# Would You Take $3 Million Now, or wait 6 months and get $20 million? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [January 11, 2010, 1:39am UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459 "2010-01-11T01:39:15Z")\ **Posts on this page:** 15\ **Page:** 7
**Author:** ![Cesario](https://avatars.discourse-cdn.com/v4/letter/c/ecae2f/32.png) [@Cesario](https://boards.straightdope.com/u/Cesario)\ **Post date:** [January 12, 2010, 6:11am UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/121 "2010-01-12T06:11:26Z")
By pushing the entire exercise into the future, you eliminate the primary reason many people here have chosen the 3 million. In the original offer, you can walk away immediately with the 3 million, and thus have no need to trust the other party not to change their mind afterward. By pushing it into the future, both options require that you put some degree of faith in the bargain, so you’re not choosing between a very real (however small) chance of getting screwed out of the deal versus taking a smaller sum you can’t get screwed out of (at least not by the deal itself). ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [January 12, 2010, 6:14am UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/122 "2010-01-12T06:14:14Z")
> [@Chessic\_Sense](#): > > But that’s assuming that a dollar is a dollar is a dollar. It’s not. That 300,000,001st dollar doesn’t increase your purchasing power as much as the first $1,000,000 does. So you can’t really calculate the discount rate the same way. The discount rate I’m talking about is calculated by finding out how much people would require to delay an award - exactly as in this case. The studies do show variation with the amount of the award - oddly, bigger awards go with lower discount rates. I certainly agree about the effect you mention, but I don’t think it has much of a role in this case. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [January 12, 2010, 6:27am UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/123 "2010-01-12T06:27:05Z")
> [@bonitahi](#): > > Seems like some would take the now cash, and a few more would take the $ later. > > Wonder how racial demographics, country one lived in, age group, IQ, gender, would affect the decision. > > To some it is a slam dunk. Others see it as a response to ponder before responding. > > I do not know which would be the ‘best’ decision. Though I know what I would do. I’d also be very interested in the state of retirement accounts of people on either side, since putting money in a 401 K or IRA is reducing money available now for a greater return later - though of course no where near as great as in this example. ---
**Author:** ![Iridescent\_Orb](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@Iridescent\_Orb](https://boards.straightdope.com/u/Iridescent_Orb)\ **Post date:** [January 12, 2010, 7:04am UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/124 "2010-01-12T07:04:46Z")
> [@Cesario](#): > > By pushing the entire exercise into the future, you eliminate the primary reason many people here have chosen the 3 million. In the original offer, you can walk away immediately with the 3 million, and thus have no need to trust the other party not to change their mind afterward. By pushing it into the future, both options require that you put some degree of faith in the bargain, so you’re not choosing between a very real (however small) chance of getting screwed out of the deal versus taking a smaller sum you can’t get screwed out of (at least not by the deal itself). Valid point, **Cesario**. Even if it is a government guaranteed lottery payout, there is no guarantee the government will not enact a new “lottery winner surtax” in the intervening years. Regarding the comments about the 20th million dollars being less valuable than the 1st million dollars, that is known as the _ **declining marginal utility of wealth** _. Essentially, a fancy way of saying you’ve already got everything you need, and are just going to buy increasingly frivolous junk. 😉 ---
**Author:** ![Gustav](https://avatars.discourse-cdn.com/v4/letter/g/919ad9/32.png) [@Gustav](https://boards.straightdope.com/u/Gustav)\ **Post date:** [January 12, 2010, 9:48am UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/125 "2010-01-12T09:48:42Z")
I can think of one argument against waiting; imagine waiting 5 months and get hit by bus and killed. Then you’d feel kind of silly. ---
**Author:** ![Lantern](https://avatars.discourse-cdn.com/v4/letter/l/d26b3c/32.png) [@Lantern](https://boards.straightdope.com/u/Lantern)\ **Post date:** [January 12, 2010, 10:13am UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/126 "2010-01-12T10:13:07Z")
Well assuming no uncertainty taking the 20 million is an easy answer. Assuming no uncertainty I would wait for six months for 3.3 million instead of taking 3 million today. ---
**Author:** ![MEBuckner](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mebuckner/32/2896_2.png) [@MEBuckner](https://boards.straightdope.com/u/MEBuckner)\ **Post date:** [January 12, 2010, 10:44am UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/127 "2010-01-12T10:44:22Z")
I’d probably wait six months and take the $20 million, but dang–some of y’all going on about how “Oh, $3 million isn’t hardly anything anymore”–you guys must be pretty high-hat, or at least high maintenance. $3 million, pretty conservatively invested (like in that Vanguard Long-Term Bond fund already linked to above) gets you $120,000 a year, which is a [higher income than over 80% of households in the U.S.](http://en.wikipedia.org/wiki/Household_income_in_the_United_States), and that’s _without_ having to actually work–if you’ve got one of those jobs you would actually do even if you didn’t _need_ to do it to pay the bills, then that’s just going to be gravy. To me, having enough money to live comfortably on without having to hold down a job is pretty much the definition of “rich”, and $3 million would definitely do that for me. Go on a $1 million spending spree (unless you just absolutely insist on a Beverly Hills mansion with a Lamborghini parked out front, you will be able to buy a really nice house, a nice new car, and indulge various other whims, albeit not of the “buy houses for every single one of your cousins” variety) and you’ll still have enough of a nest egg left over to generate an income greater than that of three-quarters of American households, plus you’d have a fully paid-for house. Yes, the $20 million would allow you to lead an utterly lavish lifestyle (or do many fine and noble works of charity), but I am a bit flabbergasted at the notion that getting 140% of what [an American with a college education will make in his or her entire lifetime](http://usgovinfo.about.com/library/weekly/aa072602a.htm) at one whack is peanuts. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [January 12, 2010, 1:30pm UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/128 "2010-01-12T13:30:16Z")
But here is the deal, you’d have to take about half of the $120k and reinvest it, to cover inflation in future years. Now you are living off $60k, which is a very average income. Not enough to pay for college for your kids (because with $3M in the bank, it isn’t like you are going to get financial aid). If you quit your job, you need to pay for your own health insurance. And, you have to pay taxes. So unless you are making around $40k a year $3M is not “change your life” money. Its “continue to work, and have a second adult income” money. It probably allows one adult in a two adult household to stay home with kids. ---
**Author:** ![flodnak](https://avatars.discourse-cdn.com/v4/letter/f/838e76/32.png) [@flodnak](https://boards.straightdope.com/u/flodnak)\ **Post date:** [January 12, 2010, 1:48pm UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/129 "2010-01-12T13:48:22Z")
> [@manila](#): > > It would probably take me six months to develop an investment plan and charity foundation. Yeah, me too. Not to mention figuring out which tropical island I want my luxury condo located on 😃 If you gave me three million dollars _right now,_ the bulk of it would sit in the bank for some months anyway while I figured out what I really wanted to do with it. If I’m not going to spend it right away anyway, I might as well wait for the larger sum later. The only thing I’d save by taking the money now, probably, is six months’ interest on our mortgage, and I don’t need to mention that that sum doesn’t even get close to eight figures. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [January 12, 2010, 1:58pm UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/130 "2010-01-12T13:58:38Z")
> [@Dangerosa](#): > > But here is the deal, you’d have to take about half of the $120k and reinvest it, to cover inflation in future years. No you don’t. The idea of taking only 4% is that normal level of growth in the remaining capital will cover inflation. If you take $120k and reinvest, then that is really the same as just taking $60k, or 2% While there are people who say that 4% may be too high in these low interest/low growth times, nobody advocates going as low as 2% ---
**Author:** ![robardin](https://avatars.discourse-cdn.com/v4/letter/r/43a26b/32.png) [@robardin](https://boards.straightdope.com/u/robardin)\ **Post date:** [January 12, 2010, 2:43pm UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/131 "2010-01-12T14:43:10Z")
> [@bonitahi](#): > > Would You Take $3 million now, or wait and get $20 million in 6 months? > > Guaranteed, either way. Consider it like a Lotto win. This would be net to you- after taxes. Your health and your family’s are good. No trick question. If the choice were yours which would you take? I’m surprised that anybody would forgo 17 million in a six month window. Six YEARS, maybe. But unless I was on the imminent brink of disaster, six months is a ridiculously short period of time. Or if I didn’t trust the offer and figured in 6 months the outfit would be gone, but here’s three million in a stack of $100 bills in front of me, but you explicitly said that was not a factor. ---
**Author:** ![Hypno-Toad](https://avatars.discourse-cdn.com/v4/letter/h/b2d939/32.png) [@Hypno-Toad](https://boards.straightdope.com/u/Hypno-Toad)\ **Post date:** [January 12, 2010, 2:43pm UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/132 "2010-01-12T14:43:15Z")
I’d wait for the 20. I have no urgent need for cash now. I can’t imagine a need so severe (short of, say, ransom) that I can’t delay it for 6 months and then fix it with the 20 mil. ---
**Author:** ![Elendil\_s\_Heir](https://avatars.discourse-cdn.com/v4/letter/e/7cd45c/32.png) [@Elendil\_s\_Heir](https://boards.straightdope.com/u/Elendil_s_Heir)\ **Post date:** [January 12, 2010, 6:22pm UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/133 "2010-01-12T18:22:21Z")
Just six months more? Hell, I’d gladly wait. I’m amazed anyone who’s not dying of a terminal illness would want a lot less money now. ---
**Author:** ![Hari\_Seldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hari_seldon/32/5173_2.png) [@Hari\_Seldon](https://boards.straightdope.com/u/Hari_Seldon)\ **Post date:** [January 12, 2010, 6:23pm UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/134 "2010-01-12T18:23:25Z")
Even at age 73, I would wait six months. Not six years, however. Sometimes I daydream what I would do with an extra million, an extra 5 million, 10, 50,… I cannot think what I would do with more than 5 however. ---
**Author:** ![zamboniracer](https://avatars.discourse-cdn.com/v4/letter/z/e9a140/32.png) [@zamboniracer](https://boards.straightdope.com/u/zamboniracer)\ **Post date:** [January 12, 2010, 6:28pm UTC](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459/135 "2010-01-12T18:28:45Z")
I look at the question this way: do I need a lifeboat now, or an ocean liner in 6 months? I’m lucky enough to be able to afford to wait the six months for the bigger payoff but I can understand how someone, several people I know in fact, who could be in dire straits enough that they’d take the smaller amount now to keep the roof over their head and their children fed now, rather than waiting. [Previous page](https://boards.straightdope.com/t/would-you-take-3-million-now-or-wait-6-months-and-get-20-million/524459.md?page=6)