I think if I won, and took the cash my formula would be something like:
10% Spend on One-Time gifts to family and friends (I cannot emphasize one-time enough)
3% Spend in first year on self
3% in self-controlled portfolio so I can have some fun investing without a large risk.
3% in Gold stored abroad
11% in Cash in Euros stored abroad
6% in Cash in GBP stored abroad
4% in Cash in USD stored in the USA for a rainy day
20% Long Term Bond Funds (Spread across 4 major investment firms)
20% Long Term Multinational Funds (Spread across 4 major investment firms)
20% Mid Term Balanced Equity Funds (Spread across 4 major investment firms)
Live off of 40% of investment return per annum. Reinvest 50% per annum split between funds. Save 10% per annum into other currencies.
Self Controlled port and Cash in USD can be used at anytime for anything at my disgression.
Funds would never be touched and be allowed to grow and grow to provide a nice estate upon my death.
Cash in foreign currencies would be saved for an emergency.
My concern with taking the cash is that it makes you a much larger target, than if you "only" have a couple million a year coming in from an annuity. Plus, it would be a lot less stress in first few years to find investments and to protect your money. Additionally, since I am only 25 years old, so I am rather likely to live thru the duration of the annuity. If I took the annuity, my investment plan would be similar to the above, but I would do very little investing for the first 3 years while I got thru the major purchases, and family gifts.
My concern with taking the annuity is that the dollar is not that hot right now, and you could probably beat the annuity, simply by putting a fair share of your money in other currencies until the dollar stabilizes, and if our dollar did not stabilze, you could always move to another country with the money you have saved in their currency.