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Glossary
The Present Value of Your Dreams

Some Things To Consider

Present value is a valuable financial concept to understand. Think about it, if you had a little over $9,000 today, you could start saving for something as grand as a yacht! A yacht! While most of us don't just "get" thousands of dollars tossed our way, as soon as you finish your education and earn a regular paycheck, saving money will be doable. And if you know how much you need to have today in order to reach goals tomorrow, you're well on your way to following a successful plan.

So what about that lottery? Seeing how it works (outside of tax implications), is a little bit like seeing the wizard behind the curtain. It takes some of the drama of winning the lottery away. However, if you do ever win, at least you'll know what to expect no matter which path you take—the payout or the regular payments. By the way, which one would you take? Talk this over with your friends and family. See which payout option they would take and ask them why. See if they understand the concept of present value as well as you do. Does this seem to affect the choice they would make?