In today's U.S. economy, would you pick CASH OPTION or 25 ANNUAL PAYMENTS when buying a lotto ticket?

Question

For someone that is under 30 and thinking of playing the lotto for the 1st time, but with the weak U.S. dollar sign and the economy that we are now in, what would be the best choice in what to pick when decided how to collect the jackpot: Cash Option or 25 Annual Payments?

I do thank you in advance to each and everyone of you in answering this (silly) question of mine. ;-)

Answer 1

Cash option. The user who answered before me is right.

I would put it 50% in silver and gold bullion

The other half in caompanies such as GE, Oil stocks (Exxon) (Shell) etc. Some GM. Fundamentals for the next 8-10 years are strongly bullish for commodity producers and the like.

Inflation will eat your annuity payments UP!

Cash will be protected and a profit if invested wisely at once.

Answer 2

The value of the US Dollar should not be a determination of whether to take cash or the annuity option.

The USD has fallen in value every year since 1967. As long as the US Gov has debt the USD will decrease in value over time.

To answer this question then really depends on your ability to manage money.

If you find that you are a spend thrift and unable to manage money well, you might be better off taking the annuity option. A lot of people are under the false assumption that making millions will cure them from any future financial woes.

Statistically speaking, lottery winners tend to go broke or bankrupt within 5-10 years of winning.

There are tons of reasons for this. Giving money to people over $11,000 (currently) is subject to IRS Gift Income Tax.

http://www.irs.gov/businesses/small/arti...

Since each person who you could give more than $11,000 to will undoubtedly not save a dime for taxes, will come to you and ask to pay their gift tax. Subsequently, paying tat gift tax in excess of the exempt amount will be subject to gift tax the following year. There is also state income tax to consider in most states.

There are much better ways to accomplish this legally, but that is where an expert comes in and consults for you.

There are also issues of law suits, angry relatives, and everyone you don’t know suddenly wants to be your best friend (aka wants some of your money). It's ok to help people, but you want to do it in the proper structures to reduce litigations risks, pay the fair legal amount of taxes and not a penny more, etc. I have helped people in this area and work with tax and legal experts who specialize in these kinds of situations.

You're also going to want to move to a tax friendly and anti-litigation state. You can still live where you want to (buy 2 homes), just need 6 months of the year living in the "tax friendly" state.

This can save up to 9% tax a year on the annuity option in some states.

Mostly you will need frivolous litigation protection. Your assets need to be protected from the bloodsucking attorneys who see someone with assets and will work on contingency to "shake you down" for money. If you don't think this goes on every day, just pick up any yellow pages and look at the front cover, inside cover and the number of attorneys seeking to sue for anything.



If you can manage money well, you are often better off taking the lump cash sum and investing it. Make sure you avoid any high risk scheme (common lotto winners are hit with), and stick to investment basics. I've helped 1000's of people in my career in this department.  

Good luck!

Answer 3

I would pick cash and then try to put it into gold and other investments as a hedge against inflation.  

Answer 4

cash - i can beat the rate of return on the lotto's annuity blindfolded.

Answer 5

any