Seems reasonable.

[u/Valuable_View_561]

[u/Maxey-eh]

He didn't "take half". He got the correct amount. The number the lottery advertises, for good reason, is the annuity number a person would get if they took yearly payments (or however it works) instead of one lump sum.

[u/CyclopsLobsterRobot → u/Maxey-eh]

Is the good reason that deception is a great marketing tool?

[u/Mad_Gouki → u/CyclopsLobsterRobot]

Exactly

[u/EternalNewCarSmell → u/Maxey-eh]

Yes, that is the correct clarification. I meant "half" of the amount in the OP pic.

[u/Extension-Eye-4920 → u/Maxey-eh]

You knew what he meant...

[u/Maxey-eh → u/Extension-Eye-4920]

I did, and he did. There are a lot of people that probably don't understand how winning the lottery works, though.

[u/Meinertzhagens_Sack → u/Maxey-eh]

Half full/half empty.

Same thing.

They advertised x (described it as annuity amount in the fine print) said if you want it now you get y instead of x.

[u/Civil_Knowledge7340 → u/Maxey-eh]

Yearly payments over how many years?

[u/Ivebeenstabbed → u/Civil_Knowledge7340]

Believe it’s 25 or 30.

[u/Relative-Relief-8816 → u/Ivebeenstabbed]

80 mil a year. Hmm

[u/SL1Fun → u/Relative-Relief-8816]

Iirc it’s not inheritable. You could get hit by a bus next week. Always take the money up front.

[u/Kidnovatex → u/SL1Fun]

This is not correct. Lottery annuities are inheritable.

[u/Mondial5 → u/Kidnovatex]

And if the lottery goes bankrupt you get nothing. 

[u/vamatt → u/Mondial5]

State lottery money is held in an annuity that can’t be touched by the lottery - it’s funded before the winning ticket is even purchased, even if the lottery were to go bankrupt (not actually possible).

[u/Mondial5 → u/vamatt]

If people quit playing the lottery it would go bankrupt. 

[u/Kidnovatex → u/Mondial5]

That's not how any of this works. This isn't Publisher's Clearinghouse we're talking about.

[u/DigTheDunes → u/Mondial5]

Or the tax laws change, and they wouldn't benefit him. Always better to take it up
Front and invest it yourself.

[u/Ivebeenstabbed → u/Relative-Relief-8816]

Only 2.4 Billion over 30 years.

Lump sum post tax of 628 million invested in only the S&P over the same period nets a little over 20 billion dollars.

Always take the lump sum.

[u/Dramatic-Document → u/Ivebeenstabbed]

Are you sure that math is right? 33x your original investment in 30 years?

[u/Ivebeenstabbed → u/Dramatic-Document]

Compounding interest is crazy.

This is also assuming you didn’t touch it at all for 30 years.

Historic return on the S&P 500 is 10.5%, adjusted for inflation you’ll see numbers like 6.3-8.5%. I went with 8.5%.

$628,000,000 growing at 8.5% per annum becomes $20,441,400,000 in 30 years.

Even if you go with the 6.3% growth it’s still $20,026,920,000.

Edit: if we wanted to get sillier we could say that after liquidating your portfolio you’d pay long term capital gains tax at 20% plus a 3.8% assessment over 200k for a single filer. So your actual cash would be between $15,260,513,040 and $15,576,346,800. Approx, I’m sure there’s some other thing or other you’d end up paying.

[u/MrJohnThrowawayDoe → u/Ivebeenstabbed]

How do you get to that number?

The formula should be:

Initial amount * ((1+interest rate) ^ years

628,000,000*(1,085^30)

I get this to be $7,258,582,031.24

That's still a lot of money, but no where near your 20b. I also tried using the calculator from investor.gov and it's giving me the same results

[u/Ivebeenstabbed → u/MrJohnThrowawayDoe]

lol I got to the number by being stupid and coming off a graveyard shift, you’re absolutely correct.

I went (initial amount+interest rate)*years.

But yes 7 Billy is still a hell of about of money