If there are two companies, the first gives you 55% of the profits of your capital every 5 months and you can take your capital with profits after 5 months and renew it for 5 months again, and the second, gives you 5% of the profits of your capital every month for a year, and after a year you take your capital and you can renew, What would you choose? and why ? Tell the reason
55% every 5 months or 5% each month ?
- Thread starter IMishary
- Start date
ExperimentalSEO
Regular Member
- Mar 1, 2018
- 451
- 2,067
Neither because I don't want to be scammed.
The two companies are just fictions, I just want to hear your opinions
ExperimentalSEO
Regular Member
- Mar 1, 2018
- 451
- 2,067
If It was legit, if the 55% option was renewed just once $1 would become $2.40 and the 5% option each month would give you $1.60 by the end of the first year.
But what about investing the 5% each month, maybe you will get a lot more than the 55%, thanks for your point of view
D
Deleted member 1095690
Guest
I'd take the 55%. IMHO... Much better to get a big chunk of cash than a little dribble here and there.
good point
Maybe 55% is much larger and more comfortable, but what if you are a person who likes to work and needs liquidity? Do you think it is better for you to take the 5% and invest it monthly? Maybe you will get 300-400% in 5 months if you are good
as a businessman
RRunner
Power Member
- Sep 14, 2019
- 665
- 1,037
I edited my answer to show the numbers.
55% ea 5mo yields a much higher return than 5% each month.
If you are now changing the parameters to add 300-400% return after 5 months on one of the options you need to include that and change the formula.
What ? I meant, if you are getting 5% each month its mean you have monthly liquidity and you can invest it in stocks for example or in other places you like, maybe you will earn a lot of money, such as 300-400% and even 1000%,
Because you have 5% monthly liquidity, but if you choose 55% you will not have monthly liquidity, you must wait 5 months
So you cannot invest
(I mean to invest profits)
RRunner
Power Member
- Sep 14, 2019
- 665
- 1,037
You need to include all parameters.
55% every 5mo is a massive return. Hard to beat that with another investment.
Getting your capital + return in 5 months is still pretty liquid compared to other investments.
If you are concerned about liquidity don't invest all your capital. Diversify.
If you want to keep adding "what if" parameters then it is a meaningless exercise.
A good point of view
RRunner
Power Member
- Sep 14, 2019
- 665
- 1,037
Also in your original post, the 5% per month was less liquid because you could only get your capital back after a year, but the 55% return you could get your capital back every 5 months.
So, in your original scenario, 55% every 5 months was both a higher return and more liquid.
But I get the point you are trying to make of liquidity/flexibility vs being locked in to a long term commitment.