Quote:
Originally posted by TheEnforcer@Dec 21 2004, 01:45 AM
Ask any economics professor which option they would choose if they won the lottery if they won 100 million (or whatever it is), the 45 million lump sum payment or the 100 million over 20 or 25 years depending on the lottery and practically down to the professor they will tell you that they will choose the lump sum. Why? It's really rather simple. That larger lump sum allows you to leverage your upfront money MUCH more so as to be able to make MUCH more through the years than were you to just take the 4 million a year. It allows you to make the MAXIMUM use of the buying power and leverage of your money right away. It's the same principle here except on a much shorter time scale.
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Fuck the economist. What would a psychologist say? Most people who go from rags to riches find that the lump sum just gives them a way to SPEND more money up front. They can't afford that kind of leverage.