11 hours ago
(Yesterday, 05:11 PM)sandwedge Wrote: So answer me this, what is the difference? IF I have a contract that say I am to be paid $30M guaranteed for the life of this contract, 18M at signing 12M at the beginning of year 3 or 15M now and 15M later? You are still gonna get 30M
$18m now is $3m more than $15 now. That's a big difference.
That's $3m that YOU get to make money off of through investments for 2 years instead of the team making money off of it before you get it. Say you make a conservative 7% off of it in year 1 and then 7% more in year 2.
You just turned that $3,000,000 into $3,434,700. So you get +$434,700.
Meanwhile say you DON'T get that $3m now and instead you get it two years from now... inflation is a thing and that $3m will be worth less than it was two years ago. $3m in 2023 is now equal to $3,165,043 in 2025. So not only are you losing the opportunity to make money on your money, you're also having your eventual payout be worth less.
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So between the two, it is a ~$599,743 difference on if you get that $3m today or if you get it 2 years from now.
(Obviously this is a little simplified and there's a lot more things involved in it, but the premise is the same.)
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