6/5/2009 11:30:38 PM
why do people take the lump sums? it's like they are begging to splurge all their money on dumb investments and frivolous things. spread that shit out over thirty years and live WELL (and get more of your money).
6/5/2009 11:33:30 PM
http://www.thewolfweb.com/message_topic.aspx?topic=568039
6/5/2009 11:36:00 PM
yeah, but I made this one, who the hell is Scuba Steve?
6/5/2009 11:36:55 PM
Scuba Sam's son?
6/5/2009 11:44:41 PM
^^^^ um, no. you almost always take the lump sum. even just putting it in a bank and collecting standard savings interest % he'd be getting around 1.5 million a year in perpetuity w/o ever touching the principal. taking the annuity is just dumb.[Edited on June 5, 2009 at 11:47 PM. Reason : .]
6/5/2009 11:46:48 PM
i'm curious about the math on this one.say he did a 30 year payout. doing a little quick math, that would be 644,000 per month for thirty years.
6/5/2009 11:58:42 PM
lump sum is the best option always.
6/6/2009 12:21:21 AM
i don't know. you get significantly less money with the lump sum. is it significant enough to negate the amount you might make on that money from interest/investments?
6/6/2009 12:27:25 AM
yeah, probably so most of the time.Gotta consider that future value/opportunity cost.
6/6/2009 12:35:59 AM
lock this duplicate shit
6/6/2009 12:36:55 AM
^^ yes, even with safe investments you can make a lot more that you would through an annuity. yeah, you get more for 30 years per annum but in that same time frame even with a simple savings account if you spend 500,000 a year and put away around 500,000 (after taxes from your interest earned at approx 2% of 80 mil) you'll have 95 million in cash sitting in a bank account and that's not accounting for the fact that your interest will pay more each year as your account grows so probably a little over 100million.
6/6/2009 12:48:27 AM
use present value to compare the two cash flow streamsthey ahve a lottery example, too:http://tkcs-collins.com/truman/cashflow/cashflow.shtml[Edited on June 6, 2009 at 12:51 AM. Reason : .]
6/6/2009 12:50:04 AM
^^ yes, compound interest rules.
6/6/2009 12:50:57 AM
6/6/2009 1:01:00 AM
6/6/2009 1:03:56 AM
It's probably better for most lotto winners (that is, the people who invest significant amounts of their income into lotto tickets) to take the annuity.Who knows what kind of retarded stuff they buy, but I've heard a lot of lotto winners are broke again within like 10 years.
6/6/2009 1:05:12 AM
I sincerely hope that this doesn't ruin their lives.
6/6/2009 1:06:06 AM
technically really shrewd investors would say take the lump sum prolly
6/6/2009 1:06:47 AM
6/6/2009 1:09:09 AM
^^ yeah, but all I'm saying is people who invest in the lottery aren't normally shrewd investors.Lump sum doesn't seem like that much less money. Tax on lotto winnings is like 50%, total jackpot was 232 million, so annuity payouts would probably total like 115 million, and he gets almost 90 million in a lump sum.Taking inflation into account, that's really not all that much less.[Edited on June 6, 2009 at 1:09 AM. Reason : ]
6/6/2009 1:09:45 AM
Yes, taking the lump sum is the correct course. Even very average investing will outpace inflation. Money now is always worth more than money later for several reasons, most of which have already been mentioned.
6/6/2009 1:11:14 AM
i would rather take the annuity just because i know how i spend money...i'd blow that lump some on a lot of cool shit or take some risky investments or something, it's not something i'm proud of. I'd rather have the security of knowing i'll be getting a nice paycheck for 30 years no matter what happens. then i can save and invest as i please
6/6/2009 2:45:34 AM
do you realize how much 88.5 million is??? they had a special on a guy who won $40 million, his interest alone was $10,000 a day. Unless you buy a sports team or something crazy there is no way you could run through that
6/6/2009 2:48:51 AM
3.6 million a year? who gets that kind of interest in a usable account?
6/6/2009 2:52:59 AM
no idea what he had set up and where, but thats what it came out to
6/6/2009 2:58:04 AM
I can believe somebody was making 10k a day in interest if he had 40 million. I'm sure it would be pretty difficult to find a 9% money market account or the like, but I bet you can easily manage 12% on the 30-35 million you invest and keep the other 5 million liquid in a combination of money market, savings, and checking (not that I would ever do that if I won the lottery, having that much in uninvested liquid seems crazy to me).Even if this rancher put all 88.5 million of it into CDs at 5% he would be making over 4 million a year in interest alone. Like someone said before, unless you had absolutely no sense at all and just decided to buy a ferrari for every day of the year it would be damned near impossible to go broke once you have that kind of money.
6/6/2009 3:02:00 AM
If he was making 9% interest on it, he probably lost most of that money last fall.
6/6/2009 7:36:03 AM
Correct me if I am wrong, but isn't the lump sum payout in a lottery prize the amount that the lottery would use to purchase the yearly payout annuity? Why wouldn't you take the lump sum? Unless you are so retarded with money that you simply can not trust yourself you would be better off.Plus with the annuity prize, you are getting escalating payments. So for that last jackpot, the annuity was only paying like 1.8M per year. You didn't get above 2M until year 5 and so on until you were getting around 8M per year in the final years.
6/6/2009 7:50:01 AM
^ that's probably because they're accounting for inflation
6/6/2009 8:39:23 AM
Not sure if it is true or not, but someone also told me that the annuity cannot be devised, inherited, or transferred. If you happen to die before the 30 years is up, the money escheats to the state.
6/6/2009 9:00:23 AM
dangit. i need that money.
6/6/2009 9:09:21 AM
6/6/2009 9:35:33 AM
6/6/2009 10:11:44 AM
6/6/2009 11:37:38 AM
whenever there's a lottery thread I post thisrotten.com Lottery Winners & Tips for the Latest Instant Millionairehttp://www.rotten.com/library/culture/lottery-winners/
6/6/2009 11:54:58 AM
6/6/2009 12:10:27 PM
wait, what makes this guy a goofball?
6/6/2009 12:16:56 PM
I, too, was wondering "wait, what makes this guy a goofball?". I figure because he has a neighbor named Dave Assman, since only goofballs have neighbors with weird last names.
6/6/2009 2:53:13 PM
6/6/2009 3:05:44 PM
Rumor is Fox is already in talks for a reality show....possible show name "Millionaire Cowboy Lookin For Love"......instead of giving out a rose it will be cowgirl hat.....[Edited on June 6, 2009 at 3:12 PM. Reason : w]
6/6/2009 3:09:09 PM
if you just made that up, good job. because that totally sounds like something i'd buy
6/6/2009 3:14:37 PM
this guy has a lot of trouble coming his way
6/6/2009 3:20:06 PM
6/6/2009 3:26:30 PM
nah, he got 99 problems but a bitch ain't one
6/6/2009 3:55:33 PM
6/6/2009 4:01:28 PM