20-Year-Old Lottery Winner Chooses Weekly Payments

Level 4 Lesson by: Aron Thode Source:finance.yahoo.com

How to study this lesson

Ask: (1) Do you buy lottery tickets? Why or why not? (2) What would you do with one million dollars?

Close-up photo of a $1,000,000 scratch-off lottery ticket on a wooden table, with three piggy bank icons revealed in a scratched silver panel and scratch-off flakes scattered around.
A winning scratch ticket.

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Many lottery winners must choose between a large one-time payment and smaller payments. A 20-year-old woman from Quebec, Canada, Brenda Aubin-Vega, faced that choice after winning the top prize on a scratch ticket. She saw three piggy bank symbols and froze. "I couldn't believe my eyes! I checked my ticket over and over again," she told Yahoo News Canada. She called her dad, took time off work, and then picked a weekly payment of $1,000 instead of a $1 million cash prize.

Her decision drew criticism online and started a debate about money today versus money later. In the United States, lottery income is taxed by federal, state, and local governments, so big jackpots shrink fast. A $1.5 billion Powerball winner would keep about $516.7 million after federal taxes. Aubin-Vega is Canadian, and lottery prizes there are not taxed, so she could have taken the $1 million with no penalty.

The weekly plan gives her $52,000 a year, which works like a 5.2% yearly return on $1 million. The money comes from the province of Quebec and is backed by its government, so the risk is very low. Her age also matters: at $1,000 a week she reaches $1 million at 39 and about $3.1 million by 80.

A fixed weekly payment offers little flexibility, while a $1 million cash payment could be invested in many kinds of assets. A low-cost fund that follows the stock market and grows 7% a year could turn $1 million into several million in about 10 years. Inflation also reduces buying power over time. With 2% yearly price rises, $1,000 a week could be worth less than half its current value by age 56. The weekly choice also removes the chance to brag about being a 20-year-old millionaire.

Vocab List

  • Lottery (n.) — A game where people buy tickets and some win money.
  • Jackpot (n.) — The top prize in a lottery.
  • Taxed (v.) — Charged money by the government.
  • Penalty (n.) — A punishment or extra cost for doing something.
  • Return (n.) — The amount of money gained from an investment.
  • Risk (n.) — The chance of losing money or having a bad result.
  • Flexibility (n.) — The ability to change plans or use something in different ways.
  • Inflation (n.) — A general rise in prices over time.
  • Weekly (adj.) — Happening every week.
  • Debate (n.) — A discussion with different opinions.

Listen and fill the gaps below:

Listen and Fill Gaps

Listen to the audio and complete the gaps below:

Many lottery winners must (1) __________ between a large one-time payment and smaller payments. A 20-year-old woman from Quebec, Canada, Brenda Aubin-Vega, faced that choice after winning the top prize on a scratch ticket. She saw three piggy bank symbols and froze. "I couldn't believe my eyes! I checked my ticket over and over again," she told Yahoo News Canada. She called her dad, took time off work, and then picked a (2) __________ payment of $1,000 instead of a $1 million cash prize.

Her decision drew criticism online and started a (3) __________ about money today versus money later. In the United States, lottery income is (4) __________ by federal, state, and local governments, so big jackpots shrink fast. A $1.5 billion Powerball winner would keep about $516.7 million after federal taxes. Aubin-Vega is Canadian, and lottery prizes there are not taxed, so she could have taken the $1 million with no penalty.

The weekly plan gives her $52,000 a year, which works like a 5.2% yearly (5) __________ on $1 million. The money comes from the province of Quebec and is backed by its government, so the (6) __________ is very low. Her age also matters: at $1,000 a week she reaches $1 million at 39 and about $3.1 million by 80.

A fixed weekly payment offers little flexibility, while a $1 million cash payment could be invested in many kinds of assets. A low-cost fund that follows the stock market and grows 7% a year could turn $1 million into several million in about 10 years. (7) __________ also reduces buying power over time. With 2% yearly price rises, $1,000 a week could be worth less than half its current value by age 56. The weekly choice also removes the chance to brag about being a 20-year-old millionaire.

True or False

Answer each question by selecting True or False, then click CHECK to see your results.

  • Aubin-Vega chose a $1,000 weekly payment instead of the $1 million cash prize.
    She picked a weekly payment of $1,000 rather than the $1 million cash prize.
  • Lottery prizes in Canada are taxed by federal, state, and local governments.
    The story says Canadian lottery prizes are not taxed, so she could take the $1 million with no penalty.
  • The article says a fixed weekly payment offers little flexibility compared with taking the cash.
    It states that a fixed weekly payment offers little flexibility, while the cash could be invested.

True or False

1. Aubin-Vega chose a $1,000 weekly payment instead of the $1 million cash prize. T / F

2. Lottery prizes in Canada are taxed by federal, state, and local governments. T / F

3. The article says a fixed weekly payment offers little flexibility compared with taking the cash. T / F

Put Events in Order

Put the events from the story in the correct order from first (1) to last (5):

  • ___ She picked the $1,000 weekly payment instead of the $1 million cash prize.

  • ___ She checked her ticket over and over again.

  • ___ Her decision drew criticism online and started a debate about money today versus money later.

  • ___ She saw three piggy bank symbols and froze.

  • ___ She called her dad and took time off work.

Multiple Choice

1. The weekly plan gives her ____ a year.

   A) $1,000

   B) $52,000

   C) $3.1 million

   D) $516.7 million

2. A $1.5 billion Powerball winner would keep about ____ after federal taxes.

   A) $516.7 million

   B) $1 million

   C) $52,000 a year

   D) $3.1 million

3. At $1,000 a week she reaches $1 million at ____.

   A) 20

   B) 39

   C) 56

   D) 80

4. A low-cost fund that follows the stock market and grows 7% a year could turn $1 million into ____ in about 10 years.

   A) $52,000 a year

   B) less than half its current value

   C) $516.7 million

   D) several million

5. With 2% yearly price rises, $1,000 a week could be worth ____ by age 56.

   A) less than half its current value

   B) $3.1 million

   C) $1 million

   D) $52,000 a year

Vocab List
  • Lottery (n.)
  • Jackpot (n.)
  • Taxed (v.)
  • Penalty (n.)
  • Return (n.)
  • Risk (n.)
  • Flexibility (n.)
  • Inflation (n.)
  • Weekly (adj.)
  • Debate (n.)

Vocab Match

Match each vocabulary word with a definition:

1. Lottery

2. Jackpot

3. Taxed

4. Penalty

5. Return

6. Risk

7. Flexibility

8. Inflation

a) A general rise in prices over time.

b) The ability to change plans or use something in different ways.

c) The chance of losing money or having a bad result.

d) The amount of money gained from an investment.

e) A punishment or extra cost for doing something.

f) Charged money by the government.

g) The top prize in a lottery.

h) A game where people buy tickets and some win money.

Discussion Builder
  1. Her decision drew criticism online and started a debate about money today versus money later.
  2. Lottery prizes in Canada are not taxed.
  3. A fixed weekly payment offers little flexibility.
  4. Inflation reduces buying power over time.

Discussion Builder

Choose the best phrase for each gap:

  1. Her decision drew criticism online and started a debate about money today versus money later. ________ it became a trending topic across social media.

    However, / For example, / In contrast, / As a result,

  2. Lottery prizes in Canada are not taxed. ________ she could have taken the $1 million with no penalty.

    Consequently, / However, / For example, / Furthermore,

  3. A fixed weekly payment offers little flexibility. ________ a $1 million cash payment could be invested in many kinds of assets.

    However, / As a result, / For example, / Furthermore,

  4. Inflation reduces buying power over time. ________ the weekly payment feels like much less money in the future.

    Therefore, / However, / For example, / In addition,

Discussion Questions

  1. Did Brenda make the right choice, in your opinion?
  2. What are the benefits of receiving money every week?
  3. What are the advantages of a large one-time payment?
  4. Would you prefer a large one-time payment or smaller weekly payments? Why?
  5. Is inflation a problem in your country? How have prices changed in recent years?
  6. Is a low-cost fund that follows the stock market a good investment? Why do you think so?
  7. What are some other investments that you would consider?
  8. When it comes to investing, do you prefer low-risk, low-reward, or high-risk, high-reward?
  9. Is it smart to take time off work after a big win? Why or why not?
  10. If you received $1,000 a week, how would you use it?

Answers

Listening: (1) choose, (2) weekly, (3) debate, (4) taxed, (5) return, (6) risk, (7) inflation

True or False:

  1. True. She picked a weekly payment of $1,000 rather than the $1 million cash prize.
  2. False. The story says Canadian lottery prizes are not taxed, so she could take the $1 million with no penalty.
  3. True. It states that a fixed weekly payment offers little flexibility, while the cash could be invested.
  4. Undefined.

Multiple Choice: B, A, B, D, A

Put Events in Order:

  1. She saw three piggy bank symbols and froze.
  2. She checked her ticket over and over again.
  3. She called her dad and took time off work.
  4. She picked the $1,000 weekly payment instead of the $1 million cash prize.
  5. Her decision drew criticism online and started a debate about money today versus money later.

Vocabulary:

  1. Lottery: A game where people buy tickets and some win money.

  2. Jackpot: The top prize in a lottery.

  3. Taxed: Charged money by the government.

  4. Penalty: A punishment or extra cost for doing something.

  5. Return: The amount of money gained from an investment.

  6. Risk: The chance of losing money or having a bad result.

  7. Flexibility: The ability to change plans or use something in different ways.

  8. Inflation: A general rise in prices over time.

Discussion Builder:

Hints: 1) Result. 2) Result. 3) Contrast. 4) Result.

  1. As a result,

  2. Consequently,

  3. However,

  4. Therefore,

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