NY United States
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October 16, 2005
4,772 Posts
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Quote: Originally posted by Coin Toss on Feb 12, 2008
Ky Floyd
You're still paying for the house three times.
Total payments of $540,000 on a house you buy for how much?
Don't forget there was a time when interest on car payments, loans, and credit cards was deductible, and there have already been attmpts at making mortgage interest non-deductible.
Unlikely to happen, but what if it did?
How would I be paying for the house 3 times?
Whether you pay cash or take a mortgage, the actual cost of the house is the difference between what you have after the house is paid for and what you could have had if you hadn't bought the house. If you have 250k in an investment account and you take it out to pay cash, in 30 years you'll have the house, and nothing at all in that account. That makes the total cost of the house a hair over $700K. If you keep the house for another 10 years, that account with nothing in it will grow to the same nothing it is after 30 years, while the $700k would grow to $987k. The house you paid cash for, in order to save 290k in interesthas now cost you 4 times the purchase price.
If the rules for deducting mortgage interest change you'll always have the option of paying off the remaining balance in cash if you think it's advantageous to do so. If mortgage rates go down you'll have the option of refinancing at abetter rate, and if interest rates go up the money you have invested will earn more interest. Of course if you paid cash you could always take a mortgage at a later date, but you'll have to do it at the rtaes that are offered. If the rates are low you can expect a low rate if you invest the money you borrow. If investment rates are high you can be sure that mortgage rates will also be high.It makes sense to consider what the future might bring, but your current plans should be based on current reality.
Idaho United States
Member #56,504
November 21, 2007
8,002 Posts
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Quote: Originally posted by Coin Toss on Feb 13, 2008
To each his own...
Personally I think parrt of the lure of hitting a jackpot is to have nothing but free time!
I love this answer! I will invest and save of course, but I want to have nothing but free time to do the things I love. I don't want to spend my life doing investments and working.
Idaho United States
Member #56,504
November 21, 2007
8,002 Posts
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Quote: Originally posted by JackpotWanna on Feb 13, 2008
Good Luck All!
Annuity
Cash
Mega Millions Jackpot for Fri, Feb 15, 2008
$179,000,000
$110,000,000
Gross Prize
26 annual payments of $6,884,615
Lump-sum cash: $110,000,000
- 25% Federal Tax
- $1,721,154
- $27,500,000
Subtotal
$5,163,461
$82,500,000
Well I won't be playing since I'm not in a Mega Millions state, but good luck to those who are! I would love to win that jackpot, but then I would love to win a $12 or $15 million jackpot as well.
Magnolia, Delaware United States
Member #18,794
July 20, 2005
789 Posts
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Quote: Originally posted by Yaddamean on Feb 9, 2008
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?
It makes no sense to take payments at any age! Take the lump sum and get the proper financial advice to maximize your return on your investments and live a comfortable life from then on. The lump sum pays less taxes over time than the annuity! Yes you pay more every year with an annuity! I'd rather pay 15% in capitol gains tax, than the whopping 25% right off the top every year and then still owe another 10% to the IRS for a grand total of 35% in taxes paid each year that I'd receive the annuity payment! Now which would you rather pay 15% capitol gains tax or 35% every year you receive your annuity check?
I hope it would be a no brainier for most here on LP. But who knows, Anything is possible!
Keep dreaming the impossible dream, it just may come true!
Westchester, New York United States
Member #49,343
January 27, 2007
168 Posts
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Quote: Originally posted by JackpotWanna on Feb 13, 2008
Good Luck All!
Annuity
Cash
Mega Millions Jackpot for Fri, Feb 15, 2008
$179,000,000
$110,000,000
Gross Prize
26 annual payments of $6,884,615
Lump-sum cash: $110,000,000
- 25% Federal Tax
- $1,721,154
- $27,500,000
Subtotal
$5,163,461
$82,500,000
It's about time this thing starts to grow! Anyone else notice that both the Powerball and Megamillions rarely see the large jackpots the saw about 5 years back? Why is that? It seems like they rarely break 200 million, when at one time they seemed to continuously roll to 300 mil +. Don't get me wrong, I'll be perfectly happy with a 200 mil win, it just is so much more exciting when it grows!
"If you just keep believing, that dream that you wish will come true"
Oklahoma United States
Member #33,769
February 24, 2006
3,146 Posts
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Powerball Jackpots can be taken by annuity and then cashed out later.
It's a good tactic to use. It let's everyone around you know that you are on a fixed income and once they get used to that idea, you can cash out your annuity and invest it for better gains and do it descretely too.
United States
Member #17,554
June 22, 2005
5,582 Posts
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Quote: Originally posted by sfilippo on Feb 15, 2008
Powerball Jackpots can be taken by annuity and then cashed out later.
It's a good tactic to use. It let's everyone around you know that you are on a fixed income and once they get used to that idea, you can cash out your annuity and invest it for better gains and do it descretely too.
That's hilarious. Are you telling me that people wouldn't come out of the woodwork asking for money because they knew that you were on a fixed income of almost 7 million a year, for 26 years?
United States
Member #50,122
February 26, 2007
601 Posts
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Quote: Originally posted by pacattack05 on Feb 15, 2008
That's hilarious. Are you telling me that people wouldn't come out of the woodwork asking for money because they knew that you were on a fixed income of almost 7 million a year, for 26 years?
That's an excellent line tho! I can't count the number of times I've heard people say they can't afford something because they're "on a fixed income." Can you imagine the first time you told someone that as a lottery winner? "You want me to buy you a car? Oh I'm sorry, didn't you know? I'm on a fixed income." Bet it'd stop them in their tracks. Well, at least for a minute.
United States
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June 22, 2005
5,582 Posts
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Quote: Originally posted by LuckyLilly on Feb 15, 2008
That's an excellent line tho! I can't count the number of times I've heard people say they can't afford something because they're "on a fixed income." Can you imagine the first time you told someone that as a lottery winner? "You want me to buy you a car? Oh I'm sorry, didn't you know? I'm on a fixed income." Bet it'd stop them in their tracks. Well, at least for a minute.
Well that makes sense if you could be anonymous. They wouldn't even think of asking you for money if they didn't know you won, but everybody will know...lol
What? you want 10 grand for a new car? Are you kidding me? I only make 7 million a year....lol
United States
Member #33,587
February 22, 2006
2,068 Posts
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Quote: Originally posted by Stack47 on Feb 17, 2008
Since the cash option would give you more money to invest with them, I'm pretty sure a financial advisor would suggest taking the lump sum.
Hey stack47 i woud like to thank for taking time out to explain the questions i had on vtract numbers and how they work. Thank you for people like you .. few in a millions.
San Diego, CA United States
Member #58,384
February 12, 2008
335 Posts
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It seems like a no brainer to take the lump sum. Wouldn't it be possible to get a higher rate of return by investing the lump sum than the effective rate with taking the annual payments without significnt risk ?