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Author Topic: site breaks down how much you'd get net out of 540 million lottery win for each state [Locked]
Fozzie_Bear  4 stars
Posts: 2,490
Registered: 2001-12-20 01:43:43
 Date Posted: 1/1/00 12:00am Subject: site breaks down how much you'd get net out of 540 million lottery win for each state
maybe if you are talking about buying some retardedly expensive painting or something

 

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Ungabhunga  2 stars
Posts: 319
Registered: 2008-8-7 11:25:39
 Date Posted: 1/1/00 12:00am Subject: site breaks down how much you'd get net out of 540 million lottery win for each state
Lump sum for me please.

 

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HeartView  4 stars
Title: Be right back...
Posts: 1,209
Registered: 2001-12-20 08:11:56
 Date Posted: 1/1/00 12:00am Subject: site breaks down how much you'd get net out of 540 million lottery win for each state
JD_HOGG posted:
HeartView posted:
Cao_Ren posted:
I'd take the bulk sum. I could invest 200 million and easily make 10 million a year in dividends and interest.



You'd be starting out over $100 million behind from the payment method. Are you going to make that back over 26 years considering you could still invest your yearly payments and get the same interest/dividends?



Dividends tend to grow over time. That fixed payment won't.



My point is that you would be investing the payments just like you did the lump sum. After 26 years, you'd essentially end up with $100 million more in "interest" by not choosing the lump sum. You'd get that $100 million bonus even if your investments were doing poorly over time.

I look at it this way. I would not use the entire lump sum amount in the first year, I'd only use some of it. If I only intend to use a portion that is less than the yearly payout then then the yearly payout gives me one distinct advantage. I get 25 more payments even if I screw up badly the first year. Screwing up badly is VERY likely for someone not used to handling that kind of money (which would be everyone on ACF).

 

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Cao_Ren  1 star
Title: Archmaster
Posts: 157
Registered: 2001-7-13 18:33:35
 Date Posted: 1/1/00 12:00am Subject: site breaks down how much you'd get net out of 540 million lottery win for each state
HeartView posted:
JD_HOGG posted:
HeartView posted:
You'd be starting out over $100 million behind from the payment method. Are you going to make that back over 26 years considering you could still invest your yearly payments and get the same interest/dividends?



Dividends tend to grow over time. That fixed payment won't.



My point is that you would be investing the payments just like you did the lump sum. After 26 years, you'd essentially end up with $100 million more in "interest" by not choosing the lump sum. You'd get that $100 million bonus even if your investments were doing poorly over time.

I look at it this way. I would not use the entire lump sum amount in the first year, I'd only use some of it. If I only intend to use a portion that is less than the yearly payout then then the yearly payout gives me one distinct advantage. I get 25 more payments even if I screw up badly the first year. Screwing up badly is VERY likely for someone not used to handling that kind of money (which would be everyone on ACF).

I know how to invest. With the lump sum if I invest 200 million, I get 79 million left to play with and give to family and charity.

Now, onto investing 200 million versus investing 15 million per year.

After one year, at 5 percent (and I'd likely pull closer to 10%), I'd have 210 million. That's an extra 10 million.

On the other hand, I'd only have 15.75 million. And, if I invest all of it, I have no play money.

Now for the later years. Let's forget my play money. We're only talking investments now. Calculations are (lump * 1.05) vs (total annuity * 1.05 + 15 mill)

in millions:
year 2: 210 vs 30.75
year 3: 220.05 vs 47.29
year 4: 231.05 vs 64.65
year 5: 242.6 vs 82.88
year 6: 254.73 vs 102.02
year 7: 267.47 vs 122.12
year 8: 280.84 vs 143.23
year 9: 294.88 vs 165.39
year 10: 309.62 vs 188.66
year 11: 325.10 vs 213.09
year 12: 341.36 vs 238.74
year 13: 358.43 vs 265.68
year 14: 376.35 vs 293.96
year 15: 395.17 vs 323.66
year 16: 414.93 vs 354.84
year 17: 435.68 vs 387.58
year 18: 457.46 vs 421.96
year 19: 480.33 vs 458.06
year 20: 504.35 vs 495.96
year 21: 529.57 vs 535.76

So, it would take 21 years for the annuity to beat the lump sum at 5%. However, in this scenario, the lump sum person got 79 million to play with up front. The annuity person didn't get anything. This would look a lot different if the annuity was reduced for play money.

 

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JD_HOGG  4 stars
Posts: 2,846
Registered: 2008-3-18 08:04:21
 Date Posted: 1/1/00 12:00am Subject: site breaks down how much you'd get net out of 540 million lottery win for each state
HeartView posted:
JD_HOGG posted:
HeartView posted:
Cao_Ren posted:
I'd take the bulk sum. I could invest 200 million and easily make 10 million a year in dividends and interest.



You'd be starting out over $100 million behind from the payment method. Are you going to make that back over 26 years considering you could still invest your yearly payments and get the same interest/dividends?



Dividends tend to grow over time. That fixed payment won't.



My point is that you would be investing the payments just like you did the lump sum. After 26 years, you'd essentially end up with $100 million more in "interest" by not choosing the lump sum. You'd get that $100 million bonus even if your investments were doing poorly over time.

I look at it this way. I would not use the entire lump sum amount in the first year, I'd only use some of it. If I only intend to use a portion that is less than the yearly payout then then the yearly payout gives me one distinct advantage. I get 25 more payments even if I screw up badly the first year. Screwing up badly is VERY likely for someone not used to handling that kind of money (which would be everyone on ACF).


What do u mean? I have vaults full of money. I'm a fat cat.
Chevya
Posts: 48
Registered: 2002-3-17 05:52:26
 Date Posted: 1/1/00 12:00am Subject: site breaks down how much you'd get net out of 540 million lottery win for each state
Sounds like HV is going to go put 30 billion pennies (give or take a few) on the railroad tracks if he wins.
winga  4 stars
Title: Canadian
Posts: 2,256
Registered: 2001-4-27 15:46:32
 Date Posted: 1/1/00 12:00am Subject: site breaks down how much you'd get net out of 540 million lottery win for each state
Fozzie_Bear posted:
I'd take a lump sum simply because I doubt I'll be alive the whole 20+ years


This.

You never know...
HeartView  4 stars
Title: Be right back...
Posts: 1,209
Registered: 2001-12-20 08:11:56
 Date Posted: 1/1/00 12:00am Subject: site breaks down how much you'd get net out of 540 million lottery win for each state
Chevya posted:
Sounds like HV is going to go put 30 billion pennies (give or take a few) on the railroad tracks if he wins.



 

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HeartView  4 stars
Title: Be right back...
Posts: 1,209
Registered: 2001-12-20 08:11:56
 Date Posted: 1/1/00 12:00am Subject: site breaks down how much you'd get net out of 540 million lottery win for each state
Cao_Ren posted:
year 21: 529.57 vs 535.76

So, it would take 21 years for the annuity to beat the lump sum at 5%. However, in this scenario, the lump sum person got 79 million to play with up front. The annuity person didn't get anything. This would look a lot different if the annuity was reduced for play money.



The yearly payouts continue to 26 years.

It only matters if you plan to use more than what the yearly payouts would be, if you anticipate spending more in the first few years then the lump sum is the way to go, otherwise go with the payments. This is especially true if you are young enough to survive the 26 years of payments.

 

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-Abysmal-  4 stars
Posts: 1,328
Registered: 2000-12-20 06:45:24
 Date Posted: 1/1/00 12:01am Subject: site breaks down how much you'd get net out of 540 million lottery win for each state
lump sum here in MA, kidnap my kid from his mother and move to some island and not tell a soul!!

 

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