Millionaire for life

[dcbogey]

$1 million a year for 25 years of a lump sum of $17mil. Which would you take?

[Bear669]

$1 million a year for 25 years of a lump sum of $17mil. Which would you take?

1) I doubt I will live 25 years

2) I can earn a hell of a lot more than $25 million if I start with the $25m today.:cool:

[Rigel7]

$1 million a year for 25 years of a lump sum of $17mil. Which would you take?

Depending on the prevailing interest rates, the current value of 1 million per year for 25 years would be anywhere between 10 to 17 million. You would yield better results by taking the 17 million and investing with a regular income of 1 million a year, you could get 35 - 57 million in the next twenty five years. It's simple math.

Then again, I could blow the 17 million in 3 years and be a popper at the end of it.

[dcbogey]

Agreed - I don't understand why anyone would take the long term payout.
I seem to remember reading that if you die your estate gets the residual value of the annuity. But if you can't make $8 mil in 25 years on the original $17 mil, you're a moron.

[keeferz]

lump sum of 17 mil equates to an interest rate of about 2.75%
You can earn 3.75 @ ING doubling your money in 19 years

[1HandInMyPocket]

lump sum for me as well. Currently, lottery winnings are not taxed. If that were to change in the future, depending if there some sort of grandfather-clause, then it may only be 1/2 a mill a year.

[Bear669]

Depending on the prevailing interest rates, the current value of 1 million per year for 25 years would be anywhere between 10 to 17 million. You would yield better results by taking the 17 million and investing with a regular income of 1 million a year, you could get 35 - 57 million in the next twenty five years. It's simple math.

Then again, I could blow the 17 million in 3 years and be a popper at the end of it.

pauper (Great old Canadian rock "The Paupers")

[basketcase]

...
Then again, I could blow the 17 million in 3 years and be a popper at the end of it.
17 million bucks worth of tequila poppers? Sounds like fun.

[drlove]

Take the 17 million dollar lump sum payment. While there is a downturn in the markets right now, over the long term, a good interest rate to expect is 8% per annum. If you use the rule of 72, this means your money will double every 9 years. So, 27 years from now, you will have approximately $136 million dollars!!! Rather astonishing, wouldn't you say??

[basketcase]

Assuming you have the patience to invest it all and not spend a cent. Even still....

[Perry Mason]

Yes... but remember that the $1million per year is not taxable, whereas the interest you earn on the $17million is... and you must file and pay yearly!

Perry

[CreoleKitten]

Me 2 ...I would Take the lump sum....What would I do with all that money....a vacation first...



Daniella Reynes

[abstinent]

i jus wanna win payday 675k....
much easier

[TheNiteHwk]

When I win I taking the lump sum. :)

[Paul Drake]

Yes... but remember that the $1million per year is not taxable, whereas the interest you earn on the $17million is... and you must file and pay yearly!

Perry

Yes, but remember, if you take the $17 mil up front, it's currently all tax free. If you take the 25 year pay out, you are trusting the Feds and the Province not to change the rules and make any future lotto payouts taxable. I don't think I need a lawyer's advice on that one.

Not to mention, each year the 1 mil payout is worth less and less in today's dollars; even assuming a modest 3% inflation rate, that last payout in today's dollars is worth a lot less.

Just my 2 cents.

[TheNiteHwk]

I agree but for different reason.

I am 53 yrs old. Don't like to be negitive... but doubt if I'm gonna make it to 78. So I for sure would take $17.mill payout now.

[this_guy]

Lump sum definitly.

Buy a few nice condos, rent them out.
Invest a significant portion, live off the interest.

Lets not forget to go to bathurst and front and pick up one of those nice italian bulls ;)

[Perry Mason]

Yes, but remember, if you take the $17 mil up front, it's currently all tax free. If you take the 25 year pay out, you are trusting the Feds and the Province not to change the rules and make any future lotto payouts taxable. I don't think I need a lawyer's advice on that one.
Tax laws cannot be enacted retroactively... and the politicos are not about to spoil a good thing for the governments by changing the rules on lotteries! What they make on lotteries vastly exceeds what they lose on taxes.

On the long term value of the money, it makes no difference. Both are the same: that 17 million also loses value, as does the interest you earn on it.

To make the lump sum a better deal, your return on investment, after income taxes, has to be greater than the discount rate for the lump sum.

Figure it out: calculate the present value of a 25 year guaranteed annuity of $1 million... depending on the rates of interest you use, $17 million up front may or may not be a better deal...

Perry

[goalie000]

I see these tickets advertised on the TV, how much are they?

[TheNiteHwk]

I see these tickets advertised on the TV, how much are they?

$5. $10. And $20. depending how many #'s you want.

[Kailani]

I will take 1 mill per yr...:)

[johnhenrygalt]

Tax laws cannot be enacted retroactively...


Yes they can, and they almost always are.

[sly001227]

Actually the interest on the lump sum payout works out to 3.25%. So if you think you can do better than that (post-tax, so think 6.5%), then take the $17M.

Honestly, even with a good time hobbying. Do you really need all that cash?

If you spend $200 every day hobbying, you'll end up spending $73,000 a year. 5% interest on $17M is $850,000. You'd need to spend $2,400 a day to just spend the interest! Ahh. Money doesn't buy happiness, but at least I could rent it...

[cancowboy2001]

errr who won?
According to the Western Canada Lottery Corporation, the winning ticket was sold in BC.
http://www.wclc.com/winning_numbers/MILLIONAIRE_LIFE_2008_winning_numbers.html