Financial Literacy

[Furball808]

A 20 year old won a lottery but instead of getting the won 1 million USD prize, she decided to opt to get 1,000 USD every week for life.

https://x.com/stats_feed/status/1998828027661385758?s=61

Is she right to choose the $1000/week? Let’s hear the arguments. I’ll start. Look at her age. She’s 20 years old. Seems healthy and has a good chance to live a long life. By 60 years old, she has already received over $2 million which beats the $1 million. But some people would argue that getting the $1 million can be invested and grow bigger. For some though, the $1000 is a good addition to their life and could provide financial stability even more. If she has control, she can even DCA the half of $1000 every week into bitcoin and watch it grow. What are your thoughts?

[Distinctin]

With her age, I don't think she'll be able to manage it right the amount of her total winnings. Most likely, it will only go to her wants and unconsciously spending it all to sustain her life's cravings. But my question is, does she have no parents or reliable guardians to guide her in her finances? Because if she can get even half of her total winnings, that could be a good investment capital for her dream investments, and the rest she can get it monthly for her allowance and emergency funds.

However, if she has no current plans for her money, its better to leave it that way as long as she holds a contract of their agreement and that any time, she can withdraw her funds if sudden needs arise.

[abhiseshakana]

I don't think the girl's decision was wrong, but it wasn't optimal. Considering it was made by a 20-year-old woman who could be considered newly wealthy, her decision was very smart from the perspective of psychological security and long-term protection. She understood the high risk of behavior and the inability to manage large sums of money. Therefore, her choice was very logical and realistic for the average young person.

However, if we consider it from the perspective of investment mathematics and macroeconomic conditions, and considering that money is safer when it's under our control, the USD 1,000,000 option is much more appropriate. The concern is whether she's confident that the for life payout is 100% guaranteed. It's important to consider that the money is under the control of the lottery company, in the event of a crisis, it could be lost, renegotiated, or cutbacks could occur if the program is discontinued.

But since she's already settled on $1,000 per week, she can budget 40–50% for living expenses (given that young people have very little control over their purchasing decisions). She can create an emergency fund for at least 12 months, save 10–20% in inflation-proof assets like Bitcoin, and invest the rest in productive assets like global stock indices or real-sector businesses. She could also try DCA  from $1,000 per week, setting aside around $400–500 per week. The figure would be quite impressive over the next 30 years.

[JeffBrad12]

She didn't account for inflation. That 1 million will be worth significantly less. That money could be well going into a safe investment like index stock and she'd grow it even more as the time goes. Even just putting it in gold already put her way ahead instead of getting 1k weekly.
I guess she didn't know that yet and that's why she opt to get 1k weekly, honestly though whatever works for her. She could still use the money to reinvest although it's not as efficient as receiving it all in one day.

[348Judah]

A 20 year old won a lottery but instead of getting the won 1 million USD prize, she decided to opt to get 1,000 USD every week for life.

This is wisdom application and we can't expect to have huge sum of money with us and keep them all together for long without diverting the money on others things, though as an old woman, i don't expect her to go into any form of investment because of age, but instead, I still go along with their decide being the best for her to live to spend her winnings over time, enjoying it.

[viljy]

I think this is a wrong decision. The reason is that modern man is so spoiled that he is confident in his future. What if she dies in a year? Or will she get into a car accident and require expensive medical treatment? Will she take the money on credit and pay it out of this income of $1,000 per week, in fact, giving her winnings to the bank (and if it were hypothetically Russia, then 60%)? Calculations that by old age she will receive 2 million instead of 1 million are simply naive. A bird in the hand is worth two in the bush.

[mrust_mobile]

She could have bought a real estate or dividend stocks with that amount and ride the cash flow they produced till she died.

Yes I smell illiteracy here.

Today’s $1000 will certainly buy a lot less stuff 5 years later but a real estate or a company that pays dividends will adjust their prices accordingly to the inflation and that means you won’t lose any purchasing power no matter what happens.

Getting $1000/was a very bad financial decision but she was only 20 I can’t blame her for this.

[mvdheuvel1983]

A 20 year old won a lottery but instead of getting the won 1 million USD prize, she decided to opt to get 1,000 USD every week for life.

This is wisdom application and we can't expect to have huge sum of money with us and keep them all together for long without diverting the money on others things, though as an old woman, i don't expect her to go into any form of investment because of age, but instead, I still go along with their decide being the best for her to live to spend her winnings over time, enjoying it.

At 20 years of age that wasn't the best decision, taking all the money and not keeping it in the bank but investing into things that will bring growth in future would have been the better option for her at age 20.  The age according to the op is not old age she's just in her early teenage age when she should have taken the money then get a good investment ideas from her parents on what to invest with the same amount in 10 years should should have become more wealthy because of the profit the amount would have generated if invested in a good business.

[Jubilee58]

A 20 year old won a lottery but instead of getting the won 1 million USD prize, she decided to opt to get 1,000 USD every week for life.

https://x.com/stats_feed/status/1998828027661385758?s=61


Is she right to choose the $1000/week? Let’s hear the arguments. I’ll start. Look at her age. She’s 20 years old. Seems healthy and has a good chance to live a long life. By 60 years old, she has already received over $2 million which beats the $1 million. But some people would argue that getting the $1 million can be invested and grow bigger. For some though, the $1000 is a good addition to their life and could provide financial stability even more. If she has control, she can even DCA the half of $1000 every week into bitcoin and watch it grow. What are your thoughts?

To me, she has done the right thing. Handling and sustaining money requires high level of wisdom and discipline, and earning $1000 every week for life is huge and that serves as an investment too. And she can equally use part of the weekly income to invest in other assets that can earn her more money . This is  good wisdom as she has automatically become a shareholder of the company paying her. She took a wise decision because her decision would make her have dual streams of income. One, from the company paying her weekly and from her own personal investment, and such a wise decision has given her freedom from financial difficulty.

Money is as lasting as the wisdom used to handle it they say. She has taken the best decision.

[joniboini]

Can't really judge the decision without knowing her life, to be honest. Sure, she looks healthy, but is that the only factor? Is there no background deal behind this or something else? But yeah, getting the $1 million to invest in other sources should be better, as mentioned many times above. Assuming she gets the full amount, minus taxes and other fees.

Well, it's her life anyway. Hopefully she's happy and lives a fulfilling life with the prize she gets.

[noorman0]

The offer she accepted was for life; by calculation, $1M would last less than 19 years (amounting to $52k/year). However, she seemed to be taking several other speculative bets with the winnings: her own life, the company's health, and inflation. This wasn't a smart decision for a 20 yo.

-snip-
Money is as lasting as the wisdom used to handle it they say. She has taken the best decision.

There are much better options, like a bank savings account which could actually earn him more than $1k per week. I even understood how bank savings worked when I was about 14 yo.

[DanWalker]

She didn't account for inflation. That 1 million will be worth significantly less. That money could be well going into a safe investment like index stock and she'd grow it even more as the time goes. Even just putting it in gold already put her way ahead instead of getting 1k weekly.
I guess she didn't know that yet and that's why she opt to get 1k weekly, honestly though whatever works for her. She could still use the money to reinvest although it's not as efficient as receiving it all in one day.

Each option has its own advantages and disadvantages. If you have a sound investment plan, investing the entire $1 million at once will yield a better return. Conversely, if you invest incorrectly, you could lose everything. Meanwhile, receiving $1,000 per week, although inflation may reduce its value, but it will help you better mitigate and control risk, as well as make it easier to manage. Furthermore, if you know how to manage, save, and invest properly, you can still generate a better and more stable income.

In your opinion, which is better, the Lumpsum strategy or the DCA strategy? Clearly, both have their own advantages and disadvantages.

[amihada]

We never know what his life is like out there, but I think he made a smart decision by choosing $1,000 a week for life. Now that he is young, physically healthy, logically, he has a great chance of living longer and receiving more money than $1 million. The reason he made this decision might be to adjust it to his needs and priorities. If at that time he was in urgent need of money, such as having to pay off a large amount of debt, perhaps taking all the money at once would be better to solve the problem.

All considerations have been made and he can certainly manage his money wisely, then 1,000 USD per week can be a stable source of income and provide financial freedom in the long term, especially if he has other sources of income that can be used for investment depending on his abilities and the type of investment he has mastered.

[Dick Long]

This is wise of her. She is now a share holder in that organization for displaying such rear wisdom at a time like that. I must say it's very rear to have or see people with such level of smartness. With her decision has made for herself and family fortune of wealth for the whole of her life. She is a business guru.

[Obulis]

A 20 year old won a lottery but instead of getting the won 1 million USD prize, she decided to opt to get 1,000 USD every week for life.

https://x.com/stats_feed/status/1998828027661385758?s=61

Is she right to choose the $1000/week? Let’s hear the arguments. I’ll start. Look at her age. She’s 20 years old. Seems healthy and has a good chance to live a long life. By 60 years old, she has already received over $2 million which beats the $1 million. But some people would argue that getting the $1 million can be invested and grow bigger. For some though, the $1000 is a good addition to their life and could provide financial stability even more. If she has control, she can even DCA the half of $1000 every week into bitcoin and watch it grow. What are your thoughts?

What could be her reason for deciding to get 1000 dollars weekly that's to say 4000 dollars monthly.
Let me assume!!
Maybe she is doing that to have it as a weekly pay to herself and probably she didn't have steady job or good paying job. If this assumption is the case, this is revealing her financial mindset or literacy which is somehow retirement oriented looking at her age. And she forgets that things can happen (emergency) that will make her withdraw more than 4000 dollars in a month. A more healthy approach towards the use of such privilege is more better than the retirement oriented approach (don't forget this is an assumption of her decision).

To also take a second look, her reason of withdrawing 4000 dollars monthly could also be based on fear of venturing bigger and so she chose to take it small. Somehow, with one million dollars, 1000 dollars weekly DCA into Bitcoin that's 48,000 dollars annually is a good approach.

[imthegreat]

A 20 year old won a lottery but instead of getting the won 1 million USD prize, she decided to opt to get 1,000 USD every week for life.

https://x.com/stats_feed/status/1998828027661385758?s=61

Is she right to choose the $1000/week? Let’s hear the arguments. I’ll start. Look at her age. She’s 20 years old. Seems healthy and has a good chance to live a long life. By 60 years old, she has already received over $2 million which beats the $1 million. But some people would argue that getting the $1 million can be invested and grow bigger. For some though, the $1000 is a good addition to their life and could provide financial stability even more. If she has control, she can even DCA the half of $1000 every week into bitcoin and watch it grow. What are your thoughts?

I can't find a single positive in her decision because it's a completely bad one. After all, something could happen to her tomorrow and she won't need the money in the next world. $1,000 a month is quite a bit in the country where I live; people spend two or five thousand dollars a month if they live in the capital. Of course, it would have been much wiser to get a million right away, because you can invest it and earn huge interest and just live on it, while the million itself will be saved and the bank employees will kiss your hands when you go in.

I don't agree with her decision at all; it's strange.

[Hewlet]

A 20 year old won a lottery but instead of getting the won 1 million USD prize, she decided to opt to get 1,000 USD every week for life.

Considering her age and looking at the possibility that she's not mattered enough to handle such amount of money so well, her decision is not completely bad because in a way, the money will be safe pending when she's matured enough to put the money into food use. Though the other clause I'm looking out for is that at any time she's ready to withdraw the rest of the money at a go, that she will be allowed to do so. If such clause is in place, then everywhere is good.

If I where in her shoes, I will certainly invest the money into something tangible rather than leaving it that way. When inflation eats on that money, what she left will never be the same as what she will later get in the next five years to come at the most.

[summonerrk]

A 20 year old won a lottery but instead of getting the won 1 million USD prize, she decided to opt to get 1,000 USD every week for life.

https://x.com/stats_feed/status/1998828027661385758?s=61

Is she right to choose the $1000/week? Let’s hear the arguments. I’ll start. Look at her age. She’s 20 years old. Seems healthy and has a good chance to live a long life. By 60 years old, she has already received over $2 million which beats the $1 million. But some people would argue that getting the $1 million can be invested and grow bigger. For some though, the $1000 is a good addition to their life and could provide financial stability even more. If she has control, she can even DCA the half of $1000 every week into bitcoin and watch it grow. What are your thoughts?

I don't understand this girl's stupid decision at all, because I just checked in the bank app that if you deposit a million greenbacks in dollars at any bank, you'll get 2% per annum. And if you divide 2% per annum by 12 months, that's about $1,660 per month. This means that not only will the million be saved in the bank, but you'll also get a monthly profit of not $1,000, but one and a half times that. So I'm just laughing at this girl's stupid decision.
Although the situation is understandable—at 20, she don't have much brainpower yet.

[bubilas]

A 20 year old won a lottery but instead of getting the won 1 million USD prize, she decided to opt to get 1,000 USD every week for life.

https://x.com/stats_feed/status/1998828027661385758?s=61

Is she right to choose the $1000/week? Let’s hear the arguments. I’ll start. Look at her age. She’s 20 years old. Seems healthy and has a good chance to live a long life. By 60 years old, she has already received over $2 million which beats the $1 million. But some people would argue that getting the $1 million can be invested and grow bigger. For some though, the $1000 is a good addition to their life and could provide financial stability even more. If she has control, she can even DCA the half of $1000 every week into bitcoin and watch it grow. What are your thoughts?

I don't understand this girl's stupid decision at all, because I just checked in the bank app that if you deposit a million greenbacks in dollars at any bank, you'll get 2% per annum. And if you divide 2% per annum by 12 months, that's about $1,660 per month. This means that not only will the million be saved in the bank, but you'll also get a monthly profit of not $1,000, but one and a half times that. So I'm just laughing at this girl's stupid decision.
Although the situation is understandable—at 20, she don't have much brainpower yet.

I much prefer the idea of ​​investing this money in real estate and renting it out. After all, then you'll have the apartment to yourself, and you'll earn much more per month than $1,600. That's a million dollars. You could buy an entire house in my country. Or some expensive apartment in some really good country, and even get a residence permit with a simplified process thanks to such good financing. This country has a so-called golden passport.

It would be much better to invest this million dollars in cryptocurrency, in particular, of course, in Bitcoin, using the DCA strategy. And this will definitely lead to incredible profits in the future.

[maknyos]

Perhaps she had thought long and hard about it before deciding to accept $1,000 a week instead of taking it all. We don't know what her life is like, so maybe it was the wisest decision she could have made. Because if she took it all, she was worried it would be wasted. One thing that comes to mind is that maybe she realized she wasn't very good at managing money.
However, if I were in her position, I would definitely take it and allocate it for investment. I think most people would think the same way. The point is that what is good for us may not necessarily be good for others.