Stay away from the bums baby and you’ll be ok.
However, one problem with an annuity is that you don't get cost of living adjustments so it gets worth less and less every year.
obviously cash upfront because inflation will eat away payments it over time.
NPV... Always take lump sum....
she’s 20, she’s probably not very fiscally savvy. The most she can blow thru is $1k at a time versus blowing the whole lot over a very short time. Good call for her situation.
Still at the end of the day, it's all free money, minus the initial purchase price of the lottery ticket.
And perhaps she was self-aware towards her own spending habits and knew that if she took the lump sum, she'd just blow through it.
My biggest concern is my lack of confidence that there's even going to be a lottery around in 25 years to dole out her checks.
to the winner, get off the friggn internet!
Take the money now. Invest wisely.
Anyone hear about Publishers Clearinghouse. They went bankrupt leaving everyone screwed.
At her age that’s the right move. She now has a base income, that’s pretty good, especially for a 20 year old. Any job she gets is bonus cash, if she loses her job no big deal. And come retirement time that base is still there.
There is also the variable of the time value of money.
IF she were to take the lump sum she'd net about $500-$600k....depending on taxes and such.
Invest that money now for 40 years and she'd possible have $22,629,627 at age 60...that's real money right there.
That's IF she put that money in and left it alone.
If she invests, at a $1000/week, she will definitely get a lot more
Stay away from the bums baby and you’ll be ok.
The scammers will hate her because they can only scam her in small increments instead of a lump sum.
Except for J.D. Wentworth. They can scam her out of her entire future income stream in return for a much, much lower lump sum than was previously on the table.
She will have totaled a million in 19.23 years. Everything after that is gravy!
Taxes on the grand a week will undoubtedly be a much smaller percentage than on the lump sum, too...even in Canada.
inflation is a huge issue in the context of the payout and the fiscal condition of most western countries (including canada). I think this is the most valid criticism of her choice. I also think 500k cash would provide opportunies now that could pay off the rest of her life, but not everyone getting thta post-tax lump sum would do useful or wise things.
There may not be a Canadá in 25 years.
I’d take the lump sum as well. Wifey knows someone who won Publisher’s Clearing House many moons ago. $23M. She chose the lifetime annuity. PCH is now out of business, and she is out of luck.
It’s $1000 in Canadian dollars so maybe $700 in US dollars. Who knows how much $1000 Canadian will buy in 20 years? But she probably made the right choice for a 20-year-old.
Lump sum or weekly? Depends on how you can structure the write-offs.
Most people would blow it taking it upfront.
Good move on her part
She greatly increased her odds of avoiding being bankrupt and wretched like most lottery winners 2-3 years post-win.