What would you rather?

[zumbafanforever]

Lazy Sunday shower thought…

A) start with $300k inheritance in your late teens/early 20’s. Work a stable job where your annual income caps out at around $100-120k.

B) start with nothing. Go through the pains of living on a student budget, begin your working life on a modest income, but eventually in your early 30’s start hitting $150k salary, working towards $200k+ in late 30’s/early 40’s.

The question boils down to: how much is getting that initial leg-up worth?

Person B) will far out-earn person A). However, person A) could invest that money while living with mum and dad for another 5-7 years, getting a pretty significant head start so to speak.

 

[regent]

@zumbafanforever Assuming person A invests the inheritance and doesn’t spend it, they would probably have the more enjoyable life imo.

 

[judd04]

@regent

the more enjoyable life

And to me, that's worth more than the money.

Yes, I realise I'm in AusFinance. Yes I care about money. I just care how to maximise my money and life at the same time.

 

[polygon]

@zumbafanforever C. Lazy Sunday shower waynk

 

[zumbafanforever]

@polygon That can be done in addition to either scenario

 

[goodrage]

@zumbafanforever A could invest that whole 300k, set up a DRIP and put aside another 20k from work annually. You’d end up close to or greater than person B’s salary at roughly the same time but through passive income and then never have to work another day of your life.

Not even factoring in the investment portfolio that would be worth millions you could sell off as you age as well. Person B can (and should be) investing and could likely still end up in a better spot.

 

[lakmedipro]

@zumbafanforever Depends on the person and their needs on how much it’s worth. My life was A and that’s how I liked it. I left home at 17 because living at home was impossible. Getting money in my early 20s was a freaking God send.

 

[nicholson]

@zumbafanforever If I lived in a regional area, option A, if I lived in a major city like Sydney or Melbourne, option B.

 

[liamsmummy]

@nicholson Adding to this, if I was able to both stay at home and receive inheritance option B. If I couldn’t live rent free from parents option A.

Scenarios could be calculated using NPV.

 

[alitlite]

@zumbafanforever A for me, all day every day. When I was 20 $300k would have bought me a decent house where I live.

 

[jannda]

@zumbafanforever I was given everything I needed really, money, a house, bills and rent paid for and it made me lazy with no desire to work or study because I had felt like I had it all. I ended up really self-loathing and got a job after many years, it took me till 25, now I run my own business.

I think starting with less would make you more hungry for money, I can't think of a better way to word that but hopefully you get what I mean...