Lump sum?

[Dale]

Ok, so it turns out that I won that big lottery jackpot. So, here's my question. Given that I'm soon 50 years old, should I take the yearly deposits over 30 years or the lump sum? I can take the money in a lump sum or in installments over 30 years. The cash option is $177.3 million, or $124.1 million after taxes. On the installment plan, the first payment would be about $6.5 million after taxes.

That's the hassle about winning these things. You have to make all of these annoying decisions.

Any advice would be appreciated.


Dale

[Jack]

Congratulations!!

I would take the installment plan and donate all of it to charity as you get it...

[emmline]

Installment, because it would freak the teller out if you took that lump to the bank.

[Congratulations]

I would do installments or else I'd spend it all in one go.

[gonzo914]

Lump sum. Otherwise you run the risk of there being some left over when you shuffle off this mortal coil.

[Wanderer]

I would say lump sum.

Usually, the yearly deposits are generated by the lottery folks buying an annuity. Given a good money manager, you should be able to do much better the interest an annuity generates (ie: you should be able to make more than 6.5 mil a year from wise investing). You might want to tie the money up in some kind of corporation or other entity that will live on after you. You'll then have some kind of investment vehicle that you can pass on to your kids.

I'd say only take the yearly plan if you're afraid you can't manage your money and think you will lose it all shortly after getting it.

I'd say that if you really won the lottery (and I'm assuming that you are just having fun and didn't actually win), your best bet is talking to someone who handles large money for a living, and not us

[Flyingcursor]

Edited because Wanderer answered more succinctly and I hadn't read the post.

[dubhlinn]

Take the money and RUN.....


Slan,
D.

[Cynth]

You would get a payment every year of 6.5 million after taxes for 30 years? That totals around 60 million more than 124 million. Can that be right? That is half again as much.

I would go with the installments. What could you possibly need more than 6.5 million dollars a year for? If you wanted to start a foundation or something, I guess you might want more, but it would be a shame to lose 60 million dollars that the foundation could have. I think it would be better to start the foundation small and add to it each year. You can take on larger projects or more of them as you learn how to manage the foundation.

If you are just going to throw wild parties with the money, then I think you should take the lump sum because the government needs the taxes.

Oh, I guess I don't have any idea how much interest you would be getting on the 124 million and then what the taxes on that would be. Duh. You need a financial advisor, dude. I would take the way that I ended up with the most money after taxes.

[Sliabh Luachra]

I'd say that if you really won the lottery (and I'm assuming that you are just having fun and didn't actually win), your best bet is talking to someone who handles large money for a living, and not us

I must disagree. I would be more than happy to help dispose of either a lump sum or the smaller payments.

Mark

[Cynth]

I would do installments or else I'd spend it all in one go.

But what could you buy that costs that much? Some beautiful house on the Riviera couldn't cost that much, could it?

[Jack]

I would do installments or else I'd spend it all in one go.

But what could you buy that costs that much? Some beautiful house on the Riviera couldn't cost that much, could it?

Spending money does not have to mean buying things. You can spend money on helping hungry children in China eat and HIV/AIDS patients in South Africa get the basic medical care they need.

[carrie]

That's the hassle about winning these things. You have to make all of these annoying decisions.

You're quite right, Dale...it's way more hassle than you should have to deal with. You need someone to just do the worrying for you. I'm happy to say that my experience as writer and editor of textbooks has prepared me pretty well for these kinds of things (I can't tell you how many times I've dealt with capital related issues, to say nothing of "high interest" considerations), so--as a gesture of appreciation for the board you have so generously provided us over the years--let me handle it for you. No, really--I'd be happy to. Just have to put in a call to Pat Olwell and then I'm available to start immediately--it's that kind of community you have created.

Carol

[Congratulations]

I would do installments or else I'd spend it all in one go.

But what could you buy that costs that much? Some beautiful house on the Riviera couldn't cost that much, could it?

Spending money does not have to mean buying things. You can spend money on helping hungry children in China eat and HIV/AIDS patients in South Africa get the basic medical care they need.

Actually, I was thinking flutes.

LOTS of flutes...

[Wombat]

I'd go for the lump sum I think. Six million sounds a lot but after you've bought yourself a few senators and a few small countries you mightn't have much left to live on before the next installment. That said, I guess you wouldn't have much problem getting a loan.