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

[O.T.I.S.]

Idk… how long will it last?

52 weeks a year… technically that’s good as in she will be able to pay for shyt longterm… like a retirement pay but she still gonna be working awhile…


Or she could’ve did the lump sum, bought a place cash and chilled. Still would have to work, but could’ve invested in other things…


So idk. Let’s ask AI

For a $1 million payout, taking the
lump sum is generally better because $1,000 weekly ($52,000/year) would take nearly 20 years just to reach $1 million, missing out on significant investment growth and facing inflation; a lump sum allows for immediate investment, wealth compounding, and control, though it requires financial discipline to avoid overspending, while weekly payments offer security but less growth potential.

Choose the Lump Sum if:

• You want to maximize growth: Investing the full $1 million allows for compound interest, potentially yielding far more than $52,000 annually over time, especially in a good market.
• You need control: You can tailor investments to your specific goals (e.g., real estate, stocks, high-yield savings) and have immediate access for large expenses.
• You are financially disciplined: You won't easily overspend the principal and can manage investment risk responsibly.
• You have a shorter life expectancy: You'll get the full value sooner.

Choose the Weekly Payments if:

• You struggle with overspending: The steady income prevents you from blowing the whole amount quickly.
• You want simplicity: You don't have to worry about making complex investment decisions.
• You need guaranteed income: It provides a predictable, long-term cash flow, acting as a strong safety net, even if you make bad financial choices.

Key Considerations:

• Taxes: While the lump sum is taxed heavily upfront (depending on the source, like a lottery), the tax rate on the $52,000/year payments could be similar over time, but you'd pay taxes on the investment earnings as well.
• Inflation: $1,000/week loses purchasing power over two decades; a lump sum invested can outpace inflation.

The Verdict: For most people with some financial sense, the lump sum offers superior wealth-building potential, but the weekly payments provide peace of mind and budgeting control, especially for those prone to poor spending habits.

 

[etrofllenrod504]

I don’t think there’s a wrong answer here. I can definitely see the logic behind a thousand a week. That keeps consistent money coming in regardless of your situation and also greedy family, friends, etc can’t come with an expectation of handouts cause you only getting a 1k a week. But the money will run out before she hits 40yrs old unless she’s investing or saving(living below her means). She’s playing the long game which is smart but, I hope she gets a legit financial advisor.

 

[The Pledge]

It’s free money either way, no?

Won’t be me mad at her for whatever she chose to do.

$4,000 extra a month is nice af

 

[Peter Popoff]

absolutely the right move.

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.

 

[The Pledge]

I'm confused by the responses in here. You don't need to be a financial advisor to understand that $1 today is worth more than $1 tomorrow. And personally I'm not trusting the government to pay me out forever. Let some crisis happen and they'll just pull this shyt from you with no recourse. I'll take my money upfront.

There’s no precedent of this ever happening since lottery became a thing. Lotto is a separate entity altogether. Government has no say so on any of it.

Worst case was a delayed payment.

 

[Sire366]

Congratulations now you have family and friends wanting to stay with you because you have a house at 20 and “you can afford it, you just a got a million dollars.” if you say no, now your relationships are fractured. We laugh at that Chappell skit of Rick James tearing up Eddie’s couch, but they asked him why he did it and he said “cause Eddie could buy another one”. Get ready for that attitude from everyone you know. Either way you cut it, you’re giving a 20 year old a check for a million dollars. There was a prominent movie star that had this exact scenario happen to him, he said one day he was broke at 19 then next day he signed the contract and he had a million dollars and he took it out in cash because he didn’t trust the bank and bought 7 Rolex’s so he could wear one every day of the week. There’s a reason kids don’t have access to capital and also why winners blow money. And in the grand scheme of things 20 years old you’re likely screwing that money up.

This doesn’t address anything I said. Buy a 3 bedroo
House for about 400000 and charge rent if you want to. Don’t even live in the house, rent it out.

 

[M.O.N.E.Y.]

She got scammed. She could have put the $1M in a high interest account (any good bank would give her a good deal for $1m) and earn $40-50k a year from the interest alone, which is around the same as the yearly payout. The savings would compound and in a decade, the yearly interest payout would be huge.

Due to inflation, the $1,000 weekly payments in 40 years could be nothing

 

[Doomsday]

Being rich is all about the lump sum. She thinks she did the smart thing, but she actually didn't. Getting paid once a week will have her broke.

 

[Umoja]

Give me the money upfront.

Investing the money sensibly, you should be earning about that each year. I understand why she made her choice, but I'd prefer having the money right now.

 

[AceAge]

This doesn’t address anything I said. Buy a 3 bedroo
House for about 400000 and charge rent if you want to. Don’t even live in the house, rent it out.

This is why I don’t do financial advisement anymore, people are dumb. The first sentence of my reply literally addresses the fundamental issue with you proposed scenario. It even applies to this weak ass reply you typed out. Hold this neg, I’m not arguing with an idiot.

 

[Piff Perkins]

All these investment being posted.

S&P index fund is the most reliable American investment available and I see multiple people mentioning it. Whether we're talking 2025 or 1965.

You take the lump sum, make your spending decisions (family? pay rent for multiple years? pay off car note? school?) and then put the vast majority in an index fund. I'd put it in Vanguard. Reinvest your returns.

 

[HiphopRelated]

inflation will eat that 1k

 

[jadillac]

Canada doesn't tax lottery winnings.

She should have took it all and took a couple hundred and opened up a high yield savings account. Depending on the interest rate, she could buy a modest house and just let the money in there grow or even partially live off that.
Take a 100 and play in the market and then splurge a bit.
$1milly ain't that much if you're planning to do anything years down the line. I borderline wouldn't even quite my job. I'd parlay it into my own biz.

Definitely wouldn't quit my job for only 1 mil. One medical issue could eat up all that with no good insurance plan.

But that 1 mil is a helluva cushion, lol

 

[Ezekiel 25:17]

If you don't personally know her you can't say whether her decision is right or wrong

She might have a gambling addiction for all we know.

 

[TripleAgent]

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.