Join Early Retirement Today
Reply
 
Thread Tools Display Modes
When wealth managers win the Powerball lottery
Old 12-07-2011, 05:27 PM   #1
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,855
When wealth managers win the Powerball lottery

After the winning lottery ticket was announced, these guys were driving Connecticut nuts because they didn't immediately come forward. When they finally did it was because they'd formed a trust, lawyered up, and hired a publicist.

Powerball: Connecticut money managers strike it rich -- via lottery - latimes.com
3 Connecticut money managers who hit $254M Powerball jackpot to donate $1M to veterans groups - NY Daily News
Quote:
A trio of money managers who shared a $254 million Powerball jackpot said Sunday they were kicking off charitable donations by splitting a $1 million gift among five veterans service organizations.
The trust was created by Greenwich, Conn., wealth fund managers Greg Skidmore, Brandon Lacoff and Tim Davidson after they learned they had won the jackpot.
The owner of the store who sold the ticket also won $100,000.

Judy Martel's Bankrate.com blog:
How to manage a lottery win | Bankrate.com
Quote:
The partners in a wealth management company opted for the lump sum of $103.5 million instead of a 30-year annuity, a smart move if the highest income tax rate rises from 35 percent to 39.5 percent at the end of 2012. In addition, if one of the three were to die soon, heirs would be on the hook to pay estate taxes for the present value of the gift even if it were being paid in installments over 30 years. That would mean they'd have to come up with a big chunk of change before the estate even received all the lottery winnings.
Read more: How to manage a lottery win | Bankrate.com How to manage a lottery win | Bankrate.com
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-07-2011, 06:56 PM   #2
Full time employment: Posting here.
arebelspy's Avatar
 
Join Date: Apr 2011
Posts: 625
Wow. Usually people smart enough to make moves like that wouldn't be playing the lottery.
arebelspy is offline   Reply With Quote
Old 12-07-2011, 07:37 PM   #3
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 17,773
New preferred asset allocation: 99.99 percent in the markets, .01 in the lottery.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 12-07-2011, 08:13 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 3,865
Quote:
Originally Posted by arebelspy View Post
Wow. Usually people smart enough to make moves like that wouldn't be playing the lottery.
If the prize were "no taxes for life" lottery demographics would expand.
GrayHare is offline   Reply With Quote
Old 12-07-2011, 08:54 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 13,184
So they really did win it? There was speculation, especially given the deadpan faces they had, that they were actually acting as agents for an anonymous winner.
RunningBum is offline   Reply With Quote
Old 12-07-2011, 10:16 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
TromboneAl's Avatar
 
Join Date: Jun 2006
Posts: 12,880
Were they rich? Probably, but I haven't heard that said on the news. Even money managers can have too much debt.
__________________
Al
TromboneAl is offline   Reply With Quote
Old 12-08-2011, 10:02 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sarah in SC's Avatar
 
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,566
They've sworn that they are the sole beneficiaries of the trust they formed, so probably it is legit.
__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way

Sarah in SC is offline   Reply With Quote
Old 12-08-2011, 01:45 PM   #8
Full time employment: Posting here.
MikeD's Avatar
 
Join Date: Apr 2003
Location: Leesburg, VA
Posts: 904
From a link in the article: "the three have said they plan to use their investment expertise to increase the amount in the trust."

Wow, too bad ordinary people can't do that themselves without the help of highly paid advisers!

Mike D.
__________________
I just want to celebrate another day of livin'
I just want to celebrate another day of life

- R. Earth
MikeD is offline   Reply With Quote
Old 12-08-2011, 01:55 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sarah in SC's Avatar
 
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,566
Well, considering what most lottery winners do after they win, it should be interesting to see how pros manage the assets. I read all I can on lotteries and their "winners" and most are penniless in a remarkably short period of time after winning.
__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way

Sarah in SC is offline   Reply With Quote
Old 12-08-2011, 02:36 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,715
Never played the lottery, so I won't have to worry about winning. My biggest fear of winning (even a mil or 2) would be the "poor" folks camped out at your door or the reams of mail you would receive begging for help. I watched one of those "Lottery Winners" shows once and one of the winners had to threaten the Post Office to get them to stop forwarding letters to him addressed "Lottery Winner, Podunk, IL".
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is online now   Reply With Quote
Old 12-08-2011, 02:58 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
Hmmm - I read the Postscript chapter of Ben Graham's The Intelligent Investor and Goggle up Wm Bernstein's 15 Stock Diversification Myth periodically to remind myself the odds are against me BUT

I do have a few good stocks. Not a pure Boglehead.

heh heh heh - haven't bought a lottery ticket when I gassed the car in years BUT Do I feel Lucky? Well do I? This thread has me thinking.
unclemick is offline   Reply With Quote
Old 12-08-2011, 09:51 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,733
Quote:
Originally Posted by arebelspy View Post
Wow. Usually people smart enough to make moves like that wouldn't be playing the lottery.
There have been various article and stories I've read over the past several years, where very smart mathematically inclined people figure out ways of betting on lotteries when the odds actually favor the player. This doesn't happen often and it is generally restricted to the various scratch games, rather than Powerballs with huge winners. But I wouldn't necessarily assume that these guys are stupid for playing the lottery. Still one of the reasons I really dislike lotteries is I feel it is a tax on dumb people who already have a tough enough life.
clifp is offline   Reply With Quote
Old 12-09-2011, 07:08 AM   #13
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 25,155
Quote:
Originally Posted by clifp View Post
I wouldn't necessarily assume that these guys are stupid for playing the lottery.
Certainly not.
OTOH, I think it's dumb to buy more than one ticket, in hopes of "improving your odds of winning."
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 12-09-2011, 07:45 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
I occasionally buy a lotto ticket; I figure I waste a dollar in lots of other ways, too...

With my current situation, I'm quite happy to manage my own finances. But if I was to magically win $100M or so, I'd probably seek some advice, too, from pros in lawyering and estate planning, etc.
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 12-09-2011, 08:31 AM   #15
Full time employment: Posting here.
arebelspy's Avatar
 
Join Date: Apr 2011
Posts: 625
Quote:
Originally Posted by clifp

There have been various article and stories I've read over the past several years, where very smart mathematically inclined people figure out ways of betting on lotteries when the odds actually favor the player. This doesn't happen often and it is generally restricted to the various scratch games, rather than Powerballs with huge winners. But I wouldn't necessarily assume that these guys are stupid for playing the lottery. Still one of the reasons I really dislike lotteries is I feel it is a tax on dumb people who already have a tough enough life.
Yeah, I've read similar stories. One fun scratch one in Canada. I assume this wasn't the case here.

Certainly some smart people play the lotto for their own reasons. I gamble occasionally (live in Vegas and only gamble when friends are in town, categorized as entertainment in the budget). But I maintain that the statement "Most people smart enough to make moves like that wouldn't be playing the lottery" is correct.

Funny side note. Autocorrect tried to make "friends", above, into Freud. So it said "only gamble when Freud is in town." A literal Freudian slip!
arebelspy is offline   Reply With Quote
Old 12-09-2011, 11:10 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Quote:
Originally Posted by clifp View Post
There have been various article and stories I've read over the past several years, where very smart mathematically inclined people figure out ways of betting on lotteries when the odds actually favor the player. This doesn't happen often and it is generally restricted to the various scratch games, rather than Powerballs with huge winners. But I wouldn't necessarily assume that these guys are stupid for playing the lottery. Still one of the reasons I really dislike lotteries is I feel it is a tax on dumb people who already have a tough enough life.
Be that as it may, nobody puts you in jail if you refuse to pay the powerball tax, but they will if you refuse to pay other taxes.

I favor any voluntary tax over a coerced one. The poor need agency as do the middle class and the affluent. We can bet all kinds of ways, including flights to Las Vegas, socks and bonds, commodities and the lottery. For many poorer people, the lottery is it. And if you don't think that gambling plays a meaningful part in a man's life, including a poor man's, just attend a few cock fights in Latin America. In fact, you should be able to find a few right there in Hawaii.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 12-09-2011, 12:11 PM   #17
Thinks s/he gets paid by the post
DangerMouse's Avatar
 
Join Date: Jan 2007
Location: Silicon Valley
Posts: 1,812
Personally I am glad to see these folks win as I think it is safe to assume these guys won't be bust and back on welfare in a couple of years like lots of lottery winners seem to do.

As for comments about how dumb it is to play the lottery, I'll confess I play regularly and am not ashamed to admit it. Personally I don't think playing the lottery is any dumber than paying $3 for a coffee at Starbucks or paying for a soda when you could be drinking free water when you dine out. It's each to their own.
__________________

I be a girl, he's a boy. Think I maybe FIRED since July 08. Mid 40s, no kidlets. Actually am totally clueless as to what is going on with DH.
DangerMouse is offline   Reply With Quote
Old 12-09-2011, 01:06 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,483
Quote:
Originally Posted by Sarah in SC View Post
I read all I can on lotteries and their "winners" and most are penniless in a remarkably short period of time after winning.
True, but it sounds like these guys are pulling down some pretty good money, so maybe they won't feel the need to buy ANOTHER cigarette boat or two or 10........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 12-09-2011, 03:13 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,715
Interesting discussion. I would never criticize anyone for playing the lottery - if they can afford to lose. I would only call it "dumb" if you thought it was more than entertainment - with the extremely thin chance of becoming an instant millionaire. Never played, but when I was feeling low at w*rk, I often considered buying one (1) ticket to stick in my desk. For the $1.00 entry fee, I could have fantasized for a week about winning enough money to escape. That would have been well worth it and the only way I would have ever played. Folks who buy multiple tickets do stand a statistically greater chance of winning, but it is still an extremely small chance. For this reason, multiple tickets never made sense to me. One ticket is all you need to fantasize. Any more than that and you are truly playing a loser's game (IMO). Still, if it weren't for those playing large numbers of tickets, the lottery would not work. The pots would not build up to the multi-multi millions as they do when many people buy 10's to 100's of tickets.

Without getting too political (I hope) the lottery is (arguably) the only tax that some folks pay. That at least gives them a little skin in the game. Personally, I don't favor lotteries as money makers for gummints, but, since they exist, they are fair game for discussion as FIRE vehicles or FIRE activities. Hope someone here wins a big pot. Love to hear how it affects your FIRE plans. I'll fantasize along with everyone else about that possibility. Good luck and, YMMV.
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is online now   Reply With Quote
Old 12-09-2011, 03:39 PM   #20
Thinks s/he gets paid by the post
 
Join Date: Jan 2007
Location: Thousand Oaks
Posts: 1,111
Quote:
Originally Posted by DangerMouse View Post
Personally I am glad to see these folks win as I think it is safe to assume these guys won't be bust and back on welfare in a couple of years like lots of lottery winners seem to do.

As for comments about how dumb it is to play the lottery, I'll confess I play regularly and am not ashamed to admit it. Personally I don't think playing the lottery is any dumber than paying $3 for a coffee at Starbucks or paying for a soda when you could be drinking free water when you dine out. It's each to their own.
I will buy a starbucks coffee if i'm traveling because i want a decent cup of coffee (i'll concede it being overpriced.) i will also pay "a lot" for a beer i like at a jazz club instead of getting water. i'm willing to pay a premium for drinks when i can't supply my own if i'm in the proper mood for one. that's my rationale for the expensive drink thing.

So what is the "(irr)rationale" for lottery tickets ? Maybe it's not easily expressed ? Is it for the emotional bump / daydream that ensues when you muse on the possibly of winning ? I never got that so i don't buy lottery tickets (or gamble).

On an amusing final note. I have found i'll irrationally go run firecalc on occasion just to see the heartwarming "yes you have enough money to retire" results even when i know that it will tell me that before running it. Maybe I should make a poll on the to see if there are any other "compulsive firecalcers"
mh is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


» Quick Links

 
All times are GMT -6. The time now is 05:55 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.