For the 6th time in Mega Millions lotto history, the jackpot reward deserves over $1 billion ahead of Tuesday night’s 11 p.m. ET draw.
If you match all 6 numbers on your ticket, you’ll have the option in between $1.1 billion paid as an annuity over 30 years or taking home a swelling amount payment of $5258 million, per usamega.com.
Most winners select the swelling amount alternative, although it’s less than half of the overall prize quantity.
That method, they get the most cash possible right after winning, instead of getting yearly payments. In this case, those payments would be approximately $23 million a year after federal taxes are subtracted. With the swelling amount payment, winners are in theory able to invest and begin growing the funds right now.
However, Mark Cuban, self-made billionaire and star of ABC’s “Shark Tank,” believes winners need to take the annuity rather. Here’s why.
Why Mark Cuban states prize winners need to take the annuity
Cuban recommends winners not to take the swelling amount, mostly since there are no warranties that they will invest it appropriately.
“Don’t take the lump sum,” Cuban informed the Dallas Morning News in2016 “You don’t want to blow it all in one spot.”
Instead, by taking the annuity payment, you are ensured to get the greatest take-home profits possible. The payments will likewise be administered every year, making it difficult to waste all of the prize right now.
To take home as much with the swelling amount alternative, you ‘d require to comprise the almost half-billion dollar distinction in through wise financial investments. But not everybody is proficient at investing.
“You don’t become a smart investor when you win the lottery,” statesCuban “Don’t make investments. You can put it in the bank and live comfortably. Forever.”
If you stash your profits in the bank, you most likely will not get the greatest possible return compared to riskier financial investments. But in doing so, you’ll “sleep a lot better knowing you won’t lose money,” he states.
“If you were happy yesterday, you are going to be a lot happier tomorrow,” Cuban informed the Dallas MorningNews “Life gets easier when you don’t have to worry about the bills.”
Cuban likewise provided this suggestions to prize winners: “Hire a tax attorney first,” before you declare the cash. They will assist you determine a strategy to make sure that you take advantage of your annuity.
Disclosure: CNBC owns the special off-network cable television rights to “Shark Tank.”
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