Monday, September 23, 2013

Lottery

Gawker recently reported that an ex-crack addict had been swindled out of a $5 million lottery payment several years ago; the state lottery board tracked him down to make it right. The man was given the option between a lump sum payment of $2.1 million after taxes, or $250,000 annually for the next 20 years.

I surveyed my friends to see which option they'd take.

Grad Student living on a stipend: I think I would get paid out in the allotments because I'm boring. I just think I would like to receive a S--- ton of money every year. It'd be like winning the lottery for the rest of my life!

Co-worker with a semi-crippling shoe addiction: I REALLY wanna take it all in the lump sum. I just really, really, really do. I can't help it.

Boyfran with a left brain the size of Texas: Lump sum FOR SURE. You never know how much taxes or inflation will affect the annuity in the future, so you go for one payout. Then you invest the lump sum wisely so it ends up being even more than the $5 million you originally won.

Me: There is no way on earth I'd be able to take the annuity. In fact, make sure I have a good financial planner who advises me against getting my lump sum in gold coins or I WILL live out my childhood DuckTales fantasy.



Co-worker: F-that, we're going swimming!

Boyfran: Fine, we'll dive into our money and THEN invest it.

That's what you call a win-win. Here's a fantastic and hilarious article on how you would actually recreate the Scrooge McDuck Gold Dive in real life.

3 comments:

mm said...

Annually of course!

Marty Granoff said...
This comment has been removed by the author.
Marty Granoff said...

That's some interesting news. At least the state board made the effort to track him and make it up for his swindled winnings. Looking at the list of responses in your post, there's a good argument both for and against having a lump sum payout. I guess most people equate having a lump sum payout as spending it all away in indulgence. But as your boyfriend pointed out, it may actually be the smarter option to do. And my two cents on your response. If you don't feel like having enough self-control not to spend it straightaway, you can hire a financial counselor for that as well.

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