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Lump Sum or payments?

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

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justxploring's avatar - villiarna
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Posted: February 10, 2008, 1:47 am - IP Logged

 I too would be wary of someone holding my money. You cant trust anyone with your money.

Yaddamean, so are you saying you would put it under your mattress?  If you can't trust the banks, the stock market or the government, then what would you do..buy tons of gold and hide it in your closet?  Lease a Brink's truck and hire a couple of armed guards? There is always some risk.   I'm just not sure what everyone is saying when they write stuff like this. There are so many scams going on today and nothing is a sure thing. But you still need to put it somewhere.  I am honestly not trying to be argumentative or sarcastic.  It's just that no matter what, someone will be holding your money.

    justxploring's avatar - villiarna
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    Posted: February 10, 2008, 1:52 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?

    But you are saying this person won that money years ago when a home cost much less.  So just one payment would have paid for a heck of a home in 1995 and now it would be worth over a million,  depending on where you live.  Why would someone win the lottery and wait 20 or 30 years to buy a house?  I don't understand what you are saying here. 

    Everyone always talks about the first thing they'd do, but nobody mentions getting a complete medical exam!  Before I made any decisions, I'd want to make sure I'm healthy.  Then I'd buy some long term care insurance. 

      Coin Toss's avatar - shape barbed.jpg
      Zeta Reticuli Star System
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      Posted: February 10, 2008, 2:03 am - IP Logged

      But you are saying this person won that money years ago when a home cost much less.  So just one payment would have paid for a heck of a home in 1995 and now it would be worth over a million,  depending on where you live.  Why would someone win the lottery and wait 20 or 30 years to buy a house?  I don't understand what you are saying here. 

      Everyone always talks about the first thing they'd do, but nobody mentions getting a complete medical exam!  Before I made any decisions, I'd want to make sure I'm healthy.  Then I'd buy some long term care insurance. 

      I'm saying that the annuity payment that seemed like a veritable fortune some years ago is just a run of the mill house now. 

      Think of it like that.

      Let's try it this way, say someone won a Reader's Digest sweepstakes or something and it was for $30,000 a year. Let''s say they won it in the 1970's when a new car was around $3,000 or less.

      At the time they won it, the $30,000 was a fortune....now it's a car.

      Just substitue lottey jackpot for RD sweepstakes, and house for car.  

      A lot of people here on LP probsbly don't realize that today's car payments used to be a mortgage payment.

      So I guess what I'm saying regarding jackpots and 20, 26, or 29 year annuities is what sounds like a virutal fortune today (or that first year) gets greatly diminished in buying power as each year's check comes. 

      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.

        sirbrad's avatar - Lottery-062.jpg
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        Posted: February 10, 2008, 2:14 am - IP Logged

        Umm yes I can say I would be highly responsible with even a $100 million. Maybe a lot of people do say they wish they had never won, but I can guarantee you that A LOT more who have won are glad they did, and we don't hear about their cases because the media is not interested in successful/positive stories. You don't know how much money I have, or how much I have won, so don't make assumptions.

        This topic has been done to death here in the past. Most annuities are a bad idea, especially those that do not raise with inflation. In fact they could put you WORSE off later than you are now. It is not the amount of money you have that measures responsibility, at least not in my case. I came from a very poor childhood, and I now manage money very well. The problem with most winners who blow it all is that they were irresponsible long before they won, at least in most cases I have seen.

        David Edwards proved his own quite correct, "Money doesn't buy intelligence." However in my particular case money could buy a lot more opportunities to garner more intelligence and provide a stepping stone to many more forms of happiness. Nothing is universal as Justxploring stated, and every individual has unique needs and desires. When I first found this site years ago I thought I liked annual payments too. But I learned a lot since then.

          justxploring's avatar - villiarna
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          Posted: February 10, 2008, 2:22 am - IP Logged

          All I was responding to originally was the statement made that someone older would take the lump sum as opposed to someone younger.  The opposite is usually true.  Someone 25 can invest the money and take risks and will have plenty of time to make up any losses.  Someone 60 who takes a hit is affected much more dramatically.  Most people when they retire are looking for a flow of income since they own their homes and no longer have young children, college tuition to pay off, etc.  SirBrad is right when he wrote that the percentage you get is very low and you can do much better but, depending on your age, you might never get back the 50% you lose when you choose the lump sum.  Many people invest in 30 year bonds that only earn about 4% and Munis that get even less.  I guess the bottom line is how much a person wants to make and the risk he/she is willing to take to do it. 

            lottocalgal's avatar - Lottery-043.jpg
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            Posted: February 10, 2008, 9:35 am - IP Logged

            This is in response to Sirbrad.

            I am the same way,  I grew up with nothing and having to struggle for everything I have now. I know how to appreciate the next dollar. I also can take 100 million or even 1 million and use it wisely.  I am from the old school where it can be gone tomorrow so you plan for the "just in case".  The things that I would buy are just better version of things I want right now,  things I COULD buy, but be in serious debt if I did.  The things Edwards and others purchased were nowhere near necessities of life or even strong WANTS, that nut went crazy  with the Laborginis and the Spiders and the $85k lamps.  Another guy bought 35 cars for "friends."  To me, these people and others like  them weren't exactly responsible anyway. I'd take that LUMP sum and invest it in slow but strong stocks.  It WILL last me till the end-And I can't take the chance on  annuities, because you never know what can happen tomorrow.  Give it to me now,  let ME decide the road i will take with it.

            GOD PLEASE LET ME PROOVE TO YOU THAT WINNING THE LOTTERY WON'T SPOIL ME.

              LuckyLilly's avatar - savy chick.png

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              Posted: February 10, 2008, 2:12 pm - IP Logged

              SirBrad Says: Umm yes I can say I would be highly responsible with even a $100 million. Maybe a lot of people do say they wish they had never won, but I can guarantee you that A LOT more who have won are glad they did, and we don't hear about their cases because the media is not interested in successful/positive stories. You don't know how much money I have, or how much I have won, so don't make assumptions.

              I concur 100%.  I know exactly how I'd handle a huge amount of money, and nobody can tell me that I can't be sure until I've been through it.  I know me.  I know how I think.  I know what I want.  I know how to live within my means.  I know how to curb my impulses.  Therefore, I know with absolute certainty that I would not blow a jackpot.

              Maybe I'm weird or obsessive, but before each drawing I go to the USAMega page and see how much I'd have after taxes.  (I subtract the additional 10% that the IRS would want over and above what the lottery commission would take out.)  And then I do a quick calculation.   $$ to be invested, $$ to give to charity, $$ to spend which would have to last the first year at which time I would live off income from the invested money.

              Of the money I have allotted to spend, I know exactly how much I can spend on a house, car, etc., and I know that amount will vary depending on how high the JP is when I win.  And I'm fine with that.  I know I'll be able to afford much less if I win when the Powerball is only 15 mil, and I've come to terms with that.  I would never ever blow a jackpot.

                sirbrad's avatar - Lottery-062.jpg
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                Posted: February 11, 2008, 1:51 am - IP Logged

                This is in response to Sirbrad.

                I am the same way,  I grew up with nothing and having to struggle for everything I have now. I know how to appreciate the next dollar. I also can take 100 million or even 1 million and use it wisely.  I am from the old school where it can be gone tomorrow so you plan for the "just in case".  The things that I would buy are just better version of things I want right now,  things I COULD buy, but be in serious debt if I did.  The things Edwards and others purchased were nowhere near necessities of life or even strong WANTS, that nut went crazy  with the Laborginis and the Spiders and the $85k lamps.  Another guy bought 35 cars for "friends."  To me, these people and others like  them weren't exactly responsible anyway. I'd take that LUMP sum and invest it in slow but strong stocks.  It WILL last me till the end-And I can't take the chance on  annuities, because you never know what can happen tomorrow.  Give it to me now,  let ME decide the road i will take with it.

                GOD PLEASE LET ME PROOVE TO YOU THAT WINNING THE LOTTERY WON'T SPOIL ME.

                Exactly. David Edwards just blew it on crap. I would not even buy more than three cars TOPS, probably only two. I don't need a lot to be happy, just the security to know that I will not be without money ever again. All I would have to do is invest in a 60 month CD at 5.5%, and I would be sitting pretty for a long time, then renew as needed. Now annuity payments on say $200 million might be worth it if I had no choice, but still would never compare to the interest rates of the lump sum.

                About the only advantage I can see with an annuity, and a really high paying annuity that is, is if you do not have anyone or want anyone to claim your fortune in the end. Or if you do not want that much money, and you just want to spend the principal for what you need. You can make mistakes, but a you would still have to wait a year or so for you next check, which may make things worse if you needed public assistance. So irresponsibility could actually hurt you a lot more with an annuity.

                  sirbrad's avatar - Lottery-062.jpg
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                  Posted: February 11, 2008, 1:55 am - IP Logged

                  SirBrad Says: Umm yes I can say I would be highly responsible with even a $100 million. Maybe a lot of people do say they wish they had never won, but I can guarantee you that A LOT more who have won are glad they did, and we don't hear about their cases because the media is not interested in successful/positive stories. You don't know how much money I have, or how much I have won, so don't make assumptions.

                  I concur 100%.  I know exactly how I'd handle a huge amount of money, and nobody can tell me that I can't be sure until I've been through it.  I know me.  I know how I think.  I know what I want.  I know how to live within my means.  I know how to curb my impulses.  Therefore, I know with absolute certainty that I would not blow a jackpot.

                  Maybe I'm weird or obsessive, but before each drawing I go to the USAMega page and see how much I'd have after taxes.  (I subtract the additional 10% that the IRS would want over and above what the lottery commission would take out.)  And then I do a quick calculation.   $$ to be invested, $$ to give to charity, $$ to spend which would have to last the first year at which time I would live off income from the invested money.

                  Of the money I have allotted to spend, I know exactly how much I can spend on a house, car, etc., and I know that amount will vary depending on how high the JP is when I win.  And I'm fine with that.  I know I'll be able to afford much less if I win when the Powerball is only 15 mil, and I've come to terms with that.  I would never ever blow a jackpot.

                  Not to mention the fact that most lottery winners have not structured and planned their lives around a potential lottery win, I have for the last 5 years. To most it is a complete surprise, and they are ill-equipped to handle such a situation because they never gave it any prior thought. I know everything I am going to do all the way down to the clothes I will wear, the words I will say at the press conference, and how I will handle the claim and who I will call for help.

                  Most never prepare for the big win because most never actually truly believe they will win. Which kind of contradicts the whole law of attraction thing, but then again people can still get lucky.

                    OldSchoolPa's avatar - Lottery-057.jpg
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                    Posted: February 11, 2008, 5:49 am - IP Logged

                    I would only take the lump sum because I am a level headed person.  I don't think it makes much difference whether a person takes the lump sum or the annual payments if they are irresponsible or have any kind of destructive habit...the money is still going to be blown.  Taking the annual payments would just mean those people would respond to those JG Wentworth commercials to get their hands on the rest of their lottery winnings sooner.  So let's put this to bed...if a person is irresponsible, it makes no difference how the winnings are paid out as they will eventually be blown.  If a person is responsible, the only sound option is to take the lump sum.  And I don't want to hear anything about it all depends on the person and the circumstances or any mumbo jumbo about taxes...either you pay the taxes now or you'll pay the taxes later...it makes no difference!

                    Get MONEY!!! Winning a JACKPOT lottery is all the HOPE and CHANGE I desire!!!  NOW give me MONEY!US Flag

                    The guy who won the presidency in 2008 really won the lottery...he is now millions richer, travels in first class style, and even has a staff that would be the envy of the richest Powerball winner (she has a staff of 2). Every night he goes to sleep, he probably plays the close of Dave Chappelle's Show: I'm rich beyatch!


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                      Posted: February 11, 2008, 8:28 am - IP Logged

                      This subject has been discussed here on about 27 other occasions.

                      Crazy

                        ThatScaryChick's avatar - x1MqPuM
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                        Posted: February 11, 2008, 10:53 am - IP Logged

                        This subject has been discussed here on about 27 other occasions.

                        Crazy

                        True, but those threads are closed right? How are people who are new, suppose to discuss those topics? I notice that lots of threads are repeats, but then you can only talk about so many things that have to do with the lottery before something is repeated.

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


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                          Posted: February 11, 2008, 11:28 am - IP Logged

                          True, but those threads are closed right? How are people who are new, suppose to discuss those topics? I notice that lots of threads are repeats, but then you can only talk about so many things that have to do with the lottery before something is repeated.

                          There's a nifty feature called search. And if they look through them, there's a pretty good chance they'll find just about every aspect of the subject covered.

                          10 time over, and more to boot.

                          Just my opinion, nothing more.

                            ThatScaryChick's avatar - x1MqPuM
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                            Posted: February 11, 2008, 12:06 pm - IP Logged

                            There's a nifty feature called search. And if they look through them, there's a pretty good chance they'll find just about every aspect of the subject covered.

                            10 time over, and more to boot.

                            Just my opinion, nothing more.

                            A nifty search button. Really! Oogle

                             

                            I know there is a search button. Re-read my post. I said: "There are new people who may want to discuss topics, but can't because they are closed." So by your post above, they can search for the topic which is true, but what if it is closed? Can they not start a new one to discuss it? The search feature has nothing do with a topic that has been closed. Understand what I am getting at? I am sure that you have created a topic or two that has been done in the past and so have many other people.

                                   

                            JMO. 

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

                              MissNYC's avatar - diva
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                              Posted: February 11, 2008, 1:08 pm - IP Logged

                              I'll definately take the lump sum and try to get all the financial advise I can from various sources to decide where to put it all, because I definately won't put it all in one place. With 100 mil after taxes, off-hand, I'd say it's a good idea to award yourself about 10 million to spend, and invest the rest at first. Hopefully the 10 mil would last, if it doesn't, hopefully you're smart enough to realize how lucky you are that you didn't award yourself the full amount to spend and slow down. Personally, I will like to change my life. I too am in my late 20s, so I'll by a nice home and 1 or 2 condos, and a few nice cars, no Bentley's or anything, but a Mercedes or two. People who win very large lotto jackpots, like 200 mil plus, and get up and say their lives won't change just piss me off...then why play? Isn't the point to live your financial dreams? If your happy with your life financially, perhaps the only change you should make is to stop wasting money on lotto tickets.

                              "If you just keep believing, that dream that you wish will come true"

                              Bed