Quote:
Originally Posted by BestXXXPorn
He also plans to seek advice "from people who know about money" about whether to take the jackpot in 30 payments over 29 years or the lump-sum amount of $124,875,122.
Here's some good advice if you ever win a lottery, TAKE THE LUMP SUM!
There's companies out there that actually bail out people who take payments... They buy their winnings because they're government backed annuities. VERY safe and very high earning... They then resell those annuities to investors and take points off the top.
Very lucrative business but what ends up happening with these people is once they're "the guy who won the lottery" to all their neighbors, friends, family... they're expected to pay for everything everywhere they go. They buy a new house, new cars, etc... but usually people playing the lottery have no experience managing money. They over spend, get themselves in debt and companies like Stone Street sweep in for the bailout.
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If it were me advising him I would tell him to do just the opposite and take the payments. Here is why. The way I understand it you get around 20-25K per year per million won for 30 years after taxes. It depends on where you live and the tax level. This allows you to actually get more of the money because when you take the lump sum it is only half of the total jackpot and then they tax that. So he could get 124 million, but they would tax that amount so he will actually end up with around 70-80 million. That is still a ton of money, but only about half what he would get if he takes the payments.
The other reason is that the payments last 30 years. So if he spends the first 5 years of his payments buying stupid stuff and getting suckered into bad investments and he loses it all, he still has 25 years left to get his shit together. Even if he doesn't ever get his shit together he will live a pretty good life on around 6-8 million a year for 30 years. He is 29 years old now so he would be 60 when the payments run out. Even if he just put 200K per year away in a savings account at 2% interest he would have 8.6 million waiting for him when he hits 60 years old.
If he takes the lump sum up front and blows through it all it is possible in a few years that he will be broke and have no hope of ever making that money back.
I'm not saying he won't so something stupid with the payments, but the odds are a lot less that he will screw his life up with them.