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$315M Powerball Winner is now broke
Old 01-15-2007, 10:05 AM   #1
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$315M Powerball Winner is now broke

I guess for some people if would have been worth paying for financial advice. On the other hand, as the saying goes, you can't fix stupid

http://news.aol.com/topnews/articles/_a/hard-luck-lottery-winner-[...]

LINK shortened - BMJ
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 10:57 AM   #2
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Re: $315M Powerball Winner is now broke

Wow, wasted $113 million in 4 years.
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 11:04 AM   #3
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Re: $315M Powerball Winner is now broke

Quote:
He took his winnings in a lump sum of $113 million after taxes.
Maybe they (Powerball folks) should make you pass a test in money management before they allow you to take it as one payment. This guy surely is the poster child for annuitization.
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 11:08 AM   #4
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Re: $315M Powerball Winner is now broke

Quote:
Originally Posted by mickeyd
Maybe they (Powerball folks) should make you pass a test in money management before they allow you to take it as one payment. This guy surely is the poster child for annuitization.
They already have a test! You have to fill in 6 multiple choice answers on a scan sheet and submit it at the nearest gas station along with a $1 processing fee. I've tried taking this test on occasion and I never seem to pass it...
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 11:11 AM   #5
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Re: $315M Powerball Winner is now broke

Quote:
I've tried taking this test on occasion and I never seem to pass it...
LOL

Great retort Justin....
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 11:46 AM   #6
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Re: $315M Powerball Winner is now broke

sounds like a ploy. He's probably got it all stashed somewhere.
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 12:07 PM   #7
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Re: $315M Powerball Winner is now broke

That's what I think. He's claimed "thieves" stole all his money to hide it from the lawsuits.

What a mess!

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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 12:21 PM   #8
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Re: $315M Powerball Winner is now broke

Quote:
Wow, wasted $113 million in 4 years.
I could NEVER spend that much money in 4 years. I'd sure like the chance to TRY, though!

Since I don't pay the "California stupidity tax," however, I guess I'll never know.
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 01:10 PM   #9
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Re: $315M Powerball Winner is now broke

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Originally Posted by CybrMike
sounds like a ploy. He's probably got it all stashed somewhere.
Ken Lay is looking after it for him.
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 01:17 PM   #10
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Re: $315M Powerball Winner is now broke

The problem is: people who actually know how to manage their money, don't play the lottery. Therefore, the vast majority of players are financially illiterate, and from that pool you get a few winners. Enter the media, who's happy to do some schadenfreude reporting.
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 01:49 PM   #11
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Re: $315M Powerball Winner is now broke

I don't know which is worse, spending 113 million in 4 years or paying 202 million in income taxes Holy smokes!
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 01:49 PM   #12
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Re: $315M Powerball Winner is now broke

This is actually pretty common. It's just that this guy won the biggest single drawing ever. I'd bet there are several stories like this dotted all over the country.

We had some neighbors win 100k on the lottery back in the 90's...they have nothing to show for it now.

As soupxcan said, "people who actually know how to manage thier money, don't play the lottery".

I remember reading somewhere that like 15% of people surveyed beleive that the only way they will be able to retire comfortablely is by winning the lottery. That's pretty pathetic

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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 01:51 PM   #13
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Re: $315M Powerball Winner is now broke

Quote:
Originally Posted by cube_rat
I don't know which is worse, spending 113 million in 4 years or paying 202 million in income taxes Holy smokes!
I managed a big smile while writing six figure checks to the IRS and high five figure ones to the CA FTB.
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 02:26 PM   #14
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Re: $315M Powerball Winner is now broke

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Originally Posted by cube_rat
I don't know which is worse, spending 113 million in 4 years or paying 202 million in income taxes Holy smokes!
He didn't.

When you win powerball or Mega millions and you take the lump sum, you only get half of the listed jackpot.

FYI: My firm did work for a winner, I DO NOT play.

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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 02:31 PM   #15
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Re: $315M Powerball Winner is now broke

Quote:
Originally Posted by cube_rat
I don't know which is worse, spending 113 million in 4 years or paying 202 million in income taxes Holy smokes!
Well, if you elect the lumpsum distribution, doesn't the jackpot amount get cut in half? So I think he actually paid "only" 44.5 million (315 / 2 - 113), which works out to be around 28%. That does seem to be a pretty low tax rate for such a large income.
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 03:05 PM   #16
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Re: $315M Powerball Winner is now broke

Quote:
Originally Posted by WanderALot
Well, if you elect the lumpsum distribution, doesn't the jackpot amount get cut in half? So I think he actually paid "only" 44.5 million (315 / 2 - 113), which works out to be around 28%. That does seem to be a pretty low tax rate for such a large income.
Top income tax rate of 35% + state. He probably paid somewhere between 40-45% in taxes.

The "lump sum" discount isn't necessarily 50%. They pay you the present value of the prize ($315MM in this case) using some unknown (to me) discount rate.
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 03:06 PM   #17
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Re: $315M Powerball Winner is now broke

Sounds like the guy was/is a boozer and gambler.....2 things when done together can be a disaster!
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 04:49 PM   #18
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Re: $315M Powerball Winner is now broke

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Sounds like the guy was/is a boozer and gambler
Well, at least it did not go to waste.
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 05:39 PM   #19
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Re: $315M Powerball Winner is now broke

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Originally Posted by 3 Yrs to Go
Top income tax rate of 35% + state. He probably paid somewhere between 40-45% in taxes.

The "lump sum" discount isn't necessarily 50%. They pay you the present value of the prize ($315MM in this case) using some unknown (to me) discount rate.
I think they just get a quote on what current value they would need to buy an annuity payout equal to 315MM over 25 years (or however long the annual payout option is).

Quote:
Originally Posted by Donzo
Sounds like the guy was/is a boozer and gambler.....2 things when done together can be a disaster!
Yes, but think of the economic boom in his area for barmaids, pole dancers and bookies. I bet they love the lottery.
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Re: $315M Powerball Winner is now broke
Old 01-15-2007, 06:13 PM   #20
 
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Re: $315M Powerball Winner is now broke

Here is a case where taking the annual payouts would definitly been better. The recepient would have had at least 20 years of expenses.
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