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What woud you choose?
- Thread starter Kronie
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I'd take the $190,000 and put it in an investment that would yield more than $269,000 at the end of 20 years... probably.
My local bank has a 25 month CD at 3%... and I'm sure you could even find better than that if you looked.
25 months later I'd be at $202,238
then 215, 264
(and lazy math at ~ $13,000 every 2 years...)
228,000
241,000
254,000
267,000
280,000 - 14 years...
After 20 years you'd be at $345,943
Those seem like kinda odd numbers though... are you faced with this decision?
My local bank has a 25 month CD at 3%... and I'm sure you could even find better than that if you looked.
25 months later I'd be at $202,238
then 215, 264
(and lazy math at ~ $13,000 every 2 years...)
228,000
241,000
254,000
267,000
280,000 - 14 years...
After 20 years you'd be at $345,943
Those seem like kinda odd numbers though... are you faced with this decision?
What if I tripped over the cat and broke my neck on the way into the house after cashing the first $1120 check. That would be so like me.
Nope. $190k to invest. Much mo' betta idea for this klutz.
Nope. $190k to invest. Much mo' betta idea for this klutz.
It's been said already, but it bears repeating.
Take the money now.
With that kind of cash, you can invest $165K and use $25K to buy a new reliable car in cash.
No debt. Which means no investments actually losing money because you're sending money on interest payments to somebody else.
You wouldn't believe the number of people with a few grand on a credit card at 12% who think that their 3% yield on their savings account is a better place for their money.
The 1120/mo is "guaranteed" until it's not. What is your recourse if payments cease? Who takes over the stream of payments if you become ill? What happens if the fund/bond that covered your 1120/month is improperly handled by the original investor?
No. Take that money and run.
Take the money now.
With that kind of cash, you can invest $165K and use $25K to buy a new reliable car in cash.
No debt. Which means no investments actually losing money because you're sending money on interest payments to somebody else.
You wouldn't believe the number of people with a few grand on a credit card at 12% who think that their 3% yield on their savings account is a better place for their money.
The 1120/mo is "guaranteed" until it's not. What is your recourse if payments cease? Who takes over the stream of payments if you become ill? What happens if the fund/bond that covered your 1120/month is improperly handled by the original investor?
No. Take that money and run.
Not quite. Governments (state and federal) get a piece of it first. Hire an accountant to do the real math. Of course, he/she also has to analyze the tax implications of the monthly payout, which is more difficult since you would have to predict your future income from other sources.
190K cash.
Then maybe I could actually go to the college of my dreams.
Or you know, any college.
Then maybe I could actually go to the college of my dreams.
Or you know, any college.
Yeah, over 20 years, inflation will greatly de-value that $1120/month. With proper investing, you can easily beat inflation plus a lot more.
You are almost always better off taking the lump sum. Pay all the taxes up front and invest.
I say almost always because of this. Some people are not very diligent, budget -minded, or whatever you would like to call it. If you are this way and you think you would blow throw a lump sum quicker than the payment plan, by all means, take the payment plan.
If I ever win the lotto, lump sum, invest, live cheap, and live happy. Oh, and live off interest. I already do some of that right now. Live cheap and happy. I would just have a higher standard of living. haha.
I say almost always because of this. Some people are not very diligent, budget -minded, or whatever you would like to call it. If you are this way and you think you would blow throw a lump sum quicker than the payment plan, by all means, take the payment plan.
If I ever win the lotto, lump sum, invest, live cheap, and live happy. Oh, and live off interest.
I already do some of that right now. Live cheap and happy. I would just have a higher standard of living. haha.
It might not be that simple.
If this is a "winning" like a lottery, you will have to pay a hefty tax on the lump sum. However, the distributed method would depend on how much other income you get during the 20 years.
Well, in the US you "deduct" a loss.
That means that it will offset your other income. But there are sometimes details.
Earn $50,000, gamble away $50,000, you own no taxes is the ideal. But they throw in special cluases like certain losses can offset only specific type of gains.
Well, maybe. Under "normal" circumstances, yes. Remember, "past results are no guarantee of future performance" - as They say.
