I know this is lame...$266 Million Jackpot......
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Kestas
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To be fair, I know a number of people who responsibly buy only one lottery ticket daily. This is their entertainment. Like rjundi said, it lets their minds dream.
Patman
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The very first thing I would do if I won millions of dollars is to talk to a financial advisor and I would LISTEN to exactly what he had to say. 90% of the money that I won would be immediately invested properly so that I would end up just living off the interest and never touching the principal, so I definitely would not be one of those lottery winners that ends up flat broke 2 years down the road. I've been planning in my head what I would do with a big win ever since I was 16 years old, so I definitely would not be foolish with my money.
You have to chew into the principal...living on the interest only means a declining standard of living, as the buying potential of the interest (and the capital) declines.
Unless it's a ridiculous amount of money, you have to plan for a touch-down point somewhere.
Unless it's a ridiculous amount of money, you have to plan for a touch-down point somewhere.
Originally Posted By: Shannow
You have to chew into the principal...living on the interest only means a declining standard of living, as the buying potential of the interest (and the capital) declines.
Unless it's a ridiculous amount of money, you have to plan for a touch-down point somewhere.
That's where a single-pay annuity comes in. You'll get a guaranteed check for life based off of actuarial tables, principal and interest.
You have to chew into the principal...living on the interest only means a declining standard of living, as the buying potential of the interest (and the capital) declines.
Unless it's a ridiculous amount of money, you have to plan for a touch-down point somewhere.
That's where a single-pay annuity comes in. You'll get a guaranteed check for life based off of actuarial tables, principal and interest.
Kestas
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Aren't the large lottery winnings ($1M) paid out yearly over 20 years? I believe this is the case in Michigan. This way the State only needs roughly $500K in their interest-bearing accounts to pay off a winner. Conversely, the winner is only getting a winning of $500K in today's dollars.
In my state, Powerball and MegaMillions give an option for lump sum or annuity payments.
Yes, then unscrupulous companies like Wheredidmyworthwent, among many others, come along and doop the uninformed annuity holder into selling the annuity for a fraction of its value.
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Here you take the full sum over time (20+ years) or 1/2 that amount in a lump sum. They can't lose on the lottery itself. What they do with the proceeds is a variable. Here PA uses it to fund the PACE program (there may be others). If you meet income requirements it pays all but $5 or so of your prescription costs. It's somewhat contained by the income thresholds.
Originally Posted By: LS2JSTS
Yes, then unscrupulous companies like Wheredidmyworthwent, among many others, come along and doop the uninformed annuity holder into selling the annuity for a fraction of its value.
They are persuasive those unscrupulous companies.
Our state lottery made over $350M a year profit which went into consolidated revenue.
State Govt sold $350M a year revenue stream for three years worth of profit, now some private co is getting $350M forever.
Yes, then unscrupulous companies like Wheredidmyworthwent, among many others, come along and doop the uninformed annuity holder into selling the annuity for a fraction of its value.
They are persuasive those unscrupulous companies.
Our state lottery made over $350M a year profit which went into consolidated revenue.
State Govt sold $350M a year revenue stream for three years worth of profit, now some private co is getting $350M forever.
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Fire sale.
PowerBall pays out over 30 years.
MegaMillions pay out over 26 years.
I think that's the same for any state that's in those lotteries.
Take the cash and only get 55% of the jackpot-before taxes.
Seems most of those that are broke in 2-3 years are the 'cash' ones.
Smart money is taking the annuity unless you have one foot in the grave already.
MegaMillions pay out over 26 years.
I think that's the same for any state that's in those lotteries.
Take the cash and only get 55% of the jackpot-before taxes.
Seems most of those that are broke in 2-3 years are the 'cash' ones.
Smart money is taking the annuity unless you have one foot in the grave already.
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They probably extend the years as the collective trust fund gets "used". They need more time to spread the pay out over to get the use of the money. The concept is for it to be "free money" to the lottery. Now it appears to require up to 30 years to be truly liberated from encumbrances.
Engineering Economics teaches the time value of money. A 266M lottery paid out over 20 years is really only a 145M payoff (estimate, not calculated), less if the lottery stops paying upon the death of the recipient (which a lot of them do).
The smart thing to do would be to have a lawyer collect the lump sum, place it in a trust, and make sure the capital is both invested wisely, and not accessible unless there is a personal emergency. Live well on the proceeds, and don't tell anybody you won.
The smart thing to do would be to have a lawyer collect the lump sum, place it in a trust, and make sure the capital is both invested wisely, and not accessible unless there is a personal emergency. Live well on the proceeds, and don't tell anybody you won.
The payout period has been lengthened from 20 to 25(IIRC) to 30 as the interest rate dropped. (PowerBall)
As far as I know, the death of a winner doesn't stop to annuity pay out; it just transfers to his/her estate or beneficiary.
As far as I know, the death of a winner doesn't stop to annuity pay out; it just transfers to his/her estate or beneficiary.
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There are the payouts like a thousand dollars a week for life, which are guaranteed $1M in benefits. I assume that the estate of the winner continues to get the $1000/week until the $1M is reached.
The firm disappeared shortly into the 90's, but the promotion was "You can die rich". They even had a company logo that was, more or less, like this:
Essentially the deal was if you had a big enough estate (min was $3M) you could manage to pay some incredible rate for term insurance and your heirs would inherit millions more than you could have left them normally.
The firm disappeared shortly into the 90's, but the promotion was "You can die rich". They even had a company logo that was, more or less, like this:
Essentially the deal was if you had a big enough estate (min was $3M) you could manage to pay some incredible rate for term insurance and your heirs would inherit millions more than you could have left them normally.
Patman
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Originally Posted By: Shannow
You have to chew into the principal...living on the interest only means a declining standard of living, as the buying potential of the interest (and the capital) declines.
Unless it's a ridiculous amount of money, you have to plan for a touch-down point somewhere.
Not necessarily, as I've thought this out before: if I win $10 million, let's say I give 1 million to family and keep 1 million for myself to buy a new house, new cars, etc. Then I take the remaining $8 million and have it invested in mutual funds, and let's say it's earning me 5% a year on average. (I'm sure I would end up averaging closer to 8, but let's just say 5 to be safe) So that's now $400,000 a year I'm making on my investments. Even if half of that goes to taxes, I'm still taking in $200,000 every year, and I've got no debt at all. I think I could easily live a very luxurious life on that amount of money and would never dip into the principal.
You have to chew into the principal...living on the interest only means a declining standard of living, as the buying potential of the interest (and the capital) declines.
Unless it's a ridiculous amount of money, you have to plan for a touch-down point somewhere.
Not necessarily, as I've thought this out before: if I win $10 million, let's say I give 1 million to family and keep 1 million for myself to buy a new house, new cars, etc. Then I take the remaining $8 million and have it invested in mutual funds, and let's say it's earning me 5% a year on average. (I'm sure I would end up averaging closer to 8, but let's just say 5 to be safe) So that's now $400,000 a year I'm making on my investments. Even if half of that goes to taxes, I'm still taking in $200,000 every year, and I've got no debt at all. I think I could easily live a very luxurious life on that amount of money and would never dip into the principal.
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