Having a debate with a few friends -

Choice 1
Starting tomorrow you are given $100 per day (adjusted for inflation) everyday for the rest of your life.

Choice 2
You are given $20,000,000 (at today's value) on your 65th birthday.


Which would you choose and why?

choice 2, I'm 64

don't spend it all in one place, sir.

Assuming it's tax free I could live on option 1 for the rest of my life really easily and do whatever the hell I wanted so yeah option 1 pls.

EDIT: Plus, me make it to 65? PFFT YEAH RIGHT

Choice 3: $200,000,000 on your 111th birthday

consumption-smoothing ftw..

36k/yr for life or 20 million at 65? hmmmm.

Take the 20 million on my 65th birthday, sell shares in it as an investment to get myself a tidy sum today.

exactly what i said.

my mates were saying the $20M so they could leave money for their people. my big argument is just that there is no guarantee you're going to live to 65.

plot twist i died

$36k a year may seem like enough to live on to a 20 yo single guy, but it's not much at all if you plan on having kids, owning a home and all that jazz. So you're going to have to work anyway, so just live your life as usual, knowing that when you hit 65 you and your family are financially secure. Easy choice. If you dont make it to 65, you wont care anyway.

Depending on your age, the cost of inflation makes taking the 20m likely an incredibly bad choice.

ya...I'm sure that any wife won't be cool with, "here honey, 36k I did my part. Now it's your job to bring us up to the median family income."

well...the point is choosing the best free money. I think people overlook the fact that $100 per day is $3k per month. That's mortgage payments, car payments, savings, etc. You can still work while earning this $100 a day.

Or...if you're single...you can live an okay life not working.

I just think 65 is an age where it would be pretty overwhelming to just suddenly have access to more money than you have time to sort out and enjoy. not even saying 65 is super old. it's just that a lot of your years are behind you.

several people i've talked to though say they wanna hold out for the $20M.

1 indeed $700 a week even if it's taxed.

There's a decent chance a now 20 year old will make it to 65 just to see that $20mio aren't worth anything..

Option 1 as no way I live to 65

im 25, i pick option 2.

then i'd sign over the rights to the 20 mil to a rich billionaire for 10 mil. $100 a day for me for the next 40 years id make about 1.5 mil. so i'd take the 10 mil loss on the 20 million for that any day.

Snap option 1. Can choose between hardly working, working parttime or working fulltime and having some nice monye to set aside.
Who cares about 65 if you have to work your whole life first?

SNAP option 1, seriously.

My wife and I are putting money into retirement funds with the hope that we'll end up with some fraction of $20M at that point. So I guess we've chosen some lousy version of #2 without realizing it.

Using inflation calculators, and the average inflation rates over the last 30-40 years of 3-4%, that 20 million would have the apending power of around 4-6 million in todays dollars. I'm pretty sure most people would feel thats a nice nest egg that they could use to live off of.

The thing about the 36k/ye is that its easy to say things like invest it all and live off your job and then youll have a gazillion dollars at 65. Which would be true. But life doesnt work that way. People spend what they have as they have it. As income increases, peoples lifestyles expand. Nicer cars, bigger houses in better neighborhoods, better schools for kids, etc etc. the truth is that almost no one lives well below there means and saves a ton.

lol thinking I'll have a wife and kids.

Its good you set your expectations at realistic levels. Thats key to effective financial planning.

100$/day its not even close (i just turned 26 today)

becomes alot closer when you get to the 45~ yr range

If the option exists to sell shared of the 20 million right away it makes things more interesting for sure

might wanna google compound interest

Do you know how attractive a relatively unhealthy 65-year-old with no other dependents and a sudden influx of wealth would be to a certain subset of the population?