Mr Stewart, Eighteen Months, Thousand Dollar discussed on The Ray Lucia Show

Automatic TRANSCRIPT

The timing of your own retirement as i said before the break it's one of the most important and worst decisions that many retirees make they make the wrong the decision so i'm oppose these two you fair enough i'm ready okay question number one you just learned that you were do a tax refund if you'd like you can get the thousand dollar refund right away alternatively can get eleven two hundred dollars and a refund ten months from now which do you prefer oh that's pretty simple it's a ten percent return in less than a year i'll take the deferred okay so you're not going to do a you're gonna take the money later i question number two you just learned that the era do a tax refund if you'd like you can get a thousand dollar refund in eighteen months alternatively can get an aide eleven 100dollar refund in twenty eight months now which do you prefer was really the same mathematics that may need the money more in eighteen months did i do now but again it's a ten percent return in ten months and i'll defer okay so here's what they say about that i by the way i answered the question is exactly the same way attitude questions are nearly identical each poses the same kind of choice of a second question postpones the two options for delivery by eighteen months while the first offers an option for immediate delivery the point of the exercises to measure the consistency of a person person's time preferences someone with consistent time preferences should answer both questions the same way as mr stewart did choosing the early option both times or the delayed option both times such consistency as a requirement for making financial plans that you stick with some people ever choose inconsistently they will take the larger tax refund if both refunds require a delay as in the second question but they choose.

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