This is also why if you hit the lottery, you should take the discounted upfront cash payout, and not get it paid in an annual annuity for 20 years. You never know if the government is suddenly going become moral about gambling, and cancel all lottery payments.
I guess what I’m trying to say is, don’t delude yourself into thinking you’re being smart about the lottery by thinking about which is the smarter course of action in case of a win. The only way to be smart about the lottery is to not play.
Also because that lump sum is all there is. If you take the annuity they put the lump sum into an investment account and then pay you out of the proceeds (from which they take a cut, of course), and you can get the same returns they get, without losing their cut, doing it yourself.
They also take a big wet bite out of the total when you do a lump sum pay out. Then you pay taxes on it too. Oh and of you do the 20 year payout and die they keep it all. You can’t transfer it.
Biggest mistake people do is put it all towards a house for a low or no monthly mortgage. It’s better to invest it. Buy two. One to live in and a multi to rent out.
Yeah, my plan would be to buy a (small, perhaps even cozy) house to live in right now because my living situation is not ideal, set some small portion of it aside just to blow on stupid shit to get it out of my system, and then invest the rest to ensure that I can live off the proceeds for the rest of my life. Anything beyond what is necessary to secure myself a modest but comfortable lifestyle is going to be given away to help people.
Absolutely. However, if you are not the best with money, or on the irresponsible side; it might be best to take the annuity. Mathematically it makes no sense to do so, but if it stops you from blowing it all on hookers and coke in two years then its for the best. In other words, if you having it all is riskier than the state keeping track of it.
This is also why if you hit the lottery, you should take the discounted upfront cash payout, and not get it paid in an annual annuity for 20 years. You never know if the government is suddenly going become moral about gambling, and cancel all lottery payments.
Take the money and run.
To be fair, it’s best to not participate in the lottery.
True but that is a situation that doesn’t really apply very often in the “if you hit the lottery” situation mentioned in the post you replied to.
I guess what I’m trying to say is, don’t delude yourself into thinking you’re being smart about the lottery by thinking about which is the smarter course of action in case of a win. The only way to be smart about the lottery is to not play.
Also because that lump sum is all there is. If you take the annuity they put the lump sum into an investment account and then pay you out of the proceeds (from which they take a cut, of course), and you can get the same returns they get, without losing their cut, doing it yourself.
They also take a big wet bite out of the total when you do a lump sum pay out. Then you pay taxes on it too. Oh and of you do the 20 year payout and die they keep it all. You can’t transfer it.
No doubt, but it’s still a lot better than doing the annuity. Half of fuck you money is still fuck you money.
Biggest mistake people do is put it all towards a house for a low or no monthly mortgage. It’s better to invest it. Buy two. One to live in and a multi to rent out.
Yeah, my plan would be to buy a (small, perhaps even cozy) house to live in right now because my living situation is not ideal, set some small portion of it aside just to blow on stupid shit to get it out of my system, and then invest the rest to ensure that I can live off the proceeds for the rest of my life. Anything beyond what is necessary to secure myself a modest but comfortable lifestyle is going to be given away to help people.
Absolutely. However, if you are not the best with money, or on the irresponsible side; it might be best to take the annuity. Mathematically it makes no sense to do so, but if it stops you from blowing it all on hookers and coke in two years then its for the best. In other words, if you having it all is riskier than the state keeping track of it.
What’s wrong with hookers and coke?
Nothing… the real issue is all the other money you wasted.
Can’t you open up a trust with the money and put a provision on it saving you from yourself?
Sure you can… but that would mean you are responsible with money ahah
Im talking about someone who doesnt know wtf any of that means. Like the town idiot.