20-year-old lotto winner refused $1M in cash and chose $1,000/week for life.

I buy tickets for that drawing. At her age she definitely made the right choice in my opinion. There is no tax on lottery here, so that is a wash for both. If she makes it to 65, she will have collected 2.3 million one grand at a time.
It seems more sensible to me, once she establishes herself and perhaps gets a family started she would be able to receive tax credits by investing in rrsps (retirement plan) and tfsa( tax free savings account) for children’s education.
With the million at once you are a mark for many scumbags trying to get you to “invest” with them.
At 50 or 60 years old it makes sense to take a one time payment.

 

Ask some Publishers Clearing House winners. Their payments stopped after bankruptcy. Money they will never see.

 

At 20 y/o, unless she comes to an untimely death, I think she did alright.

Assuming she lives to 70, that's 50 years

52 x 1000 = 52000
52000 x 50 is 2.6m.

Of course you gotta consider taxes...

Even more if she lives longer...

 

I think I'd probably take the million cash out option but I'm almost 50. The $1,000 a week for life is a nice bonus but what's the purchasing power of a $1,000 going to be 30 or 40 years from now? She could immediately start out with a paid for house, vehicle and have a nice fat cushion in the bank while pursuing a career path and maxing out a 401K for the next 47 years would be a good path. At the end of the day it was her choice alone to make so what anyone else thinks doesn't matter.

 

I was thinking the same thing. I'm in my mid 50's so I obviously would take the lump sum pay out. Personally, I never believed in the slow drip because life is unexpected and I would want my my family set if I wasn't there. If you personally know how to invest your money and diversify your cash with trading etc. Then its best you control your own money oppose to the weekly allowance. Of course she is young and healthy so if she believes she might go crazy risking the money the slow drip might help her in the long run. In the 80's when my uncle gave me $100 for my birthday back then I was able to save half, and purchase a few things. Today, that same hundred is gone within a day on partical groceries for a few days.

 

Lump sum unless you’re an illiterate when it comes to investing.

1k a week if you’re irresponsible with money and fear being broke.

 

That is correct.


Pete