Also should be noted, if you took that 1 mil and just put it in a bunch of high-interest savings accounts, you’d be averaging a little over $3k/month just in the interest earned.
It does make me wonder, at what point is the guaranteed $x a month a better call than one lump 1 mil?
You don’t need a degree in finance to do this calculation. You are simply looking for the present value of a stream of income.
It depends on what interest rate you think is “risk free”. Right now treasuries range from 5% to 3%. Just divide the yearly dividend (12 * 50) by that interest rate. $50 per month risk-free in perpetuity is worth $12,000 to $20,000.
Donkter@lemmy.world 1 year ago
For anyone curious (1000000/50)/12 is 1666.66 which is how many years you would have to live to make a million dollars.
kurwa@lemmy.world 1 year ago
Whoever thought that $50 a month is any sort of good income is brain dead.
TheLameSauce@lemmy.world 1 year ago
Also should be noted, if you took that 1 mil and just put it in a bunch of high-interest savings accounts, you’d be averaging a little over $3k/month just in the interest earned.
It does make me wonder, at what point is the guaranteed $x a month a better call than one lump 1 mil?
KevonLooney@lemm.ee 1 year ago
You don’t need a degree in finance to do this calculation. You are simply looking for the present value of a stream of income.
It depends on what interest rate you think is “risk free”. Right now treasuries range from 5% to 3%. Just divide the yearly dividend (12 * 50) by that interest rate. $50 per month risk-free in perpetuity is worth $12,000 to $20,000.
SuddenDownpour@sh.itjust.works 1 year ago
Put it in safe low-interest investments and you’ll likely still be making far more than $50/month