A) Invest $2 million in stock and bond market. Probably 60% stocks, 40% bonds. Diversified portfolio. Assume an annual return of 4.5-6.5% on average. Most of the money would be in 401k or Roth IRA.
B) Purchase 10 rental homes in Utah/Arizona worth $2 million total. Average home price would be $200,000. I'm not familiar with rent rates in Utah/Arizona so don't know how much they'd rent for. Assume you hire property management at 10% of monthly rental value.
Obviously there are a lot of assumptions to take into account here but, in general, which investment option do you think would make more money? This would take into account taxes as well.
I haven't done any calculations, but my guess is I would prefer Option A because 1) it makes just as much or more money, 2) it's easier to manage, and 3) it's more broadly diversified and therefore less risky. I'm interested to hear other people's thoughts and feel free to throw out some estimates on total return over the time period.