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

No taxes on that up where she won.



apologies, should’ve read farther before posting

 

Lotto Quebec is the government, they stand a reasonable chance of staying open to pay up

 

True, the only real issue here is inflation or possibly even hyperinflation.

 

If my math is correct, it'd take just over 19 years to get a million at $1,000 a week.



These are just hypothetical numbers I punched into a compound interest calculator:

Historically the S&P 500 has an annual 10% rate of return. A grand a week over 19 years invested straight into an S&P 500 fund at 10% shows you could potentially end up with nearly $3 million if you are not taxed on the contributions. Over 40 years you could end up with $27 million. Also bear in mind that the capital gains would likely be subject to income tax.

$1,000,000 put straight into the same fund above with same rate of return for the same 19 years could potentially end up being just over $6 million. Over 40 years it could be $45 million.


I think I would take the million up front based on what I see. Bearing in mind this is just what I came up with from an online calculator. I would say consult a professional before making a decision and not listen to some random dude on the internet lol.

 

I was trying to calculate how many lappies at the nudey bar a million dollars is!
I should probably take the thousand a week.

 

It’s not rocket science even the novice investor can understand 1k a week isn’t the smartest move.
While waiting 20 years to finally get the million they could have already doubled it.



A $1 million Series EE
Savings Bond purchased today would be worth $2 million in 20 years, as they are guaranteed to double in value over that period; for Series I bonds, the value depends on inflation rates, but they also aim to protect purchasing power, with some recent periods seeing significant growth, but EE bonds offer that definite doubling.

 

There’s ways to invest and still receive $1k per week or whatever your needs are.

 

Quick, rough math indicates putting $750K in an annuity would yield about the same guaranteed income, leaving $250k to put in a low risk, low performance index fund which will double in under 20 years.

Financially taking the lump sum is almost always better, outside of a few specific cases. Physiologically, an argument can be made that dripping the money will lead to better results - until you look at the real world results of people who took the annuity option. They go broke at the same rate, the major difference is what happens when they die. With the up front money, the heirs have a chance at seeing something.