Categories Random Ten Thousand Dollars Post author By Chris Tingom Post date March 28, 2006 19 Comments on Ten Thousand Dollars Would you rather have $10,000 today or $1,000 for 15 months in a row? Why? By Chris Tingom Principal of Tornado Design, a Phoenix, AZ based web consultancy View Archive → ← The year of ugly design → In meetings 19 replies on “Ten Thousand Dollars” $1000 for 15 months in a row = $15,000 That’s a 50% gain! You’d have to be desperate to turn that kind of interest down. Like, really in need of money right now. Actually, if I really needed $10,000 that bad, I’d probably borrow it from somewhere else at a lower interest rate and use my incoming $1000 payment to pay it off. Even at a crazy 20% interest rate ($12,000 total loan cost), I’d come out ahead by $3000 at the end of 15 months, but I’d get to have my $10,000 right now. P.S. I know that the interest gets a lot more complicated than that when you start factoring in compounding and what not… But I just kept it simple for conceptual purposes. I’d rather have $10,000 now because 15 months from now I could use that $10,000 to make a lot more then I would have if I only got $1000 a month. the thought of having $10,000 right now is making my balls hurt. Either would be fine, but I would probably go for the $1000 a month. 🙂 $10,000 today, or $1000 per month for 15 months eh? Assuming you have no debt to service (such as a credit card) and with current interest rates at such a low rate, even the effect of compounding interest on the $10k is marginal. eg: in Australia using ING Direct there’s a 5.4% interest available for saving. This gives a future value of around $10,700. A $700 increase in value. If we choose to take into account this as a current value rather than a future value, it’s whittled down even more. Now, taking the $1000 and investing it in the same fashion month by month, you’ll come out ahead since the input amount (ignoring taking into account as current value over future value, acknowledging the relatively low inflation rate – in Australia atleast) is significantly larger. But as I said, let’s say you’ve got a credit card debt, where interest rates in the mid 20%’s are not unheard of. It is here where the lump sum upfront may prove a better method of paying off the debt. I would take the less amount over the more time. Only because of the fact that I tend to spend more when I have it, and I would save more over time if I did it over a longer period of time. Also depends on if the money is taxed. Absolutely the amount right now. The value of me having $10,000 right now far outweighs the monetary gains associated with waiting over a year for the amount to mature. For me the $1000 a mth would allow me a cushion to get up and running full time on freelance work but by the time you convert it to £’s then I wouldn’t have much change. It would still mean the same though… guaranteed income no matter what! By the way… is this an offer???? $1000 for 15 months in a row for two reasons. 1) Obviously it ends up being more. 2) Discipline. I’m more likely to blow the 10k in the time it takes to get $1000 in the second option. I’d go for the $1,000/month as well. Not only because it’s more money over time but simply because I could use that to cover my monthly bills. Obviously I would still be working and all that money would go towards paying off debt and frivolous things like drinking and eating. Question though, are we talking $1,000USD or local currency? If it’s USD that’s an extra $160/month in my pocket after exchange. That could go into my savings account just for fun ;^) I find it fascinating how everybody comes up with different answers to this question. I’d personally go for the $1,000 a month. I’d be hard pressed to come up with something that had a 50% annual return (or close to). And yes, it’s USD and no it isn’t an offer although that would be awesome. 😉 I’d take $1,000 for 15 months, but it actually might be better just to get $10,000 at once–I mean, in 15 months, the extra $5,000 might only make up for inflation. (Although, I don’t think inflation is quite that bad. Yet.) I’d take the $1,000 for 15 months. I’m at a place right now where a “steady” stream of money would be more beneficial than a huge chunk all at once. The $1000 for the 15 months. It helps protect against having the money burn a hole in my hands. 😛 The 1k per month would be the way to go for myself. That represents 1/3 of the business plan for a small one person studio. That means more time from creative and less time for uptight, retentive clients. Viva la independent publishing. … or rather more time FOR the creative and less time for picky, know-it-all clients. And oh yeah… Viva la independent publishing! Those of you who say things like “$1,000 a month, because of the fiduciary offset within the aggregation of amortized interest accrual” — you scare me. Those of you who choose $10k right now can come to my party. Sheez. Taking the $10,000, I know where to go to live for a year and a half where no one would find me. By that time I’d be solvent in the ..erh, uhm, unmentioned place, making change playing piano in dark, smokey places. The best comment was, notwithstanding this or the rest, the thought of 10,000 bucks making one’s balls hurt. Now THAT’s reality. Mine are quivering as I write. Leave a Reply Cancel replyYour email address will not be published.Comment Name Email Website This site uses Akismet to reduce spam. 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