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If you enjoy watching NBC’s hit show “America’s Got Talent” you surely know every big winner receives a million bucks. But here’s the thing: they don’t get it all at once.
The winner basically gets to choose from two options:
1 – An annuity that pays $25,000 per year for 40 years
2 – The “present day value” of that annuity in one lump-sum payment (estimated to be around $300,000)
Now here’s the real kicker: Those payouts are before taxes, which means the actual amount that goes into each winner’s pocket is probably about half of those amounts.
Which all boils down to this…
While either payout option would definitely pad the bottom line, it’s far from the life-changing event most people believe it to be.
But the above being said, winning AGT can still be a lucrative proposition if that person is able to parlay their newfound fame into a well-paying career (and some of them actually do).
I’m sure the contract the contestants must sign when they agree to compete on AGT clearly spells out how the winning prize money will be distributed, but does every contestant read and understand that contract? My guess is the answer is no, leading to a big letdown in the end.
The moral of this story? One should always read the fine print on any contract and make sure they fully understand it in order to avoid a very costly misunderstanding.
How costly? Well, it’s been reported that a few AGT winners thought they had a million dollars coming their way so they started living a millionaire’s lifestyle right away, only to fall hard back to earth once they learned the truth.
Now I didn’t write this with the intention of bashing AGT – far from it. It’s actually a very entertaining show that has helped launch many professional careers, and not just for the ultimate winners. I’m just reflecting on the reality of the situation.
To finish up, here’s a short video that discusses this topic in a little more detail. It’s a real eye-opener.