I will admit, a billion dollar prize got my attention, and my friends and I have been buying tickets.
But why is the big prize so big? CNN has a theory – its the FED!
It actually makes sense. Keep in mind that no one takes the annuity payout; everyone wants the cash.
But it is that annuity payout that everyone focuses on. So why is it so big? 1.9 BILLION dollars is a lot of money…if you wait for it.
$1.9 billion top prize is the amount winners would get, which involves taking 30 equal payments of about $63 million spread out over the next 29 years. Those payments come from an annuity purchased by the lottery sponsors, and the payments factor in an average rate of return.
Interest rates are up, annuity rates are up, lottery payouts are up.
Ok, we get it. But no thanks like every other lottery winner I’ll take my prize in cash.
Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.