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Originally Posted by bobatundi
The choice was $126MM in 26 annual installments, or $71.5MM lump sum. The lottery company is indeed indifferent as explained above. This is equivalent to about a 5.25% discount rate. So you have to figure, can I get a better return on my money over time than 5.25%. The S&P 500 has averaged 11.5% annual rate of return over the last 35 years--so, I daresay, yes. Is it riskier? Of course. Not suggesting you put all $71MM (call it $44MM after tax) in an index fund...but in theory you could and you'd be better off in the long run.
Additionally, you could party like a rock star now with the lump sum.
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Excellent. Thank you for filling in the numbers, I had no idea what they were.