You've just won some money...

[Guest]

I have one question, just to make sure I understand something. When you are talking about all optinos besides #1, you mean that you don't get some each year- you have to defer the whole thing till ten years later?

At first I assumed the question was like the Florida lotto. If you win $10 million, you can get an equal payout over 20 years, or you can take half ($5 mill) up front as a lump sum payment.

You mean though just one deferred payment, correct?

[PigDogg]

(grunyen @ Jul. 02 2007,17:51) You mean though just one deferred payment, correct?

That's my interpertation too Grunyen.

[stogie bear]

Yep - one guaranteed payment.

[Guest]

In other words can you wait or are you greedy/needy...

[Guest]

OK. I put down $10,000 now.
I would probably be OK with 6 months, or a year also.

As a economics geek, I factor a lot more than just the total value of money over time. There is the time elapsed in which you did not get to use the benefit of that money, and the possibility of a piano falling on your head whenever.

I also keep in mind my ability to still make money on my own. With 10, 15, or 20 thousand dollars, I could immediately get tools that I would like to have now, which would allow me to make more money- and enjoy what I was doing.

I could of course wait, and betting that I will live to a ripe old age, really live it up in my retirement. The problem there is living an uncertainty, muddling through with whatever mediocre life- with the "prize" at the end. I'd much rather live a whole life doing what I like, using the money now to construct the life I want to live, instead of just thinking of the money as a way to buy consumable goods that will make me happy with their consumption.

BTW, this question hinges on the concept I mentioned earlier, of Time Preference.
Although, I would say in my explanation that I am not wanting the lesser money now because I want to buy motorcycles and hookers, rather I want the money now so that I can control the investment in my life (not only for quantity of return, but direction).

[Groundhog]

I want my money now ... I'm goin' to Disneyland ... then I'm gonna make waffles ...


...except I just got this e-mail from Nigeria ... Wow! I can turn my $10,000 into $10 million ... I know it's important because its all CAPITAL LETTERS!


... see ya' later, suckas

[Guest]

mmm..... Waffles

[stogie bear]

The amount of between 10K and 100K is an appealing debate because it's a significant amount of money but not really a lot!

It's enough to appreciate and enjoy but not really enough to change our lives or retire on.

I could wait 10 years for a guaranteed 100K bonus! But I'm not quite sure what I'd do with it!