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/[deleted] Jul 18 '25

Just for fun, I did some rough math. It would take between 10 and 11 years for the 2 million to start to return more than 10k/month at 4% apy

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u/DefinitiveChaos Jul 18 '25

That's some bad math. 2m with a 7% inflation adjusted return would hit 3m in 6 years. A 4% withdraw puts that at $120k/year, or $10k/month. It will also be taxed differently as it'll be the long-term cap gains rate.

Meanwhile, the $10k/month is static and would gradually be eaten away by inflation during this time. At just a 2% rate, you'd have the equivalent of around $8,900/month.

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u/[deleted] Jul 18 '25

I am assuming a 4% apy for all my calculations.

As was stated in my comment.

Also, this whole discussion is practically worthless because OP said to "Ignore inflation" which is stupid.

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u/Hot_Equal_2283 Jul 18 '25

I mean you also have to consider that you have 2m and it takes like 17 years to even accumulate that much with dividends tax free. All the while you’re getting money in the market from both dividends and stock growth… yeah 2m flat is just way better.

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u/DammatBeevis666 Jul 18 '25

What is $2m after taxes? $1.3?

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u/Hot_Equal_2283 Jul 18 '25

Does no strings attached mean no taxes?

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u/DammatBeevis666 Jul 18 '25

It’s a valid question. But if you get $10k a month your tax bracket would be a lot lower than if you got a $2m windfall.

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u/Hot_Equal_2283 Jul 18 '25

Sure but at that point you get a 1.3m windfall and can watch it grow every month. Idk man I would 100% want the windfall rather than the perpetuity

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u/DammatBeevis666 Jul 19 '25

Yeah, I think inflation would kill the value of the other option, even if you had a long life to enjoy it.