Yahoo Finance Live anchors talk about the Mega Millions jackpot's $810 million value and the most financially conscious way to handle lottery winnings.
- Well, if for some reason you don't see all of us right back here on Wednesday, you'll know the office pool hit the Mega Millions jackpot, and we decided not to show up to work. Tuesday's $810 million jackpot is the fourth-largest ever-- the cash option, now worth 470 million, begging the question, would you take it all up front, or should you opt for the annuity over 30 annual payments?
I'm hoping Jared Blikre has the science behind this and what you should do. Here are the results of our Yahoo Finance poll asking you what you would do. And, boy, were they overwhelming.
National polls on this usually are about 70-30, 65, somewhere in there-- ours not close. 83% of you said you would take the cash lump sum. The jackpot is Tuesday night.
I would indeed take the cash option, $470 million. Not sure where I'd put that beyond my yacht, but I just feel like that's the smarter play. But I'm sure the numbers behind this. You've certainly crunched them.
JARED BLIKRE: I looked, and I did some back-of-the-envelope calculations. And the thing is I think the big number is you got to factor in the opportunity cost. So when you take the-- let's say you get $500 million from this.
If you were to take that cash-- and, yes, you're gonna have to pay tax off the top-- you have the ability to put it in a PE fund, a venture capital fund, things that ordinary investors don't have access to. So if you have a good investment plan-- and most people who hit the lottery, they immediately hire financial advisors-- that's another thing.
But if you have a good financial advisor, I think you could make more over the long term. But, yes, there is a calculation based on where the person is residing. So it's gonna change state to state. But if the taxes are a little bit too high, then you can-- well, you can take the lump sum. Rachelle, what do you think?
- I'm taking the lump sum all the way. I'm about that Yolo life. Look, I don't know what tomorrow brings. If I want to be able to hand something off to, like, family or friends, I need to know exactly what I'm working with. I'm not taking that chance of leaving it with the annuity.
For me, I already know the exact house I'm going to buy. I've already picked it out. And so, yes, and a lovely big boat, or maybe I'll join you on your yacht, Dave.
- But are you actually playing in tomorrow's lotto? I mean, do you have a ticket yet?
- Oh, OK, good.
- Oh, I'm getting my ticket. I'm getting my ticket. I'm getting my ticket.
- I always play once--
- And in Maryland, you get to stay anonymous.
- Yeah. Once it gets over 500 million or so, I'm always in. Let me say this, one more piece of financial advice on this. We are in an office pool, as I just mentioned.
I would say those are typically stupid ideas. I will do it because I want to play along. I want to be one of the crew. But it makes no sense.
Your odds are terrible either way. You might as well stick all those odds on your own ticket with the chance that you're gonna keep all of that money. Spreading it out around 20 people over the office, you still have almost no chance of winning these massive jackpots. So you might as well take this chance all yourself. Just my personal advice, Dr. J.
JARED BLIKRE: I'll tell you what, Dave. I'm actually gonna play and participate in this office pool because I did tell you the other day I've never bought a lotto ticket. I lied. I realized that back in the day, I was working for the "Miami New Times" selling ads, and we had an office pool.
And then we indeed did loss. But I didn't want to miss out on the fomo because if everybody else wins, and you're stuck being poor, and you're coming to work Wednesday, that's not gonna feel good.
- Excellent point.
- If you all call in sick on Wednesday, I'll know, and I'll be really salty about it. Well, in Maryland, you get to stay anonymous. If I win, you'd never know. I would still show up to work.