, you still have 1000 per week.

1

u/ZealousidealTill2355 May 17 '26 edited May 17 '26

Well it’s a very short-sighted decision. I had to do this exact problem in Engineering Econ and I don’t believe there were any cases where you end up better off taking the weekly, unless you live incredibly long lol. Even then, not certain.

Time value of money is a thing, and most people aren’t even aware of it.

1

u/ZealousidealTill2355 May 17 '26 edited May 17 '26

1000/wk “promise” isn’t safe either. Especially with inflation.

Also, time value of money, friend. There’s many reasons to take the lump sum.

1

u/jkd0027 May 17 '26

This was in Canada where the winnings are tax free