$2 Million or $12,000 a Month

Last week, I asked a question on Twitter, and the answers were fascinating.

I asked my audience to choose between two scenarios: Would you rather get a lump sum of $2,000,000 today or a guaranteed $12,000 monthly for life?

Apparently, most of my followers on Twitter thought it was an easy question because the answers were lopsided in favor of one of the options.

👉 Which one would you choose in this scenario?

Would you elect to take all that beautiful money at once or spend the rest of your life getting a guaranteed $144,000 a year?

$2 million lump sum vs. $12,000 a month for life

Let’s look at the pros and cons of each decision:

Pros of taking the $2 million:

  • Immediate wealth
  • Growth potential if invested

Cons of taking the $2 million:

  • No guaranteed income
  • Huge tax bill for year one
  • If invested, the market could crash

Pros of taking the $12,000 for life:

  • Guaranteed income
  • Investing is still an option

Cons of taking the $12,000 for life:

  • Not as much to invest now
  • Inflation will eat away at its spending power (if not invested)

There is no one right answer, but taking the lump sum is probably the better decision if you’re prepared to invest that $2 million with a long-term mindset. And for the record, this is what the majority of my followers answered.

The lump sum won handily. 👍

But if you’re risk averse, or you can’t trust yourself to NOT spend those 2 million Gs (hint: Give $2 million to the average person and they would be broke in two years), then the $12,000/month guaranteed income might be better.

Reply to this email: Which option would you choose? Are you getting the $2 million lump sum or those monthly $12,000 checks for the rest of your life?

Chat next week,

– Steve