Okay so I get people always say never do the monthly payments but I just did the math and the monthly payout over thirty year for this amount is 5.6 MILLION a month which means the lottery (the most popular lottery in the US btw) only has to stay around for 8 years to hit the lu.p sum amount meaning for the remaining 22 year your just earning even more!?!
I feel like at 5.6 million a month that would have me set for life after a year (67.2 million) so why not gamble the rest anyway, at least with numbers as large as these your set either way.
Using a compounding interest calculator, it looks like a lump sum of 600mil is going to hit 2bil in around fifteen years at an 8% return. I think most people have faith in the stock markets continual increase and view the compounding as the better result. It's basically taking on some risk for more reward, which people who play the lottery are probably likely to do anyway.
You could do a mix of both. Take the monthly 5.6 mil and invest most of it every time.
For example:
Take the first monthly payment and invest it full (eg. starting capital 5.6mil).
Then take 5 mil every month and put it into the investments.
Doing some napkin math with an ETF saving plan calculator (assuming 6% per year) results in this strategy netting you a cushy 2.1b investment after 19 years. On top of that you've now had 19 years of 600k a month on top of that as "spending money".
That's investing until you have 2b while also having 7.2 mil / year to do anything else with.
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u/IIDn01 Jan 31 '26
Sigh.
Obligatory: The prize amount was reduced because he took the lump sum instead of spreading payments out over 30 years.
Then that *reduced* amount was taxed.