Lottery winners’ stories 2012
Whether they formulate the thought or not, lottery winners expect the prize to last for a lifetime and hope to never work a day. At a first glance it is not only possible but also very easy to achieve this goal, and all it takes is a little moderation and decently good money management. Having said this, there are cases of lottery players who lost it all, so it makes perfect sense for people to play in “lifetime lotteries” such as the one held by the Massachusetts state lottery.
Jamaica Plain woman became a lifetime lottery winner
Fredda Raimondi paid $20 for a lottery ticket, hoping that this time she will scoop a prize of $50,000 per year for a total of 20 years. It is enough to do the math to realize that the total amount was in excess of $1 million, and the annuity should allow her to live the good life. Although the amount is not sufficient to quit the job, having an additional $4000 per month guaranteed for the rest of your life is nevertheless refreshing. Very few lottery winners who receive a lump amount actually divided the money in equal shares to make sure that they never run out of money, so this kind of structure is welcomed.
What makes this case interesting, is the fact that despite bearing the name of “lifetime spectacular” and implying the fact that the money is paid over 20 years, the lottery game allows lump payments. This is exactly what Fredda Raimondi chose to do and as a result she received $650,000 after taxation. While the money is sufficient to pay for the vacation she intends to take and fuel up a retirement fund, this type of arrangement pretty much defeats the purpose of playing in a lifetime lottery.
Is the annuity preferred to lump amounts?
This question is frequently asked by lottery winners and the fact that the majority chooses to receive all the money at once, might suggest that this is the better option. Then again, having so much money so quickly sets many on the road to perdition and the cases of lottery winners going bankrupt are not few. The comfort of having a safety net always open and knowing that no matter how poor their financial decisions might be they will never run out of cash completely, should help them sleep better at night.
At least in theory lottery winners can achieve a great deal with all the money that is bestowed on them, but they must know what to do with it in the first place. Since the vast majority of winners doesn’t have financial training and are overwhelmed by the sheer amount of money, placing the cash in the bank is the best they can do. The opinions are diverse and a definitive answer is yet to be found.
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