WWYD: 1Mil yr job or wait for a check?

[Brian Fein]

I was just disputing that there was no upside to taking the money immediately.

That's not what I said.  I said there's no DOWNSIDE to waiting 3 years and taking the payment, except that you have to wait three years.  Like if someone told me "you're going to win the lottery in three years" why would I say "no thanks?"  Just because I'd rather win it today?  With the other scenario, the downside is another 10 years of stressful living, no free time, no family time, live to work until you save enough to retire.

[Sunstroke]

With the other scenario, the downside is another 10 years of stressful living, no free time, no family time, live to work until you save enough to retire.

Not sure how you got the "ten years" into the equation, because it was originally one year of the stressful job for paychecks equaling one million bucks...and the chance to keep the job. That would mean a million per year, as long as you can hack it. If I'm planning a family, I take the job, bust my ass for 5-6 years, and set my family up to be comfortable the rest of our lives.

[Brian Fein]

10 years comes from my perception that 5-6 million (minus living expenses during those 5-6 years) isn't enough to retire in today's market, and live another 30 years on it.  So I went with 10 years, expecting that I take home about 700k after taxes and I give myself 100k in living costs to support my family for a year.  So I get about 600k x 10 years = $6 million in savings. Even that might not be enough...

If I'm going to do this, I want to never have to work again.

[Phishfan]

^^^ using your current example (I think $100K a year is overestimated because you expect at some point you are going to drop your home and car payments but let's stay there). $600K for 6 years is $3.6M. If you divide that by your 30 year life expectancy and you get $120K which is still $20K over your annual estimation (which I for one think is high). You also have to account for the fact that this money isn't just sitting dormant, you would expect some sort of return but if we do that, we also have to expect the possibility of loss due to bad investment.

[Dave Gray]

I said there's no DOWNSIDE to waiting 3 years and taking the payment, except that you have to wait three years.

Right.  There is a downside called opportunity cost.  It's not just that you have to wait to spend it, it's that you are foregoing its potential earning power.  $1 now has more value than $1 in 3.5 years.

[Brian Fein]

I understand what opportunity cost is, Dave, but you're misinterpreting my statement.

There's nothing bad about getting a million dollars.  Regardless of when.

The other scenario requires you to basically give the next year of your life away to get the same million dollars.

When comparing the two scenarios, you may say that a year of your life is worth the opportunity cost.

However, consider the first statement on its own, and tell me what's bad about getting a million dollars for free without consequence.  If your statement is that you have to wait for it, then I say you are being too fickle.  If you give me 800k 3 years from now, there's still no repercussions.  You don't have to sacrifice/give away anything for it.

[BigDaddyFin]

Nah.  Give me the million dollar a year job.