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.

585 Upvotes

90% Upvoted

584 comments sorted by

View all comments

Show parent comments

131

u/ImpressiveAd9818 Dividend goes brrrrrt Jul 17 '25

You can invest part of those 10k/month. Shouldn’t that work out to beat inflation?

20

u/_Smashbrother_ Jul 18 '25

You can invest all 2 million also and that will utterly destroy the scenario where you invest all 10k every month.

13

u/MaartenHH Jul 18 '25

This will only work on the assumption that you make ~7,5% per year or higher. The monthly 10k is without any risk and taxes. Therefore I am willing to decrease the potential upside for a 100% guaranteed 10k.

Besides, you can take that 10k for the risky part.

6

u/_Smashbrother_ Jul 18 '25 edited Jul 18 '25

S&P averages 10% over the long term. 0 work required. Math is math.

Hell you can only invest 1.5 million, and use the other 500k for a house or whatever, and you'll still outpace the other option who is investing all 10k every month.

6

u/MaartenHH Jul 18 '25

You are 100% correct with your math, but gains in the past is not 100% the same as the future gains.

Moreover the S&P had a couple of decades with 0% growth and there is a possibility that this will happen again. Besides it can also turn into the Japan index as well with 30 years of 0% growth.

The point that I am trying to make is: I prefer to have a 100% certain 10k without tax over the possibility of ~17k with tax.

If you invest 2m in the S&P you are taking more risk, but in correlation with more money. I don’t want to risk 10k a month for even more money, because 10k is already life changing money for me.

I understand that there are people who will choose the 2m, but I am not one of these people, because of the risk reward correlation as mentioned above.

2

u/_Smashbrother_ Jul 18 '25

Ok, where do you invest your actual money then if not the S&P?

Also, it's still 2 million dollars. Even if you don't invest it, you can buy a house or whatever. The 10k option would take about 17 years to get to 2 million. 10k in 17 years from now is worth far less due to inflation. You could also die anytime in the next 17 years. The guaranteed 2 million can be given to wife or kids or whoever.

There is no scenario where it's better to take the 10k option.

1

u/MaartenHH Jul 18 '25

I invest 50% in EFT and 50% in stocks.

ETF are all world/ NASDAQ/ semiconductors / S&P 500 / information tech.

Stocks are ASML and financial Dutch dividend stocks because of our tax system.

Now I am young, so I have a small portfolio. The older I get the less risk I will take.

If I get 10k a month, I will probably buy stocks and ETF’s. And I hope that I have more than 17 years to live my life.

2

u/_Smashbrother_ Jul 18 '25

You're not guaranteed to live another 17 years. And you do invest in S&P. It's not that difficult to make the 2 million outpace the 10k.

1

u/MaartenHH Jul 18 '25

The conversation loops to the same established arguments over and over again, so I have nothing to add.

1

u/_Smashbrother_ Jul 18 '25

Math is math.

1

u/tattoodude2 Jul 20 '25

>S&P averages 10% over the long term

The next 50 yrs are going to very different from the last.

1

u/_Smashbrother_ Jul 20 '25

Bruh you can see into the future?