Ok Mickie D’s now has a contest that the grand prize is a One Million Dollars. It is to be paid out in payments of Fifty Thousand Dollars a year for twenty years with no interest. But you have a choice of being paid in US Cash, Diamonds or Gold.
Historically over twenty years what’s the better deal?
Grace & Peace,
Brian Healy
Certainly not diamonds. Liquidating them would leave you
with a lot less money than what McDonald’s claims they’re
worth.
Over the last twenty years, probably not gold.
If the OP requires we keep the gold for twenty years, then
liquidate it all at once, which is the only way it makes
sense to me (if you were going to liquidate it each year,
it’s almost the same as getting the cash), I’m pretty
certain the cash would be the better deal.
To make it an apples to apples, you get to invest the cash
into whatever you want, then “liquidate” it at the end of
20 years too.
Twenty years of investing in an index-based mutual fund,
maybe moving toward bonds the last few years, would beat
the gold.
I would have to say the cash would be best because you would have to hire someone to tell you exactly how much this much gold is worth and you have to find someplace willing to buy that much gold or diamonds. Yep, cash is better.
Is this is McDonalds contest that was ruled a sham beause the people supposed to protect the winning tickets used the tickets themselves?
If so, they have a new contest might have new payment rules.
The posts above seem to be assuming that if you choose the gold or diamonds option that you would, upon payment each year immediately convert to cash. If that is the case, then it is obvious you would just take the cash and avoid broker fees.
However, if you think that in the really long-term diamonds or gold are you best investment option, you might as well take those. I don’t think you’ll find anybody willing to support that assessment, though.
The problem with diamonds in particular is that they are are always sold with a hefty mark-up. I doubt anyone would buy your million dollars of diamonds for more than $500,000.
Of course, if you take the cash, then you can spend as much of it as you like on gold, or diamonds, or artwork, or real estate, or anything else you might want, and you can change your mind what you want to spend it on at any time.