Which one would he/she choose?

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samanasuenos

Bronze
Oct 5, 2005
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Just hypethetical here....

let's say a local Dominican, earning roughly 8,000 pesos a month, male or female (you pick!), wins a lottery.

He or she can choose from the following prizes; which one is chosen, and why?

1. A brand new Bling Bling Jipeta, worth 750,000 RD Pesos.
2. A home in the RD built to her specs, worth again .... 750,000 RD Pesos.
3. Or ... a monthly stipend of 5,000/month, for 240 months/20 years.

Please answer by first indicating that you are speculating on the choice made by a Male or Female.

If you want, you can add a little description of their life (hypothetical).

Lastly, please indicate which prize heor she would choose, and give some reasoning.

I suspect and hope that this will inspire some debate.

Thank you for your input!!
 
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Ricardo900

Silver
Jul 12, 2004
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This is dumb, different dominicans will choose different choices, you can ask the same question if it applied to an american living in a trailer park and working in a mine for $7hr. But I'll play along, definitely not #3
 
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ricktoronto

Grande Pollo en Boca Chica
Jan 9, 2002
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The present value at 7% p.a. compounded monthly of #3 is only RD$644,000. Take the cash from 1 or 2 and invest it and get RD$5,814 per month.
 
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samanasuenos

Bronze
Oct 5, 2005
657
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Dear Ricardo, I apologize if any offense was taken, none was intended.

Yes, we can apply the same questions to Americans in a trailer park, or Section 8 Housing, or in their own small home: black, white, Asian, Mexican American.

I in no way meant to say that Dominicans share anything in common with American Trailer Trash, for example.

When I spend time with family friends in the RD, (that's where I grabbed the income amount) everyone comments on new jipetas that they see and I often hear people lusting after the jipetas.

I sometimes hear folks daydreaming of a newer and better house.

So, I just wondered. And I threw in the stipend for kicks.

Now, if it will appease you, would you like to define prize #4 in a way that will make this game a little less "stupid" - I extend the offer to you....
 
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Larry

Gold
Mar 22, 2002
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Ricardo900 said:
This is dumb, different dominicans will choose different choices, you can ask the same question if it applied to an american living in a trailer park and working in a mine for $7hr. But I'll play along, definitely not #3
Click to expand...
Well, strictly from a pragmatic point of view, #2 would be the correct choice...even though you would not get much of a home for that. Even though #3 adds up to more money at face value....it is the worst choice. How much will 5,000 rd be worth say, 12 years from now?... even assuming the exchange rate was stagnant, inflation would shrink your stipend considerably. The home you bought by picking #1 would be worth substantially more 20 years from now AND you would have had it to live in over those 20 yrs.

Despite the above, I would assume many making 8,000rd per month would choose the yipetta.

Larry
 
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liam1

Bronze
Jun 9, 2004
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you should be more specific when you say "a local Dominican". it all depends on their level of education and a few other things, but i'd say most would choose a brand new Bling Bling Jipeta. a house worth 750,000 RD Pesos? what kinda house can you get for 750,000 RD? and a monthly stipend of 5,000/month, for 240 months/20 years. 20 years? not really.

i'd say they'd choose the jipeta, drive it around as long as they can afford the gas, then sell it for half what it's worth and blow the money on something else.
 
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samanasuenos

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Oct 5, 2005
657
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OOPS! Rick....

ricktoronto said:
The present value at 7% p.a. compounded monthly of #3 is only RD$644,000. Take the cash from 1 or 2 and invest it and get RD$5,814 per month.
Click to expand...


Rick, I must be losing it. I was thinking that the payouts would equal more like : 5,000 x 12 x 20 = 60,000 x 20 = 1,200,000. Am I wacked here?

1,200,000 would be more than 1 1/2 times the value of the house at 750,000.

HELP!!!!!!!!!
 
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HOWMAR

Silver
Jan 28, 2004
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samanasuenos said:
Rick, I must be losing it. I was thinking that the payouts would equal more like : 5,000 x 12 x 20 = 60,000 x 20 = 1,200,000. Am I wacked here?

1,200,000 would be more than 1 1/2 times the value of the house at 750,000.

HELP!!!!!!!!!
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How about 20 years of appreciation on the house? Take the house and rent it. Pocket the current income and cash out at the end on the appreciation.
 
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rellosk

Silver
Mar 18, 2002
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samanasuenos said:
Rick, I must be losing it. I was thinking that the payouts would equal more like : 5,000 x 12 x 20 = 60,000 x 20 = 1,200,000. Am I wacked here?

1,200,000 would be more than 1 1/2 times the value of the house at 750,000.
Click to expand...
Ricktoronto's point was if you took the 750,000 and put in in a bank, you would be able to withdraw 5,814 per month for 20 years. Your calculation would yield slighty more than 5% per annum.

Since we are talking pesos, a more realistic interest rate would be about 12%, in which case the 750,000 could get you about 8,200 per month for 20 years.
 
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jojo2130

New member
May 30, 2005
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The Jeepeta, With the Jeepeta he could start a tourist taxi business, without the payments he could generate enough cash within 3-4 years to build the house ! Build the house ready for a second level and in the declining years of the jeepeta he could sell the upper level of the house to a foreigner.......but build it himself or with a few close friends.
his wife would work and they would have enough money to eat and live comfortably for years to come.

Where is that entrepeneurial spirit ?

Stop trying to make money the easy way and the "Political correctness " i doesnt apply in DR like America
 
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laurapasinifan

Silver
Sep 19, 2005
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well I also think the payout would be 1.2 million pesos at the end of the 20 years.
selling the jeepeta even right away would probably yield a loss of some of its value...but i think it would be easier to sell the jep, than the house

secondly the house would be really really small for that price...or in a very bad area....

I am figureing that if you sold the jeep at 90% of its value and put the money in a a bank account that could earn only 7% you would have , $47,226 pesos thats 3,937 a month......and then at the end of it all you still have the 675K pesos in the bank!!!!!!!!!! so you would look at it as extra income.......plus this fixed savings for later.... and just call it that


DONT call it NOW cash..it was free..... dont turn it into something you NEED all of the sudden NOW

thats just my view

bob
 
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ricktoronto

Grande Pollo en Boca Chica
Jan 9, 2002
4,837
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samanasuenos said:
Rick, I must be losing it. I was thinking that the payouts would equal more like : 5,000 x 12 x 20 = 60,000 x 20 = 1,200,000. Am I wacked here?

1,200,000 would be more than 1 1/2 times the value of the house at 750,000.

HELP!!!!!!!!!
Click to expand...

Look up "present value" in Wikipedia or a basic business text. RD$1.2 million recieved over 20 years is not worth 1.2 Million now. It is worth what I said, at a 7% discount rate.

I will tell you what. You give me RD$1.2 million now. I promise to give you RD$5000 a month for 20 years. Equal value right?
 
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laurapasinifan

Silver
Sep 19, 2005
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ricktoronto said:
Look up "present value" in Wikipedia or a basic business text. RD$1.2 million recieved over 20 years is not worth 1.2 Million now. It is worth what I said, at a 7% discount rate.

I will tell you what. You give me RD$1.2 million now. I promise to give you RD$5000 a month for 20 years. Equal value right?
Click to expand...


but rick there is no offer of 1.2 now.....only that amount paid out over 20 years. but i looked up compound interest and if the 750K was invested at 7% and compounded only once a year it would be worth more than double the 1.2 mill...but of course that assumes none is taken out..... at all during the course of the 20 years....

bob
 
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HomeIsWhereMyHeartIs

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Jan 21, 2006
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They will take the jeep and sell it right away for as much cash as they can get. Face it... Option #2: The house is crappy, Option #3: Dominicans like Instant Gratification and who in this country can really say that in 20 years they will continue to pay.
 
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ricktoronto

Grande Pollo en Boca Chica
Jan 9, 2002
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laurapasinifan said:
but rick there is no offer of 1.2 now.....only that amount paid out over 20 years. but i looked up compound interest and if the 750K was invested at 7% and compounded only once a year it would be worth more than double the 1.2 mill...but of course that assumes none is taken out..... at all during the course of the 20 years....

bob
Click to expand...

You have to look at the present value of a series of cash flows not the future value of a lump sum untouched for 20 years. Of course it is larger, it is still untouched. Until you have a better understanding of finance you are arguing groundlessly.
 
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samanasuenos

Bronze
Oct 5, 2005
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Various barks and one Meeeeeeeeeeeeeeeow!

Thank you to all who have replied. Despite the fact that most of you dear readers indicated what YOUR choice would be.

Ricktoronto wins the Math Team Prize - free glasses for life, and a Slide Rule! Thanks, I see your point. Point taken. But do you wear a pocket protector? I find that awfully sexy in a man...

Bob: Thanks for stickin up for me. I am sure you are a very good bro to yoru sisters.

Ricardo: where in the J#D#R is your suggestion for prize #4?

Finally, should I add options to the original post, such as "Sell jeep and invest...." and so on? (I know, you just want it closed. Nahhh!)

And to the poster who compared Dominicans working hard for earning 8,000 RD/ month to Trailer Trash, please.

I know many very decent Dominicans who work for 2 and 3 and 4k RD per month - folks that you would never call Trash. So please rethink your quick trigger spillage. There! Meeeeeeeeeeeeeeeow!
 
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Ricardo900

Silver
Jul 12, 2004
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samanasuenos said:
Dear Ricardo, I apologize if any offense was taken, none was intended.
Click to expand...
No offense was taken.
I first consider choice #1, then I will be able "big-willie" in front of Patron Burger in Santiago on Saturday nights, until I am no longer to afford the maintenance, gas or insurance on that brand new jeepeta, since I am living on RD8,000 a month.

Then I will consider #2, a brand new house with no furniture and a mattress on the floor. I will enjoy the new house for three months, until government takes it away for failure to continously pay my property taxes, haha. Also, on month two I will lose my electricity and heat due to non-payment, its tough to stretch RD8,000 a month.

Then I will have to choose #3, but what fun is that. so #1 is the winner, until I am broke and forced to conjure up an insurance scam to dump the vehicle.

p.s. I never used the word "trash" just because a person lives in a trailer park does not mean that they are trash, sorry for the mix-up.
 
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samanasuenos

Bronze
Oct 5, 2005
657
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Gracias Ricardo! And thank you for your thought-out reply. Love it!

About #2, my impression is that property taxes do not have to be paid, really, until you want to sell it. Or rather someone has to pay them at thepoint of sale, like a summy expat buyer. Also, you have HEAT in the DR? Sweetie, I now that YOU are hot, but tell me that you meant to write "AIR" as in A/C. Not heat. Oy!

I like your choice. Live large. Plenty of non-Doms trying to do just that, in Vegas.

Que tengas un buen dia! - Sama
 
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dogstar

New member
Oct 24, 2004
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sorry I am late

but an interesting question. I ask my gril friend, after much thinking, she chose the house. Most houses in this town cost less then half that 750, so she woud be living large.
jjs
 
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Ricardo900

Silver
Jul 12, 2004
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samanasuenos said:
About #2, my impression is that property taxes do not have to be paid, really, until you want to sell it. Or rather someone has to pay them at thepoint of sale, like a summy expat buyer. Also, you have HEAT in the DR? Sweetie, I now that YOU are hot, but tell me that you meant to write "AIR" as in A/C. Not heat. Oy!
Click to expand...
ooops, I forgot a Dominican house not a New York house, no need for "Air" I'll leave the windows open, so that the mosquitos can keep me company. #2 it is! Now the only thing I need is 6 lucky numbers:classic:
 
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