Lottery strategy or madness?
March 28, 2012 10:13 PM Subscribe
The current Mega Millions is valued at $500,000,000. I have (I think) a logical idea for the best way to maximize the "payment" option of the payout. More inside.....
posted by lattiboy to Work & Money (31 answers total) 2 users marked this as a favorite
You want a big pile of money, not 20 big-ish piles of money over 20 years.
I have a novel idea:
Instead of taking the 40% reduction for "lump sum", couldn't you get a very, very low interest (or flat-fee) loan from a large investment bank if you signed an agreement to have all payments made to them over the 20 year period?
As an example, I win the money, I take the payment option, I then sign a contract of some sort to have all payments diverted to the bank, and then the bank gives me $470,000,000. That's a six-percent return on a loan that is essentially guaranteed.
Also, wouldn't this be a better tax position than either the payment or lump sum?
My lady friend believes this is just silly and no bank in their right mind would take such a loan. Please settle this.....