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September 16, 2010

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That's what i think is so funny about all these lottery winners, show winners, etc. They supposedly win all this money, but they never tell you, that it's like half as much after taxes.

Did I mention I'm giving away a $500,000* prize on my website? Yep! That's right!!! Everyone come on over and check it out!

I agree with you, FMF, Jackie should have won. She's simply amazing!


*Fine Print: To be paid as a financial annuity over 50,000 years at 0% interest. Alternative prize is $285.71 in one lump sum.

@ Paul Williams - I'll still sign up! I wont say no to 285.71! LOL

I think the shows better purpose is to highlight these people who are trying to make a career out of their "talent" and hopefully the right people will notice and sign them.

I don't personally watch the show - but I can see how it would be a fun one for families to watch together.

Yeah, that sounds just a like lottery winning.

More often than not, I also why I advocate annuities... not so much because they give the superior returns in all cases, but mostly because if winners are so misinformed about their winnings, then perhaps it's best that they get it piecemeal at a time. That way, the money will be protected from the biggest investment risk of all: The investors themselves. :D

I wonder why they can't just pony up a million dollars? Oh wait, this is their way of 'cheaping out'. At least I think it is cheap.

I agree with you. The real money is in the profits they will make from recording deals and such, if the handle their career right.

Wow, that information about the lottery is pretty sobering. Knowing that, i'll probably test my luck even less (than the once every four months or so that I do now)

Eugene:

Your idea about annuities may look good on paper, but it doesn't work in practice. When you've got a guaranteed $250k / year for the next 20 years, it's easy to spend it all, especially when everyone on the planet knows you won $5 million in the lottery.

Once it is known that you won, if you take the annuity, you will be hounded for the duration of the annuity by the several companies who offer to buy structured settlements for CASH NOW. There's a book written by a guy who was a top gun for the firms who did that back when the industry was taking off called Money For Nothing. Anyone who wins the lottery should read it. The guy's a salesman, not a writer, so the book is a little rough, but the stories manage to be both hilarious and tragic at the same time, and most of the people he 'helps' need his cash because they've overspent, and of course they end up broke anyway.

The author says that if his mother won the lottery, he would recommend that she take the lump sum to avoid harrassment by sharks like him.

You guys should move to a good country where winnings aren't taxed.

I remember as a kid hearing about some man who won $5 million from the NY state lottery, and at the time it was a big story because it was some sort of record. I remember thinking about how rich he must be with that much money. Nowadays even a $5 million prize doesn't feel like "life changing" money.

It's really upsetting how adorable Jackie lose the title but i may say she's very promising and many projects would surely come her way.

Now about the prize deduction thing - taxation 101...i agree to most of what they say...really misleading but its better to have such amount in one night than nothing.

Matt, if you are saying that annuities is not a fool-proof protection against 3rd party harassment, then I completely agree with you.

But if we are talking about 3rd party risks, you will still face that kind of harassment with lump sums, except from different parties such as families, charities, scammers, kidnappers.

In short, you will have 3rd party risks regardless of what you choose. The truth is, this problem is beyond simply choosing lump sum or annuity, but rather is a question of how one manages large windfalls. Here, we may need to talk more about incorporations and blind trusts.

That said, while protection against the 3rd party is a perfect valid concern, my original point is protection against the 1st party, and there, I think annuities are still a very viable option.

Of course, all this is hypothetical, since I understand that not all lotteries offer the option of lump sum to begin with, and even if they did, not all annuities are created equal.

@Eugene Krabs
Off topic completely:

I've been meaning to ask as the reference comes up(recently in that long thread between you and Rob Bennett) Which cartoon character is Eugene Krabs?

Is it a current one cause I know the old ones?

Thanks

BillV --

It is current. The owner of SpongeBob Squarepants' employer, the Krusty Krab, is Mr. Eugene Krabs.

I was hoping for michael grimm, tho they are all vegas worthy performers.

Thanks FMF.

By the way, that whole thread I mentioned above was, well, interesting. unlike I ever have seen here. by the end, I had to go back and re-read it cause I got lost. Fascinating though.

Yeah, he usually goes by "Mr. Krabs", but that name is commonly taken online. So, I use first name Eugene instead. Besides, I prefer not to have people calling me "Mr." as it makes me feel old. :D

Now I have to watch at least one episode. dang!
lol

It is discouraging that a windfall like that could yield so little, but 300k+ is still a great deal of money. I think most people would be glad to get anything close to that, although I believe the performer deserves substantially more for winning such a high-profile contest.

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