All of America is abuzz with the whole Powerball lottery pool, a record-breaking $1.5 billion jackpot
and I am loving the discussions on the hypothetical question of "If you won the lottery, would you take the lump sum payment, or the annuity?"This article
makes some interesting points on why the annuity is the better choice. Now, I have no background in finance, no friend or family who works in investments and money matters. And I believe in a debate with my brother, we agreed that the government was going to eat like 50% of lottery winnings in taxes so either way might as well get it over with and take the chunk of cash in one go.
We also decided that if we did
win a million dollars from the lottery, it would still
not be enough to pay for three kids' college tuition. This is calculating in living expenses, and going on the assumption that all three of us finish our undergraduate coursework, one goes on to graduate school and I myself make it into medical school.
But we're no longer talking about just a measley million dollars. This is over one BILLION. Minus taxes, of course.
What would you
do with that much money? I thought about it, and the concluding thought was that that much money is more trouble than it's worth. Yes, I would be able to pay for everyone's tuition, and buy a house for my mom, and my brothers, and... ...
yeah. I don't know what I'd do with that much money. I could invest in stuff, but since I don't know anything about investments, I might as well burn that money up seeing as it'll be lost anyways. I could store it in a bank, but the amount of tax I'd have to pay every year would be staggering. I could donate a large amount of money to a hospital and a medical school, wink wink nudge nudge, write me good letters of recommendation and send me an acceptance letter?
Funny thought, this. When I was a kid, I had all sorts of fanciful ideas on what I would spend my lottery winnings on. Ah, such is the innocent thoughts of children, carefree and without a care about adult matters.
---brought to you by Samantha and her random chain of thoughts whilst reviewing Organic Chemistry concepts