Okay the article linked in the OP has a recommendation from an economist that you take the lump sum but I had always heard if you're a younger person and you've got the time, the general wisdom is to take the yearly payout?
But I don't really know what the interest rate situation is here
I don't actually know how money works, in fact
It's related to the time-value of money. First off money is constantly decreasing in value due to inflation. The US inflation rate is generally around 2%, which means in 26 years when you got your final installment, that installment would be worth about a third as much as your first installment. Second off, even ignoring inflation, a dollar now is worth more than a dollar 10 years from now, because you can use the current-time dollar to earn more dollars in the intervening 10 years. This is known as investing. The simplest type of investment is a savings account, where you can expect to accrue 1-2% a year (barely matching inflation), but in a stock backed mutual fund, 6% is a pretty reasonable expectation. For higher risk investments (eg venture capital), the returns can be much higher.
Basically, by taking the lump sum and investing wisely, you will get more utility out of your winnings than by taking the annuity, which steadily decreases in value over time due to inflation.
Okay the article linked in the OP has a recommendation from an economist that you take the lump sum but I had always heard if you're a younger person and you've got the time, the general wisdom is to take the yearly payout?
But I don't really know what the interest rate situation is here
I don't actually know how money works, in fact
It's related to the time-value of money. First off money is constantly decreasing in value due to inflation. The US inflation rate is generally around 2%, which means in 26 years when you got your final installment, that installment would be worth about a third as much as your first installment. Second off, even ignoring inflation, a dollar now is worth more than a dollar 10 years from now, because you can use the current-time dollar to earn more dollars in the intervening 10 years. This is known as investing. The simplest type of investment is a savings account, where you can expect to accrue 1-2% a year (barely matching inflation), but in a stock backed mutual fund, 6% is a pretty reasonable expectation. For higher risk investments (eg venture capital), the returns can be much higher.
Basically, by taking the lump sum and investing wisely, you will get more utility out of your winnings than by taking the annuity, which steadily decreases in value over time due to inflation.
This was very helpful!
In the end though either choice is still way more scratch than I would ever actually possibly need
guys i just bought 5 tickets because i was drunk at work
*crosses fingers that he'll be drunk at home later*
0
Options
KalTorakOne way or another, they all end up inthe Undercity.Registered Userregular
Just stopped at a rest stop. The line at the lotto ticket machine was... well, let's just say, it existed.
If I suddenly had $640 million, I'd probably make a call to the Bill & Melinda Gates Foundation. Be like, "Bill, you seem to know how to keep giant stacks of readies from turning you into a dick."
I don’t think there’s any possible way I could spend that much money. I wouldn’t even know what to do, buy some fancy digs? Go to Wrestlemania every year? Train to become Batman?
I’d probably just end up giving a ton of it away.
0
Options
nevilleThe Worst Gay(Seriously. The Worst!)Registered Userregular
Oh yeah, I'd also bankroll Joss Whedon for any projects he wants to do in my budget.
Hello Firefly returning to the small screen.
Spike spin-off? Check.
0
Options
cadmunkyOne hand on the bottle,The other a shaking fist.Registered Userregular
Oh yeah, I'd also bankroll Joss Whedon for any projects he wants to do in my budget.
Hello Firefly returning to the small screen.
Spike spin-off? Check.
ButtlordFornicusLord of Bondage and PainRegistered Userregular
if i had this kind of money i'd probably buy a bunch of drugs and comics and build a mansion with a secret room that has a passage to another secret room
one would have porn and the other would have comics
not sure which would be hte first room and which would be the super secret room
also i'd pay dave simon to make season 6 of The Wire
0
Options
nevilleThe Worst Gay(Seriously. The Worst!)Registered Userregular
Oh yeah, I'd also bankroll Joss Whedon for any projects he wants to do in my budget.
Hello Firefly returning to the small screen.
Spike spin-off? Check.
Larlarconsecutive normal brunchesModerator, ClubPAmod
Wow, I didn't think that would be an actual link.
0
Options
ButtlordFornicusLord of Bondage and PainRegistered Userregular
i'd also get robot legs and bankroll the murder of a homeless man
0
Options
Metzger MeisterIt Gets Worsebefore it gets any better.Registered Userregular
buy a two hundred million dollar yacht, staff it with the most extravagantly beautiful bisexual sailors/sailstresses, and invite all my friends to sail around the world with me while we lived on the interest. i'd buy my mom and step-dad a hundred acres of land and let them build their dream home on it. My family would all be taken care of. And at the end of my ENORMOUS rush of spending, I would probably still have a few hundred million to throw around and an army of financiers and accountants to help me manage it.
also, yeah, obvs like 20 million dollar charity contributions, especially to local charities.
0
Options
nevilleThe Worst Gay(Seriously. The Worst!)Registered Userregular
buy a two hundred million dollar yacht, staff it with the most extravagantly beautiful bisexual sailors/sailstresses, and invite all my friends to sail around the world with me while we lived on the interest. i'd buy my mom and step-dad a hundred acres of land and let them build their dream home on it. My family would all be taken care of. And at the end of my ENORMOUS rush of spending, I would probably still have a few hundred million to throw around and an army of financiers and accountants to help me manage it.
also, yeah, obvs like 20 million dollar charity contributions, especially to local charities.
This materialistic post really works with your avatar
Posts
I play one with the Lost numbers, as a joke (but not really) and then one with totally random ones
Like, immediately
Nobody would see or hear from me for months until I return all Count of Monte Cristo-style
It's related to the time-value of money. First off money is constantly decreasing in value due to inflation. The US inflation rate is generally around 2%, which means in 26 years when you got your final installment, that installment would be worth about a third as much as your first installment. Second off, even ignoring inflation, a dollar now is worth more than a dollar 10 years from now, because you can use the current-time dollar to earn more dollars in the intervening 10 years. This is known as investing. The simplest type of investment is a savings account, where you can expect to accrue 1-2% a year (barely matching inflation), but in a stock backed mutual fund, 6% is a pretty reasonable expectation. For higher risk investments (eg venture capital), the returns can be much higher.
Basically, by taking the lump sum and investing wisely, you will get more utility out of your winnings than by taking the annuity, which steadily decreases in value over time due to inflation.
This was very helpful!
In the end though either choice is still way more scratch than I would ever actually possibly need
This. I'd also ask if I could have a walk on role as Abed's cousin or something.
Coran Attack!
*crosses fingers that he'll be drunk at home later*
If I suddenly had $640 million, I'd probably make a call to the Bill & Melinda Gates Foundation. Be like, "Bill, you seem to know how to keep giant stacks of readies from turning you into a dick."
Coran Attack!
it is this, man....maybe even three, man
man
Coran Attack!
People wouldn't care about the lack of aliens to hate because you'd be paying them mad sacks of cash to do their thing
I'd just do the eyes.
he's got cool eyes.
I’d probably just end up giving a ton of it away.
Hello Firefly returning to the small screen.
Spike spin-off? Check.
And I will be your miranda.
Think of me in the suit. Do it now!
"Think of it as Evolution in Action"
http://hahgay.com/
Also I'd hire Pip as my personal chef.
And I'd throw so much money at @Stale and @Munkus Beaver and @Fyndir
Best doctors in the planet? Hell yes.
I ain't need no fancy pants doctors.
A cyborg body, on the other hand...
P.S.
Dat gray-haired azz
in spirit yes
one would have porn and the other would have comics
not sure which would be hte first room and which would be the super secret room
also i'd pay dave simon to make season 6 of The Wire
Probably.
Or I'd hire a lobbyist to make laws to protect us from GLMF if we failed to give sufficiently and they became harassing.
oh
my
GOD
also, yeah, obvs like 20 million dollar charity contributions, especially to local charities.
He's Scottish.
fuck poor people
tehy should bootstrap their way into money like i did by winning the lotto!
This materialistic post really works with your avatar
Coran Attack!
Debilitatingly so.