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06-06-2009, 02:23 AM
| | Registered User | | Join Date: Jun 2006 Location: Minnesota | | | what are the odds
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Me getting lucky like this guy or dating megan fox....hope he doesnt blow it all. http://news.yahoo.com/s/ap/us_rags_to_riches |
06-06-2009, 02:18 PM
| | Registered User | | Join Date: Dec 2004 Location: Melbourne, Aus | | "He will take home a lump sum of $88.5 million after taxes are deducted"
Jeeeze, he only actually gets one third??
Maybe his folks should sell some of their 320 acres if they're doing it tough 
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06-06-2009, 02:24 PM
|  | @Crawfication
Endorsing Artist: Gravity Picks | | Join Date: Feb 2008 Location: Ohio/West Virginia | | I agree. That sucks! Its a lot of cash, still, but only 1/3.. 
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06-06-2009, 03:16 PM
|  | Registered User | | Join Date: Nov 2007 Location: boston, ma | | | They deduct a lot more for doing the lump sum than the payment plan. If you do the installments for 20 years or whatever it is I think you end up walking away with a little over half to 2/3 of the money. Doing the lump sum you take a bigger hit up front plus end up paying more up front, but you have a bigger amount sitting in your bank account gaining interest. The down side of that is you also have to pay taxes on the interest. I remember hearing the analysis a few years ago when they had a similar situation, some woman won a solo jackpot of a boat load of millions and took the lump sum.
Honestly, unless they have some really big investment plans or are scared the lottery is going to be insolvent in a few years, I think I would have taken the payments. |
06-06-2009, 03:40 PM
| | Registered User | | Join Date: Jul 2008 Location: Lansing, MI | | | His neighbor, Dave Assman, is happy for him: "They've been real short on finances for a long time," Assman said. "They are from real meager means, I guess you'd say."
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06-06-2009, 04:06 PM
| | Registered User | | Join Date: May 2009 Location: I am where it takes me | | | good for him, his family sounds like it deserves a break. |
06-06-2009, 07:57 PM
|  | Registered User | | Join Date: Apr 2003 Location: Madison, NJ | | | Hope he doesn't lose it all, as young as he is.
For me, it'd be a house for me, pay off my parent's mortgage, new cars for them, me and my brother, and pretty much the rest in the bank.
I don't think I could EVER spend $88 million.
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06-06-2009, 08:08 PM
|  | Registered User | | Join Date: Dec 2003 Location: Charlotte, NC | | Quote:
Originally Posted by coreyfyfe  They deduct a lot more for doing the lump sum than the payment plan. If you do the installments for 20 years or whatever it is I think you end up walking away with a little over half to 2/3 of the money. Doing the lump sum you take a bigger hit up front plus end up paying more up front, but you have a bigger amount sitting in your bank account gaining interest. The down side of that is you also have to pay taxes on the interest. I remember hearing the analysis a few years ago when they had a similar situation, some woman won a solo jackpot of a boat load of millions and took the lump sum.
Honestly, unless they have some really big investment plans or are scared the lottery is going to be insolvent in a few years, I think I would have taken the payments. | Actually, you get the same amount either way. $233MM over 20 years is about the same as getting ~$125MM today, then subtract about 35-40% for taxes and your $233 million jackpot drops to $88 million.
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06-06-2009, 08:16 PM
|  | I'm a tumbler, born under punches | | Join Date: Aug 2006 Location: Northern California | | Quote:
Originally Posted by -Kramer- Actually, you get the same amount either way. $233MM over 20 years is about the same as getting ~$125MM today, then subtract about 35-40% for taxes and your $233 million jackpot drops to $88 million. | I'm sure it's just the net present value (NPV) of the prize, and then subjected to taxation.
The real danger of the lump sum payment would have been a few years ago because of the money that would have been lost in the market downturn. At this point it would be a wash again - assuming that there's some semblance of intelligence used in terms of handling the money.
Read an article a few years back about lottery winners. Apparently the large majority of them lose/fritter away their entire prize. Hard to fathom, but it appears to be the case. |
06-06-2009, 10:54 PM
| | Registered User | | Join Date: Jun 2008 Location: Ohio | | | You could almost buy a new, custom Alembic for that much!
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She said It's a bit pornographic. Then again, I don't suppose you would crash your ship for a nice girl in sensible shoes.
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06-06-2009, 11:04 PM
| | Registered User | | Join Date: Mar 2008 Location: Winnipeg,Siberia | | Quote:
Originally Posted by TheBigO I'm sure it's just the net present value (NPV) of the prize, and then subjected to taxation.
The real danger of the lump sum payment would have been a few years ago because of the money that would have been lost in the market downturn. At this point it would be a wash again - assuming that there's some semblance of intelligence used in terms of handling the money.
Read an article a few years back about lottery winners. Apparently the large majority of them lose/fritter away their entire prize. Hard to fathom, but it appears to be the case. | what's interesting are the folks you meet who inherit or win 50 or 60 grand and think that they can quit their jobs,buy new cars,toys,go to vegas,or go on extended benders and not be broke in six months
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06-06-2009, 11:17 PM
| | | | Assman is a heck of a name. |
06-06-2009, 11:26 PM
| | Banned | | Join Date: Jan 2004 Location: Detroit, michigan | | Quote:
Originally Posted by JohnnyPustular His neighbor, Dave Assman, is happy for him: "They've been real short on finances for a long time," Assman said. "They are from real meager means, I guess you'd say." | Hahahhaha, Assman. |
06-07-2009, 12:51 AM
| | Registered User | | Join Date: Feb 2008 Location: Madison, WI | | Quote:
Originally Posted by Jim Campbell what's interesting are the folks you meet who inherit or win 50 or 60 grand and think that they can quit their jobs,buy new cars,toys,go to vegas,or go on extended benders and not be broke in six months | Yeah, but that would be one helluva six months. |
06-07-2009, 01:03 AM
| | Registered User | | Join Date: May 2000 Location: Canberra, Australia | | | Good for him. I hope is uses it wisely.
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06-07-2009, 01:45 AM
| | Registered User | | Join Date: Oct 2008 Location: Rice Lake, WI | | Quote:
Originally Posted by tplyons Hope he doesn't lose it all, as young as he is.
For me, it'd be a house for me, pay off my parent's mortgage, new cars for them, me and my brother, and pretty much the rest in the bank.
I don't think I could EVER spend $88 million. | Ditto. Plus donate money to my high school's music and art program. Since, like any other school now, those programs are getting shafted.
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06-07-2009, 12:35 PM
|  | Moderator
Endorsing Artist: Levy's Leathers Moderator | | Join Date: Jan 2005 Location: Toronto/Niagara Falls, Ontario | | | They deducted 144 Million dollars?!?!!
What's the point of saying they win that much if they're gonna take it all back?! |
06-07-2009, 12:59 PM
| | I'm a tumbler, born under punches | | Join Date: Aug 2006 Location: Northern California | | Quote:
Originally Posted by Mark Wilson They deducted 144 Million dollars?!?!!
What's the point of saying they win that much if they're gonna take it all back?! | Yeah, I bet if he knew he was only going to get $88 million he wouldn't have spent the $15 on tickets. . .
They didn't "take it all back". They took out taxes and then gave him the present value of the remaining prize. In fact, if invested wisely, taking the lump sum means MORE money than the yearly installments.
I don't feel like doing the math but you can understand it this way. Ignoring taxes, if you won a lottery drawing for $1 million, what you are really winning are 20 annual payments that add up to $1million or $50,000 a year for 20 years. The value of $1million over 20 years is very different from the value of $1million today because the money on hand today can be invested and provide much larger returns.
The only thing to look at is the annuity rate. If it's low (say 4.5%) then taking the lump sum you should be able to earn better than that through investing. If it's high (I believe California's rate is nearly 9%) then take the annuities as I think you'd be hard pressed to find a way to invest and guarantee a 9% rate of return. But that's just an aside.
The point is, this guy had taxes taken out just as anyone would (and at that point you're getting taxed at the highest possibly percentage) but after that he got the full present value of the prize,. |
06-07-2009, 01:16 PM
| | Registered User | | Join Date: Nov 2005 Location: Listowel/KW Ontario | | Quote:
Originally Posted by TheBigO Yeah, I bet if he knew he was only going to get $88 million he wouldn't have spent the $15 on tickets. . .
They didn't "take it all back". They took out taxes and then gave him the present value of the remaining prize. In fact, if invested wisely, taking the lump sum means MORE money than the yearly installments.
I don't feel like doing the math but you can understand it this way. Ignoring taxes, if you won a lottery drawing for $1 million, what you are really winning are 20 annual payments that add up to $1million or $50,000 a year for 20 years. The value of $1million over 20 years is very different from the value of $1million today because the money on hand today can be invested and provide much larger returns.
The only thing to look at is the annuity rate. If it's low (say 4.5%) then taking the lump sum you should be able to earn better than that through investing. If it's high (I believe California's rate is nearly 9%) then take the annuities as I think you'd be hard pressed to find a way to invest and guarantee a 9% rate of return. But that's just an aside.
The point is, this guy had taxes taken out just as anyone would (and at that point you're getting taxed at the highest possibly percentage) but after that he got the full present value of the prize,. | In Canada you don't get taxed on lottery winnings. On the other hand, we have never had a jackpot that was 88 million.
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06-07-2009, 01:21 PM
| | Registered User | | Join Date: Jan 2008 Location: Norway | | Quote:
Originally Posted by JacoLesFlea | I'd rather date Megan Fox  | | Thread Tools | Search this Thread | | | | 
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