Sure, but the expected return of the $2M is greater than $100k yearly, so you’re not really going to be able to get ahead with the $100k/year. Compounding then further tips the scales in favour of the lump sum.
I could live comfortably on a small fraction of that, so it would pile up really fast if I had long to live. Not going to be billionaire money, but easily in the “think about pouring that somewhere good” money.
The lump sum has the better expected return over time, provided that you don’t spend a large amount of it up front.
Or you could invest the $100K a year. You have to compare apples to apples.
Sure, but the expected return of the $2M is greater than $100k yearly, so you’re not really going to be able to get ahead with the $100k/year. Compounding then further tips the scales in favour of the lump sum.
For sure, assuming that the annual amount isn’t indexed to inflation. But the question is just simple math if it isn’t. See my longer answer.
Indexed, $100K/yr wins hands down if you’re young.
I could live comfortably on a small fraction of that, so it would pile up really fast if I had long to live. Not going to be billionaire money, but easily in the “think about pouring that somewhere good” money.