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Posted: 2/22/2006 10:56:41 AM EDT
[Last Edit: 3/3/2006 3:53:23 AM EDT by njensen1]


A group of workers from a Lincoln meat processing plant are now
multi-millionaires. The group of eight workers came forward minutes ago to claim
the record 365 (m)-million-dollar powerball jackpot -- the biggest jackpot on
record for any lottery in the United States.

All eight work at a Conagra ham processing plant near the U-Stop convenience
store where they bought the winning ticket.

The winners are: 56-year-old Quang Dao (wang dow); 53-year-old David Gehle
(gay-lee); 26-year-old Alain Maboussou (a-lin mah-boo-so); 29-year-old Chasity
Rutjens (rut-jens); 30-year-old Robert Stewart; 47-year-old Michael Terpstra;
34-year-old Dung Tran (dong trahn); and 40-year-old Eric Zornes (zorns).

The winners chose a lump sum cash option, giving them more than 177 (m)
million dollars collectively, or 15-and-a-half (m) million dollars each after
taxes.




Just fu**ing great.
Link Posted: 2/22/2006 10:57:56 AM EDT
If I would have won the world would be a better place.

<­BR>
For me at least.
Link Posted: 2/22/2006 11:00:19 AM EDT
I spose I Shouldnt be so Cynical
Link Posted: 2/22/2006 11:02:13 AM EDT
Only in America!
Link Posted: 2/22/2006 11:02:18 AM EDT
[Last Edit: 2/22/2006 11:04:58 AM EDT by John_Wayne777]

Originally Posted By njensen1:


A group of workers from a Lincoln meat processing plant are now
multi-millionaires. The group of eight workers came forward minutes ago to claim
the record 365 (m)-million-dollar powerball jackpot -- the biggest jackpot on
record for any lottery in the United States.

All eight work at a Conagra ham processing plant near the U-Stop convenience
store where they bought the winning ticket.

The winners are: 56-year-old Quang Dao (wang dow); 53-year-old David Gehle
(gay-lee); 26-year-old Alain Maboussou (a-lin mah-boo-so); 29-year-old Chasity
Rutjens (rut-jens); 30-year-old Robert Stewart; 47-year-old Michael Terpstra;
34-year-old Dung Tran (dong trahn); and 40-year-old Eric Zornes (zorns).

The winners chose a lump sum cash option, giving them more than 177 (m)
million dollars collectively, or 15-and-a-half (m) million dollars each after
taxes.




Just fu**ing great.
I sure hope all of there Imigrant Papers are in Order.
Im sure they will all buy a Toyota land Cruiser, a Ninja, And a "too fast to Furious" Honda Civic



Lets see. 365 million divided up 8 ways is 45.625 million dollars each.

For an average 50,000 dollar a year payout per million every year, they would receive roughly 2.25 million dollars per year for a 20 year payout.

Instead, they chose to sacrifice THIRTY MILLION DOLLARS UP FRONT for a 15 million dollar immediate payout.

Even when they get rich, they don't get smart.

ETA -- With reasonable investments within 10 years they could turn the roughly 20 million they would receive into a significant ammount more and STILL be receiving their yearly 2.25 million dollar payouts.

Again, a pretty stupid move.
Link Posted: 2/22/2006 11:03:29 AM EDT
Link Posted: 2/22/2006 11:03:46 AM EDT
Within a year they'll either be dead or broke.
Link Posted: 2/22/2006 11:04:14 AM EDT
Just heard on the news where each winner will receive 15 million each in a lump sum payout. Good for them.

Now, imagine the guy at that same meat packing plant that was asked to get in on the pool, and he declined.
Link Posted: 2/22/2006 11:05:12 AM EDT
Actually it's smarter to take the lump sum, if you invest it.

I'll give any one here 10-1 odd that 7 out of 8 of these people are bankrupt, in a legal battle, flat broke, and/or worse off that they were before they won.
Link Posted: 2/22/2006 11:06:58 AM EDT

Originally Posted By SIG-24-7:
Just heard on the news where each winner will receive 15 million each in a lump sum payout. Good for them.



No, STUPID for them, as they would get 16 million dollars in just 8 years rather than taking 15 million up front. If they had taken the normal payout, each of them would have had over 45 million in the next 20 years instead of 15 million right now.

They gave well over half of their money away TO THE LOTTERY PEOPLE.

That, my friends, was f*cking stupid.
Link Posted: 2/22/2006 11:07:15 AM EDT

Originally Posted By AcidGambit:
Actually it's smarter to take the lump sum, if you invest it.

I'll give any one here 10-1 odd that 7 out of 8 of these people are bankrupt, in a legal battle, flat broke, and/or worse off that they were before they won.



I'll take that bet. Don'r forget, these are Nebraskans. Not a bunch of New Yorkers.
Link Posted: 2/22/2006 11:09:33 AM EDT

Originally Posted By AcidGambit:
Actually it's smarter to take the lump sum, if you invest it.



Not necessarily.

You need some time and learning to figure out how to handle money. You aren't just born knowing how. With a steady 2.25 million dollar per year income, they could really make some serious investment headway, under the right circumstances they might even be able to earn 50% on their 45 million, leaving them with almost 70 million.

It is easier to make money once you have it.



I'll give any one here 10-1 odd that 7 out of 8 of these people are bankrupt, in a legal battle, flat broke, and/or worse off that they were before they won.



Legal battles are absolutely certain.

Since they have already demonstrated a complete lack of financial sense, bankruptcy isn't a bad bet either.
Link Posted: 2/22/2006 11:15:33 AM EDT

Originally Posted By John_Wayne777:

Originally Posted By njensen1:


A group of workers from a Lincoln meat processing plant are now
multi-millionaires. The group of eight workers came forward minutes ago to claim
the record 365 (m)-million-dollar powerball jackpot -- the biggest jackpot on
record for any lottery in the United States.

All eight work at a Conagra ham processing plant near the U-Stop convenience
store where they bought the winning ticket.

The winners are: 56-year-old Quang Dao (wang dow); 53-year-old David Gehle
(gay-lee); 26-year-old Alain Maboussou (a-lin mah-boo-so); 29-year-old Chasity
Rutjens (rut-jens); 30-year-old Robert Stewart; 47-year-old Michael Terpstra;
34-year-old Dung Tran (dong trahn); and 40-year-old Eric Zornes (zorns).

The winners chose a lump sum cash option, giving them more than 177 (m)
million dollars collectively, or 15-and-a-half (m) million dollars each after
taxes.




Just fu**ing great.
I sure hope all of there Imigrant Papers are in Order.
Im sure they will all buy a Toyota land Cruiser, a Ninja, And a "too fast to Furious" Honda Civic



Lets see. 365 million divided up 8 ways is 45.625 million dollars each.

For an average 50,000 dollar a year payout per million every year, they would receive roughly 2.25 million dollars per year for a 20 year payout.

Instead, they chose to sacrifice THIRTY MILLION DOLLARS UP FRONT for a 15 million dollar immediate payout.

Even when they get rich, they don't get smart.

ETA -- With reasonable investments within 10 years they could turn the roughly 20 million they would receive into a significant ammount more and STILL be receiving their yearly 2.25 million dollar payouts.

Again, a pretty stupid move.

DUDE, IT'S 15.5 MILLION dollars. Chill, that's free money pretty much. I'd take a lump sum to. And if I ever spent that much in my lifetime, I'd kill myself.
Link Posted: 2/22/2006 11:20:40 AM EDT

Originally Posted By Dusty_C:
DUDE, IT'S 15.5 MILLION dollars. Chill, that's free money pretty much. I'd take a lump sum to. And if I ever spent that much in my lifetime, I'd kill myself.



Taking 15.5 million dollars of free money is pretty stupid when you could just as easily have over 45 million dollars of free money.

It is a simple math problem.

45,625,000 > 15,500,000
Link Posted: 2/22/2006 11:24:24 AM EDT
[Last Edit: 2/22/2006 11:25:57 AM EDT by Janus]

Originally Posted By John_Wayne777:
Lets see. 365 million divided up 8 ways is 45.625 million dollars each.

For an average 50,000 dollar a year payout per million every year, they would receive roughly 2.25 million dollars per year for a 20 year payout.

Instead, they chose to sacrifice THIRTY MILLION DOLLARS UP FRONT for a 15 million dollar immediate payout.

Even when they get rich, they don't get smart.

ETA -- With reasonable investments within 10 years they could turn the roughly 20 million they would receive into a significant ammount more and STILL be receiving their yearly 2.25 million dollar payouts.

Again, a pretty stupid move.




Your figures are all wrong.
If they took the yearly payout option (It's over 30 years) they would only be getting ~ $0.75 Mil/year after taxes.
Link Posted: 2/22/2006 11:31:49 AM EDT

Originally Posted By Janus:

Originally Posted By John_Wayne777:
Lets see. 365 million divided up 8 ways is 45.625 million dollars each.

For an average 50,000 dollar a year payout per million every year, they would receive roughly 2.25 million dollars per year for a 20 year payout.

Instead, they chose to sacrifice THIRTY MILLION DOLLARS UP FRONT for a 15 million dollar immediate payout.

Even when they get rich, they don't get smart.

ETA -- With reasonable investments within 10 years they could turn the roughly 20 million they would receive into a significant ammount more and STILL be receiving their yearly 2.25 million dollar payouts.

Again, a pretty stupid move.




Your figures are all wrong.
If they took the yearly payout option (It's over 30 years) they would only be getting ~ $0.75 Mil/year after taxes.



Not only that, but taking a 30 year payout is a risky scenario in terms of "unknowns"

The democrats could come back to power and enact a 98% tax on payouts of gaming winnings, for example. Again, sometimes its better to go with the devil you know.
Link Posted: 2/22/2006 11:35:41 AM EDT

Originally Posted By njensen1:


A group of workers from a Lincoln meat processing plant are now
multi-millionaires. The group of eight workers came forward minutes ago to claim
the record 365 (m)-million-dollar powerball jackpot -- the biggest jackpot on
record for any lottery in the United States.

All eight work at a Conagra ham processing plant near the U-Stop convenience
store where they bought the winning ticket.

The winners are: 56-year-old Quang Dao (wang dow); 53-year-old David Gehle
(gay-lee); 26-year-old Alain Maboussou (a-lin mah-boo-so); 29-year-old Chasity
Rutjens (rut-jens); 30-year-old Robert Stewart; 47-year-old Michael Terpstra;
34-year-old Dung Tran (dong trahn); and 40-year-old Eric Zornes (zorns).

The winners chose a lump sum cash option, giving them more than 177 (m)
million dollars collectively, or 15-and-a-half (m) million dollars each after
taxes.




Just fu**ing great.



Why is there a pronounciation guide for each of their names?

(Em-Ceee-kneeel-senn)

I think it's pronounced: Rich Mother-fvckers!
Link Posted: 2/22/2006 11:39:49 AM EDT
And if one died tomorow, i am willing to bet that the payments would cease and his family would have nothing.
Link Posted: 2/22/2006 11:45:41 AM EDT

Lets see. 365 million divided up 8 ways is 45.625 million dollars each.

For an average 50,000 dollar a year payout per million every year, they would receive roughly 2.25 million dollars per year for a 20 year payout.

Instead, they chose to sacrifice THIRTY MILLION DOLLARS UP FRONT for a 15 million dollar immediate payout.

Even when they get rich, they don't get smart.

ETA -- With reasonable investments within 10 years they could turn the roughly 20 million they would receive into a significant ammount more and STILL be receiving their yearly 2.25 million dollar payouts.

Again, a pretty stupid move.



Actually it's not a stupid move. It's a slightly conservative & eminently fiscally prudent move. Tell me how many of those people are guaranteed to live 20 years to collect their $2.25 mill per year. The annuity only pays out a lump sum, like they took, or a fixed amount per year for 20 years or UNTIL THAT PERSON DIES.

Suppose that one of the people takes their $2.25 mill, buys a new house, several new cars, buys that farm/vacation home that they always wanted, goes on a few cool expensive vacations & is left with a few bucks to tide them over till the next payment. Then that person comes home & gets run over buy a bus. How could you say that you took the best care of your family that you could? You could be a hardass & say "WTF do I care? I'm dead anyhow" but how could you say that you took the best care that you could of your family?
Link Posted: 2/22/2006 11:47:35 AM EDT

Originally Posted By HarrySacz:
And if one died tomorow, i am willing to bet that the payments would cease and his family would have nothing.





WHAT HAPPENS TO AN ANNUITY PRIZE IF THE WINNER DIES?

A lottery prize is just like any other asset. You can pass any remaining annuity payments on to your heirs or to anyone else. The Powerball game will even cash out an annuity prize for an estate. This may make it easier for the estate to distribute the prize. It also may be necessary to cash out the annuity to pay Federal estate taxes.
Link Posted: 2/22/2006 11:49:43 AM EDT
It's not so much of a cut and dry decision. It all depends on what you think you can do investing (or having an investor do it for you).

You can either take $15 million now (after taxes) or in reality take about $1 million per year for 30 years (again after taxes assuming the current tax rate of 35%). This is calculated by taking the $365 mil, divide by 8 members of the group ($45 mil each), times 0.65 for taxes ($30 mil each), then divide by the 30 year payout ($1 mil per year).

A $15 mil investment now can add up to a lot more than the $1 mil per year if done right. The guy that handles our funds can reasonably be expected to earn about 10% per year on average (as high as 27% and as low as a 4% loss). If I take the initial $15 mil and plug in 10% per year, then it comes out to around $260 mil. If I take the annuity and keep investing with him, and calculate on the same 10% per year, then it comes out to about $164 mil.

This, of course, is all dependent on whether or not he can maintain the investment numbers. If he doesn't perform well, then you're better off with the annuity. If performs really well, then you're much better off with the lump sum.
Link Posted: 2/22/2006 11:53:47 AM EDT

Originally Posted By John_Wayne777:

Originally Posted By Dusty_C:
DUDE, IT'S 15.5 MILLION dollars. Chill, that's free money pretty much. I'd take a lump sum to. And if I ever spent that much in my lifetime, I'd kill myself.



Taking 15.5 million dollars of free money is pretty stupid when you could just as easily have over 45 million dollars of free money.

It is a simple math problem.

45,625,000 > 15,500,000




The force of interest is not strong with this one.

Link Posted: 2/22/2006 11:54:40 AM EDT

Originally Posted By John_Wayne777:

Originally Posted By Dusty_C:
DUDE, IT'S 15.5 MILLION dollars. Chill, that's free money pretty much. I'd take a lump sum to. And if I ever spent that much in my lifetime, I'd kill myself.



Taking 15.5 million dollars of free money is pretty stupid when you could just as easily have over 45 million dollars of free money.

It is a simple math problem.

45,625,000 > 15,500,000

Uh huh, and maybe not get it. 15 million is more than enough for me to have one hell of a killer life RIGHT NOW. Taking the payouts is a gamble IMHO. One if you died, not another penny would flow. TWO, The piddly amount you'd get each year in the payout would suck anyway, especially if SHTF and you only had 3/4 of a million to prepare with (most people would take the initial few payments and buy a HUGE house and a few nice cars first anyway) Gimme the 15 and I guarantee that in 20 years, I'm still living better than someone who took the payments.
Link Posted: 2/22/2006 12:09:00 PM EDT

Originally Posted By John_Wayne777:

Originally Posted By Dusty_C:
DUDE, IT'S 15.5 MILLION dollars. Chill, that's free money pretty much. I'd take a lump sum to. And if I ever spent that much in my lifetime, I'd kill myself.



Taking 15.5 million dollars of free money is pretty stupid when you could just as easily have over 45 million dollars of free money.

It is a simple math problem.

45,625,000 > 15,500,000



You dont know much about investing, do ya?

15,500,000 x 1.0XX (Whatever rate you choose for whatever level of risk) over 20 years will produce more money then the 45,625,000.

You're also not accounting for inflation.
Link Posted: 2/22/2006 12:46:41 PM EDT
You guys seem to be pretty mixed up.


For one, the yearly payout is over 30 years(changed last year).

Next, it does not matter which you pick as far as the Powerball people care. If you take the lump sum, they deduct the amount of money they would otherwise get from investing YOUR MONEY over the 30 year period.

If you take a yearly paycheck, YOU LOSE. This is because you could otherwise invest the money, but instead, Powerball invest it, and they keep the money earned off it.

Link Posted: 2/22/2006 12:50:29 PM EDT
[Last Edit: 2/22/2006 12:52:54 PM EDT by mtechgunman]

Originally Posted By John_Wayne777:

Again, a pretty stupid move.


Nah i would much rather take the lump sum, and make the money work for me, than take payments

make the money work for you, don't blow it, and you will be golden.

edited
Link Posted: 2/22/2006 12:57:50 PM EDT

Originally Posted By John_Wayne777:

Originally Posted By SIG-24-7:
Just heard on the news where each winner will receive 15 million each in a lump sum payout. Good for them.



No, STUPID for them, as they would get 16 million dollars in just 8 years rather than taking 15 million up front. If they had taken the normal payout, each of them would have had over 45 million in the next 20 years instead of 15 million right now.

They gave well over half of their money away TO THE LOTTERY PEOPLE.

That, my friends, was f*cking stupid.



You know what they say to do if you win the lottery? I'mtalking about the people who are financial advisors and deal with this kind of thing?

ALWAYS TAKE THE LUMP SUM!

You are better off getting all the money up front and investing wisely than getting it dripped out over twenty years, losing money to inflation, and risking that you might be under a democractic administration that jacks up the tax rate to 50%.

Take the lump sum, invest wisely, and you will be much better off than the ones who take the 20 year payout.
Link Posted: 2/22/2006 1:06:08 PM EDT
No, they gave up $15 mil up front - at least thats the way it works for most lottos.

You win $45 mil.
You sacrifice about 1/3 for the immediate payout $45-$15mil = $30mil.
You have to pay about 50% taxes (which you would still get stuck with even with a yearly payout) = $15 mil.
Link Posted: 2/22/2006 1:18:03 PM EDT

Originally Posted By John_Wayne777:

Originally Posted By AcidGambit:
Actually it's smarter to take the lump sum, if you invest it.



Not necessarily.

You need some time and learning to figure out how to handle money. You aren't just born knowing how. With a steady 2.25 million dollar per year income, they could really make some serious investment headway, under the right circumstances they might even be able to earn 50% on their 45 million, leaving them with almost 70 million.

It is easier to make money once you have it.



I'll give any one here 10-1 odd that 7 out of 8 of these people are bankrupt, in a legal battle, flat broke, and/or worse off that they were before they won.



Legal battles are absolutely certain.

Since they have already demonstrated a complete lack of financial sense, bankruptcy isn't a bad bet either.



How do you figure that if they take it in yearly payments that they would get the entire 45 mil? That yearly payout is still gonna be taxed heavily and they won't get the entire amount.
Link Posted: 2/22/2006 1:26:04 PM EDT
[Last Edit: 2/22/2006 1:29:51 PM EDT by happycynic]

Originally Posted By John_Wayne777:

Originally Posted By Dusty_C:
DUDE, IT'S 15.5 MILLION dollars. Chill, that's free money pretty much. I'd take a lump sum to. And if I ever spent that much in my lifetime, I'd kill myself.



Taking 15.5 million dollars of free money is pretty stupid when you could just as easily have over 45 million dollars of free money.

It is a simple math problem.

45,625,000 > 15,500,000



I played with the numbers a bit. If they took 5 million to play with, and invested the other 10 million in something with a return of 5% (very conservative), compounded annually, they would have $43,219,432 at the end of the 30 years.

If they were good investors, and made 10% (which one could do with good financial advice in the stock market and a little luck) a 10 million initial investment would become $174,494,022 in 30 years.

10 million for toys, 5 million investment, 5% return = $21,609,711 after 30 years.

10 million for toys, 5 million investment, 10% return = $87,247,011 after 30 years.

As for investment advice, its simple. If you don't know anything CALL CHARLES SCHWAB, or Merrill, or any of the other big-name investment companies.

Taking the payout is like investing in the lotto company. There are much better investments out there. Find someone who will lead you to them.

Edited to add: 30 years is an eternity with compound interest. Even small sums turn into huge numbers once they've been compounding that long. Compound interest is a exponential function, so think of how that graph works. That's why Fry was a multi-billionaire in Futurama from a 4 cent investment compounded over hundreds of years.
Link Posted: 2/22/2006 1:29:44 PM EDT

Originally Posted By happycynic:

Originally Posted By John_Wayne777:

Originally Posted By Dusty_C:
DUDE, IT'S 15.5 MILLION dollars. Chill, that's free money pretty much. I'd take a lump sum to. And if I ever spent that much in my lifetime, I'd kill myself.



Taking 15.5 million dollars of free money is pretty stupid when you could just as easily have over 45 million dollars of free money.

It is a simple math problem.

45,625,000 > 15,500,000



I played with the numbers a bit. If they took 5 million to play with, and invested the other 10 million in something with a return of 5% (very conservative), compounded annually, they would have $43,219,432 at the end of the 30 years.

If they were good investors, and made 10% (which one could do with good financial advice in the stock market and a little luck) a 10 million initial investment would become $174,494,022 in 30 years.

5 million investment, 5% return = $21,609,711 after 30 years.

5 million investment, 10% return = $87,247,011 after 30 years.

As for investment advice, its simple. If you don't know anything CALL CHARLES SCHWAB, or Merrill, or any of the other big-name investment companies.

Taking the payout is like investing in the lotto company. There are much better investments out there. Find someone who will lead you to them.

Edited to add: 30 years is an eternity with compound interest. Even small somes turn into huge numbers once they've been compounding that long. Compound interest is a exponential function, so think of how that graph works. That's why Fry was a multi-billionaire in Futurama from a 4 cent investment compounded over hundreds of years.


I agree. Invest it and live off the interest.
Link Posted: 2/22/2006 1:34:43 PM EDT
[Last Edit: 2/22/2006 1:38:30 PM EDT by lordtrader]
Link Posted: 2/22/2006 1:36:32 PM EDT
Link Posted: 2/22/2006 1:46:02 PM EDT
Not a lot of Finance 101 types here...

In (fairly) layman's terms: en.wikipedia.org/wiki/Time_value_of_money

Link Posted: 2/22/2006 1:49:45 PM EDT

Originally Posted By Red_Beard:

Originally Posted By John_Wayne777:

Originally Posted By Dusty_C:
DUDE, IT'S 15.5 MILLION dollars. Chill, that's free money pretty much. I'd take a lump sum to. And if I ever spent that much in my lifetime, I'd kill myself.



Taking 15.5 million dollars of free money is pretty stupid when you could just as easily have over 45 million dollars of free money.

It is a simple math problem.

45,625,000 > 15,500,000




The force of interest is not strong with this one.








Time value of money!
Link Posted: 2/22/2006 2:34:29 PM EDT
[Last Edit: 2/22/2006 2:38:41 PM EDT by AcidGambit]
Lump sum+Lawyer+Financial Advisor= Good chance of being a happy lotto winner.

I'd move to fucking pango bango or some far off place for a year, let things cool down.
Link Posted: 2/22/2006 2:59:52 PM EDT
It's simple.

1. You take the payouts over 30 years or whatever.

2. You borrow against sed payouts at fixed rates. You use your 1,000,000 a year for debt service.

3. You invest the borrowed money in real estate or whatever just so you beat the 5-6% interest on the debt.

4. Live off the juice.

5. Write off any interest and expenses you can, pay very little in the way of taxes by changing whatever your doing into some biz or non profit.

With 1m govt guaranteed cash flow you can do a lot of shit and end up with a money machine. Much better then a comparatively weak and less secure return on 15 mill cash.
Link Posted: 2/22/2006 3:04:26 PM EDT

Originally Posted By Gunplay:
It's simple.

1. You take the payouts over 30 years or whatever.

2. You borrow against sed payouts at fixed rates. You use your 1,000,000 a year for debt service.

3. You invest the borrowed money in real estate or whatever just so you beat the 5-6% interest on the debt.

4. Live off the juice.

5. Write off any interest and expenses you can, pay very little in the way of taxes by changing whatever your doing into some biz or non profit.

With 1m govt guaranteed cash flow you can do a lot of shit and end up with a money machine. Much better then a comparatively weak and less secure return on 15 mill cash.



er...no

First, as stated, inflation decrease the value of your payouts over the years.
Second, you could be screwed in 10 years when president hillary raises the tax rate to 60%.

Always take the lump sum from the lotto. Always.
Link Posted: 2/22/2006 3:07:38 PM EDT
[Last Edit: 2/22/2006 3:14:02 PM EDT by lordtrader]
Link Posted: 2/22/2006 3:13:17 PM EDT

Originally Posted By bastiat:

Originally Posted By Gunplay:
It's simple.

1. You take the payouts over 30 years or whatever.

2. You borrow against sed payouts at fixed rates. You use your 1,000,000 a year for debt service.

3. You invest the borrowed money in real estate or whatever just so you beat the 5-6% interest on the debt.

4. Live off the juice.

5. Write off any interest and expenses you can, pay very little in the way of taxes by changing whatever your doing into some biz or non profit.

With 1m govt guaranteed cash flow you can do a lot of shit and end up with a money machine. Much better then a comparatively weak and less secure return on 15 mill cash.



er...no

First, as stated, inflation decrease the value of your payouts over the years.
Second, you could be screwed in 10 years when president hillary raises the tax rate to 60%.

Always take the lump sum from the lotto. Always.



Agreed...

Id take the 15.. 2mil invested in IRAs and such, 5mil is gold, 5mil invested in something to get an annual return, the rest to build my dream cabin on a few hundred acres and anything else I want.
Link Posted: 2/22/2006 3:54:11 PM EDT

Originally Posted By bastiat:

Originally Posted By Gunplay:
It's simple.

1. You take the payouts over 30 years or whatever.

2. You borrow against sed payouts at fixed rates. You use your 1,000,000 a year for debt service.

3. You invest the borrowed money in real estate or whatever just so you beat the 5-6% interest on the debt.

4. Live off the juice.

5. Write off any interest and expenses you can, pay very little in the way of taxes by changing whatever your doing into some biz or non profit.

With 1m govt guaranteed cash flow you can do a lot of shit and end up with a money machine. Much better then a comparatively weak and less secure return on 15 mill cash.



er...no

First, as stated, inflation decrease the value of your payouts over the years.
Second, you could be screwed in 10 years when president hillary raises the tax rate to 60%.

Always take the lump sum from the lotto. Always.



The inflation rate in moot because the money is invested and the payouts are just for service of fixed debt.

And Hillary could do a lot of things, but I'm not making my financial decisions based on it.

I think it comes down to what you’re happy with. I would want to leverage the situation far beyond a sweet house, cars and such. To each their own, 15 mill cash is just fine for most.
Link Posted: 2/22/2006 4:02:45 PM EDT

Originally Posted By lordtrader:

Originally Posted By Gunplay:


With 1m govt guaranteed cash flow you can do a lot of shit and end up with a money machine. Much better then a comparatively weak and less secure return on 15 mill cash.



Hate to bust your bubble dude. But LOTTO is not a GOVT guaranteed cash flow.

It is a state sponsored pool run by a private company ie POWERBALL. They take the money from people playing it. Invest it in a fixed rate annuity that is annuitized for 26yrs if you go that route. If not they just hand you the cash. Since it is state sponsored, not GUARANTEED, hell states don't even guarantee their own bonds and have to get em insured to get a good rating. If they go tits up 10yrs down the road, they will give you whatever is left in the kitty and you are shit outta luck.

So lordtrader, how do you know this???

I worked for one of the investment firm that handled the CA state lottery!!



I did not know that, I though it was a state thing.

Anyway my theory stands, and a fixed annuity sounds fine for my cash flow. Plus I’m more then willing to believe that the lottery will stay solvent for at least my lifetime.
Link Posted: 2/22/2006 4:31:28 PM EDT

Originally Posted By Gunplay:

Originally Posted By lordtrader:

Originally Posted By Gunplay:


With 1m govt guaranteed cash flow you can do a lot of shit and end up with a money machine. Much better then a comparatively weak and less secure return on 15 mill cash.



Hate to bust your bubble dude. But LOTTO is not a GOVT guaranteed cash flow.

It is a state sponsored pool run by a private company ie POWERBALL. They take the money from people playing it. Invest it in a fixed rate annuity that is annuitized for 26yrs if you go that route. If not they just hand you the cash. Since it is state sponsored, not GUARANTEED, hell states don't even guarantee their own bonds and have to get em insured to get a good rating. If they go tits up 10yrs down the road, they will give you whatever is left in the kitty and you are shit outta luck.

So lordtrader, how do you know this???

I worked for one of the investment firm that handled the CA state lottery!!



I did not know that, I though it was a state thing.

Anyway my theory stands, and a fixed annuity sounds fine for my cash flow. Plus I’m more then willing to believe that the lottery will stay solvent for at least my lifetime.





[Steve Miller Band]Go on, take the money and run![/Steve Miller Band]

$15 M after taxes, free & clear. At a minimum you can get 5% on that forever - that means that your principal basis doubles every 14.4 years! You are not locked into lottery gravy train for the rest of your life. Now you have freedom to do as you please w/ your $.
Link Posted: 2/22/2006 4:40:27 PM EDT
[Last Edit: 2/22/2006 4:43:58 PM EDT by Drakich]

Originally Posted By John_Wayne777:
Lets see. 365 million divided up 8 ways is 45.625 million dollars each.

For an average 50,000 dollar a year payout per million every year, they would receive roughly 2.25 million dollars per year for a 20 year payout.

Instead, they chose to sacrifice THIRTY MILLION DOLLARS UP FRONT for a 15 million dollar immediate payout.



Um, the only one showing dubious financial judgement is you.

To turn $15 mil into $45 mil in 20 years, you need a 6% annual yield. 10-year treasury bills are paying 4.59% right now. About as low risk as you can get.

If you want to be a little riskier, you could invest your money in tax-free municipal bonds. Even with lower yields, once the tax free aspect is taken into account, you can do a lot better than that 6% after taxes are factored in, or your $2.25 mil a year that you are advocating for our lottery winners.

Taking the cash option is a no-brainer.

Edited to add, since someone indicated the payout is over 30 years, 10-year T-bills gives you $55 million after 30 years, so it's even more lopsided for the cash payout.
Link Posted: 2/22/2006 6:36:02 PM EDT
[Last Edit: 2/22/2006 6:51:01 PM EDT by lordtrader]
Link Posted: 2/22/2006 7:08:35 PM EDT
i'm glad (hopeful) that none of you are financial advisors
Link Posted: 2/22/2006 7:13:31 PM EDT

Originally Posted By NotoriousSEG:
i'm glad (hopeful) that none of you are financial advisors



Why? Most of the people in this thread are suggesting the right course of action (lump sum up front).

Link Posted: 2/22/2006 7:15:27 PM EDT

Originally Posted By SIG-24-7:

I'll take that bet. Don'r forget, these are Nebraskans. Not a bunch of New Yorkers.



they had um on the news looked like one of those sets of HOMIES action figures

BTW you all know Warren Buffet is from Nebraska right?
Link Posted: 2/22/2006 7:21:52 PM EDT
No one knows what the future holds. You could drop dead, auto accident or be attacked by zombies.
Lump sum for me thanks.
Link Posted: 2/22/2006 7:53:54 PM EDT
[Last Edit: 2/22/2006 7:56:47 PM EDT by lordtrader]
Link Posted: 2/22/2006 8:06:20 PM EDT
Actually J_W777 is mixing pre and post tax figures.

The split would have been $45 million per person if annuitized (yearly payouts--I think LT is right, they changed to 26 years).

Or $22 Million (NOT $15m) PRE-TAX for each of them.

When I bought a ticket (hey, I'm a sucker, too). I figure to get 1/3 of the total announced Jackpot as a lump sum.....Basically for a $30m jackpot--you get a $15m Lump Sum minus roughly 1/3 for taxes.

And, as several have pointed out....at a relatively moderate rate of return, that $15m grows pretty quickly.

I think I read somewhere that before you even say you won the lottery, you should hire three people...A good Accountant/Tax Specialist, a Civil Attorney, and a Financial Advisor.

AFARR
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