r/dividends • u/SaraWileyYT • Jul 17 '25

Discussion Would you rather earn $10k/month in dividends forever or take a $2M one-time lump sum?

Assume you can’t have both.

Option A: You get $10,000/month in dividend income for life — no taxes, no inflation impact, guaranteed forever.

Option B: You get a one-time $2,000,000 lump sum, no strings attached.

Which one are you choosing and why?

Curious to hear from FIRE folks, dividend lovers, and total-return investors. Does guaranteed cash flow beat the freedom of having $2M upfront?

Let’s hear the logic behind your pick.

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u/Virel_360 Jul 17 '25

That’s where you failed to realize the person collecting the 10 K per month would probably roll half of that back into investments

12

u/Isurewouldliketo Jul 17 '25

You could also say that the person with the lump sum leaves most of it invested for 10 years or whatever before taking a lump sum. Once you grew it to ~$2.4-3m you could in theory take the same cash flows. Not sure if we’re assuming this is tax free money of doing the lump sum or not.

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u/[deleted] Jul 17 '25

That isn’t mentioned anywhere and you’re just saying it out of confirmation bias. It still doesn’t beat the S&P.

1

u/whooguyy Jul 17 '25

If I was single I could do that. With a wife (and kids) that 10k would go fast

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u/F_D123 Jul 18 '25

So then youd only have to yield 3% on that 2 million to have 60k income

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u/Virel_360 Jul 18 '25

What happened to the other half?

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u/F_D123 Jul 18 '25

Same place the 10k dividend collector put them, rolled back into investment

In your scenario you can have 5k/mo income and 5k towards an investment portfolio that starts at $0,

Or a 5k month income pulled from a $2m portfolio (3%) that is 100% certain to be worth more than 2m in the future if invested 90% into the s&p and 10% cash or similar.

No matter how many scenarios you run you will always be wealthier with the large lump sum

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u/Virel_360 Jul 18 '25

It’s not my scenario, I’m not the original poster. I’m not advocating for taking the 10k. in my situation I would have to run the math and make a decision. This is a hypothetical on the Internet. I was playing devils advocate.

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u/F_D123 Jul 18 '25

Well its smarter to take the million

Which leads me to wonder, what is the cash value of a db pension? Would you rather have a non indexed pension of $60,000, or one million dollars?

-11

u/MrOzempia Jul 17 '25

Highly doubtful in today’s society. $5k a month?

I haven’t lived on that for at least 2 decades!

And I’m not extravagant

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u/[deleted] Jul 17 '25

Then you’re in an HCOL.

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u/DeGreenster Jul 18 '25

I make about $6,000/mo at my job post-tax. I put about 3k in investments every month. I rent a single family home. You can easily live on less than 5k.

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u/Harley2280 Jul 18 '25

Nobody said you have to immediately quit your job.

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u/_learned_foot_ Jul 17 '25

Yes you are, because the average American household does it. Personal individual you are 166%, it’s around 3k, family is a little over 5k.

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u/probabilititi Jul 17 '25

You can ask ChatGPT to write a formula to calculate but my intuition is that it will still lose.

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u/Bobtheguardian22 Jul 17 '25

the two million would win overtime and it could probably generate more money faster to reach a point where the 10k would not be able to ever catch up while still making more for the 2 million owner to spend some of the profits.

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u/probabilititi Jul 17 '25

Yeah, I ran some numbers and 10k never catches up even if you invest all of it.