Lottery winner rejects 1 million lump sums for 1k weekly payment, right move?

[num123]

I'd normally say lump sum, but at 20 I can't be too mad. She might know she doesn't have the discipline to not fukk up 1M cash. A free 4K a month is nothing to sneeze at. If she is going to try to live well, she still needs good financial planning. 4K a month might be nothing in 40 years.

If you do not have discipline to blow a million dollars, then why would they have it with a G a week? Why budget when you know you have money coming in regardless for about the next 20 years?

 

[Secure Da Bag]

In America, $1M for the lotto. Lump sum about 500K. Then taxes. That would leave you with about 250K.

So in that context, a 1k a week for life is not a bad deal at all.

 

[Yaboysix]

If you die, does your family inherit the money? If not....

Gimme my lump sum, bih, I could get hit by a bus tomorrow! I need all that NOW!

 

[ORDER_66]

If you die, does your family inherit the money? If not....

Gimme my lump sum, bih, I could get hit by a bus tomorrow! I need all that NOW!

if you die they dont...the spiggot is cut off...

 

[I'm Blackman]

lump sum

 

[Yaboysix]

if you die they dont...the spiggot is cut off...

Ahh, hell nawll!! I need that bread!

 

[2 Up 2 Down]

Not everyone is comfortable investing and being clueless will make you easy prey

 

[TripleAgent]

If you do not have discipline to blow a million dollars, then why would they have it with a G a week? Why budget when you know you have money coming in regardless for about the next 20 years?

There's always another G

 

[Armchair Militant]

Well she’s 20. Probably doesn’t know shyt about investing. It’s a fine decision. She’ll never be broke.

Personally, I’d take the million.

 

[num123]

There's always another G

So what you are saying is that the same irresponsible person will be broke in 20 years instead of immediately.

 

[rabbid]

That’s like making it rain every month on schedule

Shorty on life support

 

[Grand Conde]

So the lump sum is 1 million so they haven’t counted taxes yet

So depending on her state say its 600,000

No right or wrong answer really

There is literally only one right answer.

 

[IsThatBrothaMouzone?]

Present value of money is worth more than the future value

Bingo!

One in the hand is worth two in the bush.

$1k/week = $52k/year

So roughly 20 years to hit $1M.

If you take the $1M upfront, you gotta deal with all the taxes but you know exactly what that burden is. Tax structure can/will change over time so you may lose more $$$$ with higher tax rates.

Only issue with the "lump sum" is that time value of money calc. You're not getting the full lump sum even after tax. Like if you won $500M, the cash value might be $200M, maybe $250M at the most. So then your winnings are really $250M minus taxes...not $500M minus taxes. Not sure how it works with smaller $1M prizes though.

 

[Absolut]

Note who is saying the payments are the right move, and now you know to never take anything they say seriously again

 

[O.T.I.S.]

She'll make more on interest off investing it in an interest yielding account for life.

At 6% APY, roughly $1,150 a week for life.

How much for your investment services