Your boss offers you the same dollar amount as either a permanent raise or a one-time bonus. Which do you pick? Drag the sliders and watch the gap explode.
| Year | Raise value | Bonus value | Gap |
|---|
A raise is permanent. Every year for the rest of your career, you earn that extra amount. If you invest the difference each year, it compounds like an annuity:
A bonus is one-time. You get it once. Even if you invest the whole thing, it only grows as a single lump sum:
The raise wins because you get fresh capital injected every single year. Each injection then compounds for the remaining years. The bonus only has one injection that compounds. Over long careers, this difference becomes enormous.
This calculator assumes you invest the full raise/bonus amount. In practice, taxes reduce the invested amount, but the relative multiplier stays similar. Not financial advice.