You won the Lottery!! - What do you take?

[Zekeus]

You take the lump sum because if you take the annually payment and say you die 2 years later, your family WILL NOT receive the remaining winnings. I would take the lump sum and hope for the best! I would invest, but to me that's the obvious. I would also help out my hospital and donate for a better future for medicine.

[JohnBrown1917]

The lump sum is the only sound choice for two main reasons:

1) The annuity option would likely halt if you died unexpectedly.

2) Even in an EXTREMELY conservative investment vehicle (like a government AAA rated bond), you could easily make at least ~8 million a year with in investment income using the lump sum, which would grow exponentially if you reinvested the income. Even with slightly more risk a 5 to 7% return is not unrealistic, which would be 15 million+ -- which is pretty close to the annuity amount.

Yearly options sound great to younger people who don't understand how to invest using bonds, index funds, etc--but anyone familiar with these things would chose the first option in a heartbeat. And honestly, anyone who wins this amount of money should immediately hire a financial planner who would just tell them the same thing anyway.

And what would be the point of investing it?

[FathomFear]

Why are so many people going to invest? What do you need the extra money for?

Everyone with this amount of money invests. If you don't invest you lose money due to inflation. Investing is critical just to keep afloat. Keeping money in an account that is not at least earning interest means that you're just letting the money decay.

[JohnBrown1917]

Everyone with this amount of money invests. If you don't invest you lose money due to inflation. Investing is critical just to keep afloat. Keeping money in an account that is not at least earning interest means that you're just letting the money decay.

Thats what we have saving accounts for(atleast in my country), but you don't need the extra money, so why would you put effort in investing it?

[Deleted]

Lump sum. I can instantly set up my family and close friends for life without the inheritance problems of an annuity. Then we can all live the rest of our lives being filthy rich bastards together.

[Warlord Booty]

Lump sum, pretty easy. 19 mill isn't that much, especially over the course of a year.

[FathomFear]

And what would be the point of investing it?

You're basically asking "What's the point of making more money?" Someone with 350 million dollars could, with almost zero risk, make between 3.5 and 7 million in annual investment income. That's assuming an extremely safe 1 to 2% government bond. If you aren't going to be spending the money in that year, then it should be invested.

Heck, even if you personally had no interest in getting more money, you could make the argument that it would still be irresponsible not to invest it. At the very least you could donate the 3.5 mil to charity or something.

[Pickynerd]

The annuity option.

[Gungtah]

Lump and become Dan Bilzerian.

[JohnBrown1917]

You're basically asking "What's the point of making more money?" Someone with 350 million dollars could, with almost zero risk, make between 3.5 and 7 million in annual investment income. That's assuming an extremely safe 1 to 2% government bond. If you aren't going to be spending the money in that year, then it should be invested.

Heck, even if you personally had no interest in getting more money, you could make the argument that it would still be irresponsible not to invest it. At the very least you could donate the 3.5 mil to charity or something.

Which is something you don't need with that much money, you can easily get 2%+ with a savings account, so why put in the extra effort of finding a company to invest it in?

Yes, i'm indeed asking what the point of making more money is if you have enough money to spend for a dozen or so lifetimes. If somebody wants to, I understand. But its not really something somebody 'should' do.

[Tommy T]

Ridiculous amounts of money.

I'll take the $19M a year. Not interested in buying anything huge although a football (soccer) club might catch my interest.

[JohnBrown1917]

Lump sum, pretty easy. 19 mill isn't that much, especially over the course of a year.

19mil isen't much? What are you smoking?

[breadisfunny]

19mil isen't much? What are you smoking?

it really isnt. not when you get into the world of the really rich. its chump change. some homes can cost upwards of 40 million dollars.

[FathomFear]

Thats what we have saving accounts for(atleast in my country), but you don't need the extra money, so why would you put effort in investing it?

Most people have families, and most people with this amount of money tend to give back in the form of charities. Ultimately, it's just stupid not to invest. You can make 1 or 2% with very little risk.

For example, many schools give out yearly scholarships which are often 100% funded by investment income. A family will donate a large lump sum (say, $200,000), which generates annual investment income of a few thousand dollars, which funds the annual scholarship.

[RoryTee]

it really isnt. not when you get into the world of the really rich. its chump change. some homes can cost upwards of 40 million dollars.

Yeah... I'll have whatever you're having.

[breadisfunny]

Yeah... I'll have whatever you're having.

you obviously have never seen what billionaires can buy.

[Warlord Booty]

it really isnt. not when you get into the world of the really rich. its chump change. some homes can cost upwards of 40 million dollars.

That's what I was thinking. If I bought a couple thousand acres of land in Texas and went about building whatever I wanted on it.... 19 mill won't cut it.

[Wildtree]

The Annuity option

Then invest...


If you used to lump sum you'd have to invest almost all of it immediately or you'd be taxed every year until you had virtually nothing left (IIRC).

And that just sounds like bad business

If you go with the annuity.....
You're getting taxed every year on the annual amount of income.
The lump sum is a one time taxed amount, and if you don't create anymore income from it, there's no other tax applicable.

Another problem with annual pay is the inflation rate. $19mio in 26 years is less worth it than it is today. It's not getting adjusted, so your $19mio in 26 yrs might be worth only $15 mio by today's standards. Plus, as said, you have to pay taxes for that income source.

All in all, the lump sum is the much better option.

[RoryTee]

you obviously have never seen what billionaires can buy.

You don't enter into the world of billionaires when you only have 19 mil.

[breadisfunny]

You don't enter into the world of billionaires when you only have 19 mil.

my point is inflation has made 19,000,000 into not that much money. you do know what inflation is right?