Take the money now or later ?

Discussion in 'Investor Psychology & Mindset' started by Ace in the Hole, 8th Mar, 2017.

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Which would you choose?

  1. 100k Right Now

    3 vote(s)
    7.0%

  2. 200k in 2 years

    2 vote(s)
    4.7%

  3. 350k in 4 years

    1 vote(s)
    2.3%

  4. 550k in 6 years

    7 vote(s)
    16.3%

  5. 750k in 8 years

    0 vote(s)
    0.0%

  6. 1 mil in 10 years

    30 vote(s)
    69.8%
  1. Ace in the Hole

    Ace in the Hole Well-Known Member

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    Everybody has different circumstances.
    Regardless of that, what would you choose?
    This is tax free cash.
    Do you cash in early and go for leverage, or sit back And wait for a larger payout.
    Don't forget about inflation, and tax on gains if cashing early.
     
    Ace in the Hole, 8th Mar, 2017
    #1
  2. Xenia

    Xenia Well-Known Member

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    Property investing is a form of delayed gratification and an investment in time. If you don't give it enough time you miss out on the full benefits
     
    Xenia, 8th Mar, 2017
    #2
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  3. MTR

    MTR Well-Known Member

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    What would you do?
     
    MTR, 8th Mar, 2017
    #3
  4. Ace in the Hole

    Ace in the Hole Well-Known Member

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    If we were starting out, I'd definitely take one of the first 2 options to get moving, could make more money that way after 10 years.
    Since we don't need the money and definitely don't want to pay more tax, waiting for the larger payout would be best for us.
     
    Ace in the Hole, 8th Mar, 2017
    #4
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  5. Bran

    Bran Well-Known Member

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    The benefit from 6 years onwards decreases for me when the successive reward stagnates. I think I'd cash in then.
     
    Bran, 8th Mar, 2017
    #5
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  6. MTR

    MTR Well-Known Member

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    cash in for me too
     
    MTR, 8th Mar, 2017
    #6
  7. Perthguy

    Perthguy Well-Known Member

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    No tax if you don't sell. I would put $50k each into 2 ETFs and $50k each into 2 LICs, so $200k for me please. I would not sell, so no CGT. I would top up every quarter and reinvest the dividends. I would have more than $1 million after 10 years.
     
    Perthguy, 8th Mar, 2017
    #7
  8. Blacky

    Blacky Well-Known Member

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    Tough choice.
    I would probably go $550 in 6years. But its a toss up beteen that and the $350k in 4.

    Any reason the incriments are uneven?
    100k, $150k, $200k, $200, $250?

    Blacky
     
    Blacky, 8th Mar, 2017
    #8
  9. Phase2

    Phase2 Well-Known Member

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    If I didn't think I could achieve a 15%pa compounding return, then I'd take the $1M in 10 years.
     
    Phase2, 9th Mar, 2017
    #9
  10. Perthguy

    Perthguy Well-Known Member

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    How much will $1m be worth in 10 years? ;)
     
    Perthguy, 9th Mar, 2017
    #10
  11. Phase2

    Phase2 Well-Known Member

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    Doesn't matter. You'd have to achieve 26% on $100k or 15% on the $550k to get close to $1m 10 years from now.
     
    Phase2, 9th Mar, 2017
    #11
  12. Ace in the Hole

    Ace in the Hole Well-Known Member

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    But what if you were a low income earner with no savings itching to get into property or business, and 100k could get you leveraged into 500k of assets.
    Many could turn that into 2 mil or more for in a decade.
     
    Ace in the Hole, 9th Mar, 2017
    #12
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  13. EN710

    EN710 Well-Known Member

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    Given my circumstances, I would wait for 10 and do other things in between.
     
    EN710, 9th Mar, 2017
    #13
  14. paulF

    paulF Well-Known Member

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    In the current economics outlook(low inflation,no wage growth...), i've been leaning at cashing out in the next few years(puts me in between the 4-6 years bracket above but been holding for 3 years now) in order to close down PPOR debt. Feels like it's the right time to do so and that way i'll free up my money to reinvest in other assets or maybe a business. Also, paying off PPOR debt would provide a better quality of life and financial well being.
     
    Last edited: 9th Mar, 2017
    paulF, 9th Mar, 2017
    #14
  15. Johnny Cashflow

    Johnny Cashflow Well-Known Member

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    But that's not guaranteed.

    Given my current circumstances I would wait for the 1 million
     
    Johnny Cashflow, 9th Mar, 2017
    #15
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