Quote:
Originally Posted by Macho0978
So you’re saying Johnnys career earnings will 100% be way more than $6 mil at age 36 plus that he will laugh at the extra $6 mil like it’s nothing?
What are you projecting his career earnings will be at 36 until he retires?
If he takes it now is guaranteed money
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Do you even compound interest?
If he were to invest that 9M/year for 8 years with an annual interest rate of 6% compounded annually, that contract is worth $103,421,843.85 by the end of the 8th year (for simplicity assume he receives the entirety of his contract at the beginning of the year).
If he were to invest that 11M/year contract with an annual interest rate of 6% compounded annually, that contract is worth $103,744,475.65 by the end of the 8th year - despite not having to have received any salary for years 7 and 8.
Now of course that assumes Gaudreau invests the entirety of his contract.
If we assume that Gaudreau doesn't have lifestyle creep as a result of the difference in contracts and say he uses 3M for himself each year that isn't invested, then it becomes even more pronounced as the 9M/contract sees his investment at $68,947,895.90 by the end of the contract while the 11M/contract sees his investment at $75,450,527.64 by the same period - again not having worked the last 2 years at all.
With any sense of financial fiduciary the 11M/year contract for 6 years is by far better than the 9M/year contract for 8 years. Just as long as he doesn't ask Fedorov or Jack Johnson for financial help.