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Pepsi Billions... cash or annuity?

hypersoniq's avatar - binary

Pepsi billions sweeps comes up in september again...

if you did get there and had the right 1 in a million number to win the billion, how would you take it?

here is the payout schedule for annuity...

year 1 thru 20 = $5,000,000  (running total $100,000,000 after 20 years)

year 21 thru 39 = $10,000,000 (running total $290,000,000 after 39 years)

year 40 = 1 payment of $710 million

the lump sum payment is 250,000,000... it would take 35 years to equal the lump sum but you would have the money NOW (and miss out on the last payment of 710 million).

What would you do?

I would take the cash.... otherwise I would be 79 for the last payment...

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I would take cash option...40 years is just too long for me considering everything.

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Let's say you could invest all your payments at 10%/yr for 40 years...disregarding taxes, spending nothing.

Annuity: $3,519,271,551

Cash: $11,314,813,892

Hmmm, do I want 3 or 11 billion?  I'll take the cash payment! 

DoctorEw220's avatar - alien helmet.jpg

i would opt for the annuity because you and your estate, and probably your estate's estate would be set for life.

hypersoniq's avatar - binary

if it was a more even distribution, the annuity might be tempting, but you have to wait 40 years to get the bulk of it... I would rather give each of my 3 kids a trust fund for 20 million @ age 21 and enjoy seeing them use it now... keep in mind, after federal taxes... that works out to $162,500,000 and the state and local taxes will take another chunk In my locale that would leave $156,000,000 free and clear. I would rather get the bulk of the taxes paid in one shot.

after hooking up the kids, that leaves $96,000,000. If I would invest 50 million until retirement age, I'm sure the mrs. and I could scrape by on 46 million... ;-)

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frankly,i don't think i would even want anything like a billion dollars. in my opinion, it seems to foster too much greed...i'll stick with the american lottos, thank you...lol

DoctorEw220's avatar - alien helmet.jpg
Quote:Originally posted by ThinkBig on July 18, 2004


frankly,i don't think i would even want anything like a billion dollars. in my opinion, it seems to foster too much greed...i'll stick with the american lottos, thank you...lol


and $250 million won't?
Mana's avatar - mana

Hey ... Mana wouldn't *mind* a billion dollars at all ^^;

... of course, i'd like to know where the money is coming from for this "play for billion" ... what kinda stability will that annuity be under.? It's not state/government backed, it's a corporation who has a hold of this money. Though I expect Pepsi Co. to be around for a little while, it's not as firm as U.S. backed treasuries and municipal bonds.

.... once again, a good reason to probably take the lump sum ... $250m would be plenty for a young, insane, scary goth to ... further lose sanity with. ^^;

(Note: if it were a lottery lump sum, that'd possibly be equvilant to around $500m advertised jackpot) 

MetroPlex's avatar - 619631

I'd take the cash...in 40 years of investing, you would have more than 1 billion dollars, if you are smart.



MP

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  Yeah, in the case of Pepsi billions, it would probably be wiser to take the $250 million and run, simply because the investments aren't backed by the government.

rundown99's avatar - cigar
Quote:Originally posted by hypersoniq on July 18, 2004



Pepsi billions sweeps comes up in september again...

if you did get there and had the right 1 in a million number to win the billion, how would you take it?

here is the payout schedule for annuity...

year 1 thru 20 = $5,000,000  (running total $100,000,000 after 20 years)

year 21 thru 39 = $10,000,000 (running total $290,000,000 after 39 years)

year 40 = 1 payment of $710 million

the lump sum payment is 250,000,000... it would take 35 years to equal the lump sum but you would have the money NOW (and miss out on the last payment of 710 million).

What would you do?

I would take the cash.... otherwise I would be 79 for the last payment...





          Of course, I would take the cash ...... and get the hell out of town !!!!

 

          But just more note.....

 

          If you won the Pepsi game, you wouldn't be anonymous.

MetroPlex's avatar - 619631

^^^



You are not that anonymous now. I mean with the internet anyone can become a target. All you have to do is type in a name in google and alot of stuff might come up and people can use that info to do whatever they want...If you became a multi-millionaire you can protect yourself more...than just some Joe-Blow in anytown america.

MP

hypersoniq's avatar - binary
Quote:Originally posted by goldeneye26 on July 19, 2004



          But just more note.....

 

          If you won the Pepsi game, you wouldn't be anonymous.




for that much dough, I wouldn't care ;-)
DoctorEw220's avatar - alien helmet.jpg
Quote:Originally posted by Mana on July 19, 2004



Hey ... Mana wouldn't *mind* a billion dollars at all ^^;

... of course, i'd like to know where the money is coming from for this "play for billion" ... what kinda stability will that annuity be under.? It's not state/government backed, it's a corporation who has a hold of this money. Though I expect Pepsi Co. to be around for a little while, it's not as firm as U.S. backed treasuries and municipal bonds.

.... once again, a good reason to probably take the lump sum ... $250m would be plenty for a young, insane, scary goth to ... further lose sanity with. ^^;

(Note: if it were a lottery lump sum, that'd possibly be equvilant to around $500m advertised jackpot) 




I'm with Mana.  You're really getting screwed with the cash option, even though her figures are incorrect.  If the cash were invested into an annuity, it would still be lessthan $1 billion after the 40 years. Plus, when the annuity expires, I'll be in my 60s.  Just thinking about me in my 60s with a ton of money and a ton of little so-and-so's running around asking me to buy them toys, and me constantly telling them no.  Anyway, Dr. Ew is in favor of the annuity.
DoctorEw220's avatar - alien helmet.jpg

Also, i think the annuity is insured.  i don't think pepsi would want to risk a lawsuit of those proportions.

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