The US Powerball jackpot - silly, silly amount.

Droolinggimp said:
BBC news article

So the US Power ball jackpot has climbed to $1.9 BILLION (£1.7 BILLION) after no one won it last week end.

$1.9 BILLION!!!!!!!

I mean, what would anyone actually do with that, minus the taxes of course. Still works out about $900 MILION....
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That prize figure is fake/marketing gimmick... even if you don't pay taxes on the prize (say if a Canadian wins it) the jackpot is more like 900 million before tax, people seem to frequently miss this and end up believing that taking the cash option = giving up/forfeiting some of the prize.

An American would take home even less than 900-ish million, more like 500-ish million after taxes... so rather a different amount to the 1.9 billion advertised!

el_dazza said:
Article says most people take the 'give it to me now' option, forfeiting over half of their winnings. That is just baffling to me. Over 60m a year for the next 29 years, or 900m if you take it now. Americans really aren't smart are they.
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Because they're not forfeiting half their winnings, money you can receive now is worth more than money you can receive in the future, you can also invest money now, which is all that's happening in the situation where you take the annuity, there isn't any jackpot actually lost or forfeited:

www.investopedia.com

Time Value of Money: What It Is and How It Works

The time value of money (TVM) is the concept that a sum of money has greater value now than it will in the future due to its earnings potential.
www.investopedia.com www.investopedia.com
 
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To put it simply for people who think that some part of the jackpot is being forfeited:

All they're doing is saying you can have X now (the actual prize), or we'll invest X for you in treasuries over multiple years giving you Y per year... and that gives a total of Z after like 20 or 30 years or whatever and therefore we're marketing the prize as being Z (because Z > X).

Grand prize of Z total (over several years) or take X as the cash option is still awarding the same jackpot, nothing is being forfeited.

You can just as well win X and invest it yourself or pay a financial advisor to do it for you, in fact with 900 million or 500 million you could have a couple of full-time investment professionals working directly for your own family office!
 
Chrisc said:
Yes..

www.lottery.co.uk

Lottery | Results, Information & News

The latest lottery results, news and information for UK National Lottery draws including Lotto, EuroMillions, Health Lottery, Thunderball and more.
www.lottery.co.uk www.lottery.co.uk
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Some of these are a bit iffy... like I did it for fun once with a previous big jackpot and special sign-up offer, one site claimed to buy tickets in a certain state but ended up buying them in a different one (one with state income taxes). Granted it's unlikely to be an issue but if you were to win a big prize you're then lumbered with a state tax bill even if being a UK resident means you don't pay federal taxes on the win.

On a 900 million win that could be a 90 million dollar loss you didn't need to have happen if the same numbers had been purchased by a different courier.
 
el_dazza said:
I guess if you're 60+ years old then yeah, you'd go for the lump sum, damn well enjoy it now. For someone a bit younger then the longer term is sensible..
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not when you take in to account inflation and lost opportunity of earnings. Even shoved a in a government bond yiu would earn a boat load of money on the lump sum
 
dowie said:
That prize figure is fake/marketing gimmick... even if you don't pay taxes on the prize (say if a Canadian wins it) the jackpot is more like 900 million before tax, people seem to frequently miss this and end up believing that taking the cash option = giving up/forfeiting some of the prize.

An American would take home even less than 900-ish million, more like 500-ish million after taxes... so rather a different amount to the 1.9 billion advertised!



Because they're not forfeiting half their winnings, money you can receive now is worth more than money you can receive in the future, you can also invest money now, which is all that's happening in the situation where you take the annuity, there isn't any jackpot actually lost or forfeited:

www.investopedia.com

Time Value of Money: What It Is and How It Works

The time value of money (TVM) is the concept that a sum of money has greater value now than it will in the future due to its earnings potential.
www.investopedia.com www.investopedia.com
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Phew, glad you cleared that up, I've been sat here pondering this exact situation for the last few minutes.
 
ttaskmaster said:
Buy a superyacht for $400million and spend the rest of it cruising around for a year or two?


Depends what inflation does to the value of your Dollar.
I think there was a thread on here about how the lump sums usually ended up being the better option as the annual trickle wound up being worth a lot less in terms of buying power?
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You could build yourself the Queen Mary 2 and still have £100m left over!
 
Dream mode engaged.

Well I know as the clocks turn back I would not be in the UK till the summer came around again that's for sure.

Nice flat in London,
Nice flat in Melbourne (oz)

Main abode would be in a ski resort somewhere, would need some significant research to decide if Europe/states or Canada.

Oh and good lawyer to keep all the ex Mrs SPG`s away :) :)
 
robfosters said:
You could build yourself the Queen Mary 2 and still have £100m left over!
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Yes, but it costs about 15-20% of the purchase price in annual running costs... plus you still need to fill it with fuel. Something like that would be about £2.5m to fill the tanks, and you'll get maybe 40 feet per gallon.
On top of that, you'll need crew, furnishings, food and all that other stuff. £100m doesn't go as far as it used to....
 
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