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I would choose $1 million in year 1 due to the time value of money.
The other choice seems reasonable at first, but doesn’t account for inflation, time in the market, etc.
1 million dollars properly managed and invested, would allow you to live on the interest and most off the principal balance would grow. Properly managed money should outpace inflation at the very least. The assumption here is that “1 year of living“ is reasonable - no more than 100,000 - if this can be achieved with less, all the better. If it can’t, change the situation. (Move somewhere less expensive, live below your means, etc.)
With this approach, at the end of 10 years, you should still have a decent amount of the principal plus, you could start earning an income again and add to that growing capital. 2 replies
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