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If you won 150M would you take a lump sum of 88M?

Discussion in 'Other Off Topic Forum' started by 62 250 GTO, Nov 23, 2004.

  1. 62 250 GTO

    62 250 GTO F1 Veteran

    Jan 9, 2004
    7,732
    Nova Scotia Canada
    Full Name:
    Neil
    I guess It would depend on how quickly you would get the rest. But 88M is almost 1/2 of the original amount. Unless I was a big swingin' businessman who could put the 88M to work very soon and make up for the other 42M {less tax of course}, I would wait and take it piece by piece as long as I would have it all within 10-15 years. I'm not really sure how it works but grabing as much of it as you can seems to be the losing end of winning it.

    Also, {no one is to be offended} someone who makes 30k a year as a full grown adult probably doesn't have the education to manage a bank account the size of 2 banks. So wouldn't it make sense to go back to school and get some money management under your belt and let this sink in, before you start buying airplanes?
     
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  3. spidr

    spidr Formula Junior

    Nov 13, 2003
    281
    People do that because they are afraid if they don't they won't get it all....
     
  4. 62 250 GTO

    62 250 GTO F1 Veteran

    Jan 9, 2004
    7,732
    Nova Scotia Canada
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    Neil
    If they die? Or if the Lottery co. says, "that's enough for you"?
     
  5. 134282

    134282 Four Time F1 World Champ
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    Aug 3, 2002
    40,647
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    Carbon McCoy
    i could die tomorrow and if i didn't take the lump sum, that money goes right back to the government, i would assume... i don't know that for sure, but the assumption is enough for me...

    i have such a huge hard on for the government by way of the lottery... Back in Al Capone's day, they "ran numbers" and it was illegal and people were shot and killed over it and arrested and yadda yadda yadda... Now that the government has control of it and can tax the living, breathing, Jesus Christ piss out of it, it's all of a sudden legal... That really grabs me by the short and curlies...[/rant]
     
  6. Tyler

    Tyler F1 Rookie

    Dec 19, 2001
    4,274
    dusty old farm town
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    Tyler
    Lump sum please.

    Powerball annuity option is a 29 year payout(30 payments). Apply 29 years worth of compound interest to the lump sum amount and compare.
     
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  8. 134282

    134282 Four Time F1 World Champ
    BANNED

    Aug 3, 2002
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    Carbon McCoy
    LOL, great point...!
     
  9. amenasce

    amenasce Two Time F1 World Champ
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    Oct 17, 2001
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    Joe Mansion
    I would take it all. U never know what can happen..
     
  10. FIAutoSports

    FIAutoSports Formula Junior

    Nov 13, 2004
    615
    Baltimore, MD, US
    Full Name:
    John Ritenour
    If you figure you get $88M in one lump sum, deposit half into an interest bearing acct of let's say 4%. Your return for that 4% of $44M would be $1.76M. Now, don't forget you still have the other $44M to play with. Or you could deposit $60M and earn $2.4M. Multiply that by 20 (for the 20 years of payout), and that is an additional $48M for a total of $108M. Not to mention if you withdraw that amount of money every year to spend it. Keeping that money in there, your gains and initial deposit would be over the $120M mark.

    then there is taxes, etc.

    With that amount of money, you really have to try hard to lose it.
     
  11. mbmike

    mbmike Formula Junior

    Oct 31, 2003
    749
    The lump sum is the amount of money that the lottery organization actually has.

    If you take that sum, then, well, that's what you get.

    If you take the installments (over 20-30 years, typically), then they take that lump sum amount and place it in extremely safe investments (bonds). Then they take the lump sum, add in the interest that it will accumulate over the time period, and sell that off as what the jackpot is "worth."

    But, since the lottery's investments are designed for safety, not growth, the interest rates are much lower than what you could do on your own. If you take the lump sum and invest it yourself, you're going to end up with more money in the long run than if you let the lottery invest it for you.
     
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  13. gentry

    gentry Guest

    I would take the lump sum as I would rather work with the money than live off of it (which is all the annuity is good for really).

    I dont know how much taxes would remove from that 88mm figure, but it would leave me with enough money to do some pretty interesting things and take even more action in things Im already involved in.
     
  14. TexasF355F1

    TexasF355F1 Four Time F1 World Champ
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    Feb 2, 2004
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    I would take a lump sum on any lottery winnings.
     
  15. redhead

    redhead F1 Rookie
    Consultant

    Dec 26, 2001
    4,869
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    ~Red~
    {Insert Plane Joke Here}
    :D
     
  16. gentry

    gentry Guest

    lets not, lol. that is SOO last week.
     
  17. BWS550

    BWS550 Wants to be a mod

    Apr 1, 2002
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    BRUCE WELLINGTON
    to do some pretty interesting things and take even more action in things Im already involved in."

    YEA GENTRY, LIKE SELLING COMMERICAL REAL ESTATE, BUSINESS"S, AND YOUR FORTE, AIRPLANES....................

    YOUR FRIEND, BRUCE
     
  18. mprogge23

    mprogge23 Karting

    Aug 29, 2004
    98
    Boca Raton, Fl
    Full Name:
    Matt R.
    First rule of finance is always take a lump sum distribution its called time value of money, 1 million dollars is worth less next year than it is today. Plus right now taxes are extremely low compared to past history and aren't likely to be any lower in the future, so pay 35% now and have $57mm after tax. Buy $10mm in insured muni bonds paying around 4.5% and have $450,000 tax free income and still have $47mm to buy what ever you want. Like someone said earlier you really have to work to spend that kinda money.
     
  19. docdavid

    docdavid Formula Junior

    Jan 23, 2004
    384
    Toronto/K-W
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    Mike D
    Its a hard job but somebodys gotta do it,

    and why the hell was he buying lottery tickets if he had recently declared bankruptcy?
     
  20. Enzo

    Enzo F1 Rookie

    Feb 14, 2002
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    Pat Pasqualini
    #17 Enzo, Nov 23, 2004
    Last edited by a moderator: Sep 7, 2017
  21. jimpo1

    jimpo1 Two Time F1 World Champ
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    Jul 30, 2001
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    Jim E
    Call me a conservative idiot, but I'd probably take the time pay out. I'd also claim the prize through a trust, so if something happened to me, my kids would continue to get the money. I can't imagine trying to deal with a lump sum $56MM payout after taxes. That's the kind of money that ruin you in other ways. On the other hand, $3.5MM a year for the next 30 years, I can handle.
     
  22. BWS550

    BWS550 Wants to be a mod

    Apr 1, 2002
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    BRUCE WELLINGTON
    JIM...YOU ALSO FORGOT A % FOR YOUR FERRARI MAINTENANCE BILLS....
     
  23. SrfCity

    SrfCity F1 Veteran

    Nov 1, 2003
    9,842
    Orange County, CA
    Yea, while this option does not pencil out as well, if you're a f-up(which most of these people are) you could blow your brains out spending it and then do it all over again, year after year. Not unless you started borrowing against future winnings........
     
  24. Schatten

    Schatten F1 World Champ
    Rossa Subscribed Owner

    Apr 3, 2001
    11,237
    Austin, TX
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    Randy
    no tail number, I'm not buying.

    (love that animated gif!)
     
  25. glennm19

    glennm19 Karting

    Nov 6, 2004
    204
    NJ
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    Glenn
    I would take the lump sum for all the reasons already listed...besides, if you are not happy with 88 million and need more, you got other problems.
     
  26. dwhite

    dwhite F1 Rookie

    Carbon - Capone didn't pay taxes. That was his major screw up. De govt likes it's money. BTW, never cheat on reporting your income but, be creative with your deductions, someone once told me.

    Anyway, first I would need to play lotto. If I did win, I would take the payout.
     
  27. TestShoot

    TestShoot F1 World Champ
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    Sep 1, 2003
    10,435
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    King Koopa
    I'd say if you are married, take the lump sum, hat way you screw her out of a few mil during divorce proceedings and you can spend it all fast anyway. If you are like me, and just ain't gonna die anytime soon, and never get sick, payout, it will be like an allowance ;)
     
  28. SefacHotRodder

    SefacHotRodder F1 World Champ

    Dec 20, 2003
    10,918
    NJ
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    Chris
    If you take the annual installments you cannot pass it down to your "heir". Lump sum you can.

    I'm not waiting 4 years for my McLaren and F50. I'll take the lump sum :D
     

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