$1 million a year for 25 years or $17 million single payment?

Question

Canadian Lottery choices, if I win the jackpot I have the folloing choices:

a $17 million dollar lump sum payment or $1 million a year annunity for the next 25 years.

The fine print says the lottery corp may hire out the annuity, and is not responsible if the 3rd party doesn't pay up.

I am 45 years old.

If I am lucky enough to win, which would be a better choice.

Answer 1

$17 million. Due to inflation, $1 million won't be worth as much in 25 years.

One of the quickest ways to loose your money is to put it into the stock market. Stock market only makes a lot of money for a few people. Most people only have limited success with it.

Answer 2

You should take $17 million since it takes a long time and you can use the money. If you pick a million a year you probably get less and there is a chance the 3rd party won't pay. When you get the million a year you would probably have to spend a lot of it on your needs.

Answer 3

Disregarding Taxes and other elements and just dealing with the money and interest...

If you take the 1m each year and invest 50%, the remaining amount will draw about 20k for the first year. At the end of 25 years on an average of about 4%, you will have 12.5m plus about another 10 mil in interest.

say... $25M

Inflation will have severly reduced the purchasing power of this, however.. If you estimate at only 3% for inflation, you money will only have a value in 'todays' cash of about $18 mil.

If you take the $17 mil, you are going to have to work hard to spend more then, say $5m in the first year, so that $12 m in the bank at the same 4% will net you nearly $500,000.

If you can live with an income of $500 (exactly what we proposed in the first scenario) you will end up at the end of 25 years with about the same amount of cash

BUT

Remember that $5m you blew the first year.. Did you buy a house? its worth a LOT more then.. isn't it?.

Get the idea???
.

Answer 4

At Age 45, take the 17 Million. You could invest it at 6% and get $1,020,000 per year forever. You would never touch the principal.

If a real estate developer, comes to call, you could pay $4 Million up front for $8 Million in a year and a half to two years. At this level of funds there are possibilities that most of us never think about. The above possibility would cause you to have a loss of $240,000 for each year up to two, before you see the $4 million profit. You would have had to cut back expenses to $960,000 for each year.

Answer 5

A million a year for 25 years. You would be 70 when the payments stop coming.

Answer 6

Take 17 lump sum- spend 7 up front and invest the other 10 mil- and at 10% return on investment you will still make 1 million a year!

Answer 7

Take the $17 million. Put it in the bank and live of the interest. You'll still have at least $17 million at the end of 25 years.

Answer 8

Take the lump sum and invest at least half. Then go and enjoy the other half by helping out those you care about and having the life of your dreams. I would also donate some to a few charities that have been helpful or could be helpful to you or your family.
Please as well send me one million so my family and I can live some of our dreams! So it starts - people hounding you for your money and you haven't even won yet! lol At least in Canada, the gov't doesn't take half in taxes, like the States

Answer 9

Times are different from what they were years ago. Nothing stays the same, that includes the global economy. Just because one Clinton made it work doesn't automatically mean that another Clinton will be able to do so easily. There's more to deal with now. Decisions need to be made considering the current situations and not just, "What would they have done back then".

Answer 10

Take the lump sum. You should be able to double your money in 25 years if you put it in treasury market at 4 percent.