this post was submitted on 29 Jul 2023
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I was with you till the last paragraph. The numbers are already there for you, so I don't know where 6 hundred million came from.
The $1.28 billion is if you take monthly payments over a term of twenty or thirty years.
Very few people do that.
Instead, they take an up front lump sum payment.
That up front payment is the amount the lottery commission would put into interest bearing bonds to pay out over time, getting to the $1.28 billion.
The lump sum payment is usually about half the amount you would receive if you took payments over time. If this doesn't make sense, it's a tangential discussion on the time value of money and its net present value.
I got six hundred million by cutting $1.2 billion in half since this is casual Internet discourse, and I consider very rough cocktail napkin math for illustrative purposes to be perfectly acceptable.
Damn I think I would take the monthly payments. I wouldn't complain about ~$3m a month for 30 years. Whatever problems you have that money would resolve would probably be resolved in the first month.
Yeah, it comes to a point when the prize is large enough that getting it in installments won’t make a difference vs getting a lump sum in terms of immediate need/gratification. $3M is an absurd amount for just 1 month.
I’m old enough that I’d probably not have to work again after receiving that first month’s payment. I definitely wouldn’t need to work after month 2 even with going on an annual holiday.
Taking the monthly payment also has another advantage. You can financially fuck up and you’ll be able to start again next month. Provided you don’t start borrowing money based on your future income you’ll be fine.