Welcome Guest
Log In | Register )
You last visited December 8, 2016, 6:54 pm
All times shown are
Eastern Time (GMT-5:00)

Lump Sum or payments?

Topic closed. 67 replies. Last post 9 years ago by mylollipop.

Page 1 of 5
PrintE-mailLink
Avatar
New Member

United States
Member #58287
February 8, 2008
24 Posts
Offline
Posted: February 9, 2008, 11:55 pm - IP Logged

For me, I would take payments. 

 

Only way I would take lump sum  is if it was less then 20 million.

 

I'm fairly young (late 20's) and payments I think would be best for me. It would prevent me to somehow, blow all that money. I dont think I could trust myself having 100m+ thrown my way. I see it as a type of protection for myself. Receiving a yearly salary from the lottery of 5mill+ would be niceee...

 

If I was a lot older, (40+) I would definitely take lump sum. 

 

how would you guys take it?

    sirbrad's avatar - Lottery-062.jpg
    PA
    United States
    Member #22983
    October 6, 2005
    2226 Posts
    Offline
    Posted: February 10, 2008, 12:18 am - IP Logged

    Taking payments is pretty stupid, even at a young age. Mostly because you can earn far more money in compound interest than you will ever get in annuity principal. Now if you think you are irresponsible and will blow it all, that is your problem. I would take cash all the way down to $1.5 million which is still good for $75,000 a year minimum! That means if I never touched it, and spent all the interest, which would never happen, and only further compound.

      justxploring's avatar - villiarna
      Wandering Aimlessly
      United States
      Member #25360
      November 5, 2005
      4461 Posts
      Offline
      Posted: February 10, 2008, 12:21 am - IP Logged

       "If I was a lot older, (40+) I would definitely take lump sum. " 

       

      So does this mean that someone 40+ is probably not going to last another 29 years? Blue Thinking

        Avatar
        New Member

        United States
        Member #58287
        February 8, 2008
        24 Posts
        Offline
        Posted: February 10, 2008, 12:26 am - IP Logged

         "If I was a lot older, (40+) I would definitely take lump sum. " 

         

        So does this mean that someone 40+ is probably not going to last another 29 years? Blue Thinking

        not neccesarily... but you never know what could happen.

        at that age, I would want to get all the money I could get my hands on. Use it for investments, retirement, and such.  

          justxploring's avatar - villiarna
          Wandering Aimlessly
          United States
          Member #25360
          November 5, 2005
          4461 Posts
          Offline
          Posted: February 10, 2008, 12:28 am - IP Logged

          What you just wrote makes no sense at all to me.  If you won the lottery at 25 you should do the same thing!  Otherwise you won't have the money to "use for investments, retirement, and such."

           

          By the way, I disagree that taking annual payments is a bad idea, so on that issue we agree.  I'm not saying I would do that, just that everyone knows his or her personal lifestyle and what's best to be careful.

            Avatar
            New Member

            United States
            Member #58287
            February 8, 2008
            24 Posts
            Offline
            Posted: February 10, 2008, 12:32 am - IP Logged

            Taking payments is pretty stupid, even at a young age. Mostly because you can earn far more money in compound interest than you will ever get in annuity principal. Now if you think you are irresponsible and will blow it all, that is your problem. I would take cash all the way down to $1.5 million which is still good for $75,000 a year minimum! That means if I never touched it, and spent all the interest, which would never happen, and only further compound.

            good viewpoint.

            but you cant really say that you wouldn't be irresponsible or be responsible with that kind money because you havent experienced it yet first hand. Many people who've won jackpots say they wish they never won. 

            So you cant really for sure say, I will be responsible with that money. Until you have that 100mill in the bank, noone can say, even yourself, how you would handle it. 

              Avatar
              New Member

              United States
              Member #58287
              February 8, 2008
              24 Posts
              Offline
              Posted: February 10, 2008, 12:34 am - IP Logged

              What you just wrote makes no sense at all to me.  If you won the lottery at 25 you should do the same thing!  Otherwise you won't have the money to "use for investments, retirement, and such."

               

              By the way, I disagree that taking annual payments is a bad idea, so on that issue we agree.  I'm not saying I would do that, just that everyone knows his or her personal lifestyle and what's best to be careful.

              I probably contradicted myself there, but I still would take payments. 

               

               

               

              Noone knows, not even yourself, know exactly how you would react towards a huge lump sum. Most people go crazy.

               

              All the stories of people going from ragz to riches, they all have one common thing, they SPEND like crazy and dont think of the future. They spend money like its infinite and buy fancy cars, multiple houses, business ventures which they have no idea of, yachts, and throw money around like its nothing. A person who makes 20k per year that wins 100mill, they will say I will do this and that and not be stupid. I will bet my house that 9 out of 10 of those will not follow what they said and go crazy spending money left and right.

                justxploring's avatar - villiarna
                Wandering Aimlessly
                United States
                Member #25360
                November 5, 2005
                4461 Posts
                Offline
                Posted: February 10, 2008, 12:45 am - IP Logged

                You aren't reading what I wrote. I didn't say that taking annual payments makes no sense.  I was referring to when you wrote that you would take them at 20, but not at 40.  Planning for the future should start as early as possible. Anyway,  40 is far from old. Just ask our members here who are 70.  A 71 year old is running for President.   In Ethiopia, where the average person doesn't even get to see his 18th birthday because of hunger, dirty water or disease, 40 is very old, but not in the United States.

                  Avatar
                  New Member

                  United States
                  Member #58287
                  February 8, 2008
                  24 Posts
                  Offline
                  Posted: February 10, 2008, 12:51 am - IP Logged

                  Your right 40 is not old at all. In the U.S, at 40, its a safe bet to say your only half way through your life.

                  I made mistake of choosing 40years old, I should have said something around 55-60, a retirement age.   

                    Coin Toss's avatar - shape barbed.jpg
                    Zeta Reticuli Star System
                    United States
                    Member #30470
                    January 17, 2006
                    10353 Posts
                    Offline
                    Posted: February 10, 2008, 1:08 am - IP Logged

                    Yaddamean

                    We've had many discussions about this topic, but one thing no one has ever mentioned is for people who take annual payments (annuity) there are companies out there that are very, very aggressive and try to talk people into a lump sum from themselves- for a lot less than they'd get keeping the payment.

                    Someone hits a jackpot, opts for an annuity, one of these companies comes along and says, "We'll pay you NOW".....so they turn over their annuity, get musch less for it than they would have had they taken lump sum from the lottery, they blos that, and now the financial compnay has the annuity. Worst case scenario but it happens.  

                    Also, let's just say that someone won a lottery way back when, the total prize was around $6,000,000 and their annual payments came out to around $230,000, before taxes. What seemed a fortune then wouldn't even buy a house in many parts of the country now. We all have to consider such things.

                    Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                    Lep

                    There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

                      ThatScaryChick's avatar - x1MqPuM
                      Idaho
                      United States
                      Member #56506
                      November 21, 2007
                      6537 Posts
                      Offline
                      Posted: February 10, 2008, 1:17 am - IP Logged

                      I would take lump sum.

                      "No one remembers the person who almost climbed the mountain, only the person who eventually gets to the top."

                        lottocalgal's avatar - Lottery-043.jpg
                        CA
                        United States
                        Member #57222
                        December 23, 2007
                        587 Posts
                        Offline
                        Posted: February 10, 2008, 1:27 am - IP Logged

                        Yadda,

                        I would take the lump sum for one reason.  I don't trust the government 10 or 20 years down the road.  I always wondered what would happen or even IF, our separate states could suddenly declare that  " due to the recent decline in the state budgets,  payoffs for the current annuities have been suspended until further notice.  We are aware of the payments due and after  continued research... blah blah blah...."  I know that is paranoid but our governement pulls so much stuff like that-I wouldnt take the chance with my money 10-20 yrs down the road.  It has nothing to do with  my spending habits, just fear of what might be.  Its okay to respond and tell me im tripping.  But i notice that everyone takes the lump sum-my assumption has always been that  mistrust is their reason as well.

                          justxploring's avatar - villiarna
                          Wandering Aimlessly
                          United States
                          Member #25360
                          November 5, 2005
                          4461 Posts
                          Offline
                          Posted: February 10, 2008, 1:27 am - IP Logged

                          Coin Toss, are you saying that someone making $230,000 a year wouldn't be able to purchase a nice house?   If someone won $6 million 20 years ago and took annual payments, he could easily invest 1/2 of the money and live off of the rest.   For some reason, people keep thinking that everyone who takes an annual payment is spending it all and not investing most of it.  Let's say you won $24 million (the current FL jackpot) and took payment for 30 years. Sure, you could invest it and double or triple whatever you make in a short time.  However, if you want to reduce your overall risk, you can always take whatever you need to enjoy your life and put the rest in stocks, bonds, precious metals, real estate, a business or whatever else you choose. Yaddamean is only in his 20s.  He could easily take just 1/4 of his $800,000 annual check and live well and invest the rest.  Then if everything gets more expensive over time, he will be able to use the interest from his investments or just pay himself more every year out of his prize. 

                            Avatar
                            New Member

                            United States
                            Member #58287
                            February 8, 2008
                            24 Posts
                            Offline
                            Posted: February 10, 2008, 1:32 am - IP Logged

                            lottocalgal

                            very interesting perspective on your part that I've never thought of. Although most will see it as being paranoid, I respect your viewpoint. Looking at it that way, I too would be wary of someone holding my money. You cant trust anyone with your money.

                              Coin Toss's avatar - shape barbed.jpg
                              Zeta Reticuli Star System
                              United States
                              Member #30470
                              January 17, 2006
                              10353 Posts
                              Offline
                              Posted: February 10, 2008, 1:39 am - IP Logged

                              Justxploring

                               

                              I'm figuring that anyone who won a jackpot would pay cash for a house - instead of taking on amortgage and paying for it three times over - you know, the "heat, eat, and taxes" approach - the house (and everything else) is paid for and the only bills are groceries, utilities, and property taxes.

                               

                              So, if someone had won a lotto years ago, and was getting annual payments in the $200,000 to $300,000 range, and was going to pay cash for a house, there goes that year's annuity check, no?

                              Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                              Lep

                              There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.