5 ms·

Perhaps a frivolous comment, but I'd still rather take the $1M, and especially at 35. I'm a few years older and would still prefer the $1M now, even if it was c

Perhaps a frivolous comment, but I'd still rather take the $1M, and especially at 35. I'm a few years older and would still prefer the $1M now, even if it was clear this is my entire retirement contribution. I'd back myself over the next 20 years to turn that $1M into something worth considerably more. If I made a mess of it, I'd still hopefully have enough productive years left to salvage the situation. Whereas $5,000 per month is $5,000 per month forever. Unless you can live substantially under that amount and save a good chunk each month, you're never going to have capital to really grow.

tempestn 10y ago
Depends how you look at it. With the $5000/month you wouldn't have to work for money, so you could devote 100% of your time to whatever it was you wanted to start. Even if you needed capital, you should be able to get a loan relatively easily given your guaranteed 5k/month lifetime income.
- AstralStorm 10y ago
  Not a high loan of course. Banks do expect a risk of default over time on those. While with 1M as a collateral they might feel more venturesome.
  - tempestn 10y ago
    You would think so, but you might be surprised. A couple years back I was looking to get a mortgage. I own a profitable company that pays me a comfortable 6-figure salary and has for years, as well as having liquid savings greater than the total value of the house I was buying. Most of the savings are in a holding company though, so it made sense to get a mortgage rather than taking the tax hit of withdrawing the funds. While I did eventually get a mortgage, it was actually quite difficult, because my income was not "guaranteed". One lender even said something along the lines of, "Yes, you have that money saved, but there's no guarantee you won't spend it." And somehow the fact that I owned the company paying my salary made that income less reliable than if I was dependent on a separate employer. Even though by any logical metric I was far less of a risk than someone living paycheck to paycheck, the situation was outside of their regular mold, so they considered it risky.
readhn 10y ago
Ill take that 5000K per month, move to cheap state and reinvest 1.5K every month at 7%/year (ill find a way). In 23 years (58yo) i will save another million + will have spent 1million at 3.5K/month.
- AstralStorm 10y ago
  I'd you did the same with 1M you'd gain more due to big investment discounts and you may be able to diversify more easily.
  - readhn 10y ago
    but then id have to work for income since that 1 mil would be fully invested....
loeg 10y ago
If you already have some savings, the $5,000/mo guaranteed may make retirement feasible. Sure, eventually it'll be inflated to be worth less, but by then your other savings should have grown too. Also, Social Security kicks in at some point.

tempestn 10y ago

Depends how you look at it. With the $5000/month you wouldn't have to work for money, so you could devote 100% of your time to whatever it was you wanted to start. Even if you needed capital, you should be able to get a loan relatively easily given your guaranteed 5k/month lifetime income.

AstralStorm 10y ago
Not a high loan of course. Banks do expect a risk of default over time on those. While with 1M as a collateral they might feel more venturesome.
- tempestn 10y ago
  You would think so, but you might be surprised. A couple years back I was looking to get a mortgage. I own a profitable company that pays me a comfortable 6-figure salary and has for years, as well as having liquid savings greater than the total value of the house I was buying. Most of the savings are in a holding company though, so it made sense to get a mortgage rather than taking the tax hit of withdrawing the funds. While I did eventually get a mortgage, it was actually quite difficult, because my income was not "guaranteed". One lender even said something along the lines of, "Yes, you have that money saved, but there's no guarantee you won't spend it." And somehow the fact that I owned the company paying my salary made that income less reliable than if I was dependent on a separate employer. Even though by any logical metric I was far less of a risk than someone living paycheck to paycheck, the situation was outside of their regular mold, so they considered it risky.

readhn 10y ago

Ill take that 5000K per month, move to cheap state and reinvest 1.5K every month at 7%/year (ill find a way). In 23 years (58yo) i will save another million + will have spent 1million at 3.5K/month.

AstralStorm 10y ago
I'd you did the same with 1M you'd gain more due to big investment discounts and you may be able to diversify more easily.
- readhn 10y ago
  but then id have to work for income since that 1 mil would be fully invested....

loeg 10y ago

If you already have some savings, the $5,000/mo guaranteed may make retirement feasible. Sure, eventually it'll be inflated to be worth less, but by then your other savings should have grown too. Also, Social Security kicks in at some point.