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Lottery Fever!
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<blockquote data-quote="Babagounj" data-source="post: 5725573" data-attributes="member: 12952"><p>[URL unfurl="true"]https://www.dailymail.co.uk/yourmoney/article-12615789/Current-Powerball-lump-sum-annuity-winnings.html[/URL]</p><ul> <li data-xf-list-type="ul"><strong>If the winner of Wednesday's $1.73B jackpot takes the lump sum they get $757M</strong></li> <li data-xf-list-type="ul"><strong>By comparison, the winner of a $730M jackpot in 2021 got a lump sum of $550M</strong></li> <li data-xf-list-type="ul">The advertised Powerball jackpot is what the prize money would yield in bonds</li> <li data-xf-list-type="ul">High interest rates mean bond yields are high and the jackpots are inflated</li> </ul><p>The explanation for this lies in how the full jackpot amount is calculated. </p><p></p><p>The amount advertised by the Powerball as being the jackpot is not the amount the lottery has in a prize pool and able to pay to the winner. </p><p></p><p>'The cash value is really what Powerball has on hand,' said Jared James, the founder <a href="https://lottoedge.com/" target="_blank">Lotto Edge</a>, which provides insights to various lotteries.</p><p></p><p>'All they're doing with the annuity is investing that money for you. So if interest rates are higher, they can put it in an investment that's going to yield a higher return than it would have a couple of years ago,' he said.</p><p></p><p>The advertised jackpot is therefore the amount that you would get if the prize pool was invested in a portfolio of Treasury bonds for 30 years. </p><p></p><p>As a result, each time chair of the Fed, Jerome Powell, raises interest rates and indirectly increases the yields on 30-year Treasury bonds, he is inadvertently increasing the size of lottery jackpots.</p><p></p><p>The terms of the annuity then dictate that the sum is paid to the winner in 30 annual payments, growing by 5 percent in size each year.</p></blockquote><p></p>
[QUOTE="Babagounj, post: 5725573, member: 12952"] [URL unfurl="true"]https://www.dailymail.co.uk/yourmoney/article-12615789/Current-Powerball-lump-sum-annuity-winnings.html[/URL] [LIST] [*][B]If the winner of Wednesday's $1.73B jackpot takes the lump sum they get $757M[/B] [*][B]By comparison, the winner of a $730M jackpot in 2021 got a lump sum of $550M[/B] [*]The advertised Powerball jackpot is what the prize money would yield in bonds [*]High interest rates mean bond yields are high and the jackpots are inflated [/LIST] The explanation for this lies in how the full jackpot amount is calculated. The amount advertised by the Powerball as being the jackpot is not the amount the lottery has in a prize pool and able to pay to the winner. 'The cash value is really what Powerball has on hand,' said Jared James, the founder [URL='https://lottoedge.com/']Lotto Edge[/URL], which provides insights to various lotteries. 'All they're doing with the annuity is investing that money for you. So if interest rates are higher, they can put it in an investment that's going to yield a higher return than it would have a couple of years ago,' he said. The advertised jackpot is therefore the amount that you would get if the prize pool was invested in a portfolio of Treasury bonds for 30 years. As a result, each time chair of the Fed, Jerome Powell, raises interest rates and indirectly increases the yields on 30-year Treasury bonds, he is inadvertently increasing the size of lottery jackpots. The terms of the annuity then dictate that the sum is paid to the winner in 30 annual payments, growing by 5 percent in size each year. [/QUOTE]
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