# What would you take? 2 Million in one payout or 4000 per week for the rest of your live

All following calculations use money with a currency symbol. Insert your local symbol there.

## The naive approach

A naive approach to the question would be the simple calculation of how long do you expect to live (in weeks) multiplied by 4000.

You will receive 2 million after 500 weeks or about 9 years, 7 month and 2 week. If you live longer than that, this clearly is better, because it is more, right?

Not really.

## The 100% investment approach

The actual numbers depend on how you use the money, but lets run some numbers: all money is invested at a interest rate of 8%.

In the left column is the number of year, in the middle the sum of one time payment plus interest.

amount of money | yearly interest | |
---|---|---|

year 1 | 2.000.000 | 160.000 |

year 2 | 2.160.000 | 172.800 |

year 3 | 2.332.800 | 186.624 |

year 4 | 2.519.424 | 201.553 |

year 5 | 2.720.978 | 217.678 |

So in year 5 you make just in interest 217.678, 4.000 a week would only be 208.000.

## Spending 1000 a week on living

What about spending 1000 a week on living, how does the math turn out?

amount of money | yearly interest | |
---|---|---|

year 1 | 2.000.000 | 160.000 |

year 2 | 2.108.000 | 168.640 |

year 3 | 2.224.640 | 177.971 |

year 4 | 2.350.611 | 188.049 |

year 5 | 2.486.660 | 198.933 |

year 6 | 2.633.593 | 210.687 |

So even if you spend all the money, you would get on a 1000 a week base, you still get more interest than you spend.

## Going on a shopping spree

What is the maximum amount I can spend assuming 8% interest and 2 million?

Basically you could spend the whole interest for a year, so 160.000 or 3076 a week and your fortune would not decrease from a number value.

That is less than the 4000 but you still got that 2 million as investment on top.

You have the inflation, so the same amount would buy less.

## Taking care of inflation

assuming the interest rate of 8% and an inflation of 3% you can get 108.000 a year (or 2076 a week) out of the investment and it will last about 50 years.

If you manage a bit better and stay below 98.000 a year (or 1884 a week), (increased by 3% yearly), you can enjoy it for 100 years.

Until then, you probably don't need the money any more and depending if we go the Star-Trek route, nobody needs money anymore.

## Wait, that's less than 4000 a week!

oops, slight turn of event, here.

No, not really. If you compound a yearly 3% increase of spending starting from 98.000 a year, in 100 years you end up spending 1.8 million a year or over 36.000 a week.

## Conclusion

If someone rich makes you this offer, take solution C and send him/her my way, I will take over and do the math.

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