$586 Million?

[Fishingmn]

But if I take it in installments, I can fill up the lower tax brackets (i.e. those between my income and $400k) every year instead of only in the one year I receive the lump sum payout. The difference may not amount to much for a mega-payout in the hundreds of millions, though.

The only problem with this theory is that I've heard that the Lottery builds in a 3.75% gain into their tables so if you think you can beat that rate of return you are better off taking the lump sum and taking the tax hit all at once.

My plan would be to form a charitable foundation so that I could shield up to 50% of the lump sum from any taxes and use that money as the give away pile.

 

[jon-nyc]

Allow me to be the contrarian who would keep most of it and give just some away.



By the way, a good friend of mine won $44MM in the Virginia lottery a few years ago. As a lump sum it was $26, after taxes $14, split with his GF (with whom he bought the ticket) 'just' $7MM each.

At the time he won he had a net worth in the low seven figures and was 2-3 years from retirement. So this was a big boost, but not a huge game changer in terms of his plans or lifestyle.

About a year after he won, we were having dinner. I asked him what if anything had changed. He said "when I'm at a restaurant and they hand me the wine list, I start at the bottom and read up instead of the other way around".

 

[pb4uski]

The only problem with this theory is that I've heard that the Lottery builds in a 3.75% gain into their tables so if you think you can beat that rate of return you are better off taking the lump sum and taking the tax hit all at once.

My plan would be to form a charitable foundation so that I could shield up to 50% of the lump sum from any taxes and use that money as the give away pile.

+1 I always thought that the reason most people take the lump sum is that the taxes are not that different because either way you are in the highest brackets but that people believe they can invest it better than the lottery can (and I would think that too).

 

[Koolau]

Since I don't play, I'll never know, but... I would either fly first class or use one of the Bizjet companies (like NetJets) when I travel. I'd buy a TownCar or big BMW or Mercedes. Other than that, can't think of many things I'd either like to do more OF or more expensively. Sad... Or is it? YMMV

 

[robnplunder]

The more I think about this, If I won that large a sum, I would keep enough to make our life comfortable and give the rest to Veteran's organizations to use for the soldiers and families in need that served protecting our freedom.

(I would still set up a 900 number though, just for kicks).

I understand this. The more I think about it, I would not know what to do with that much $$$$. It will just ruin my relationship with all my relatives, family members, friends.

Besides, I am too comfortably settled with my current life style and don't want to reinvent/recreate a new one b/c I just happen to have 1/2 billion dollars. But, then again, dear Lotto god, please give me a chance to reinvent/recreate a new life style ....

 

[Bestwifeever]

+1 I always thought that the reason most people take the lump sum is that the taxes are not that different because either way you are in the highest brackets but that people believe they can invest it better than the lottery can (and I would think that too).

And even if you can't do better, you still have removed an opportunity for the state/lottery commission/etc. to say, "oops, we are sorry, we can't pay out this year."

 

[pb4uski]

Good point.

 

[GrayHare]

I may be wrong but thought the annual payments stop if you die before they are completed.

 

[Lsbcal]

So, I have to admit that for entertainment purposes, I sometimes spend $2 for a lotto ticket. Even though the lottery is a tax on people who are bad at math.

Here are the "What would you do?" questions if you won:

Do you continue to handle your own finances? Or go with a financial group of advisers? (for me I would think I would still be frugal enough to not want to pay a fee)
Easy, I would buy one of those Indian gaming casinos.

Where do you put such a large sum of cash? Multiple banks, brokerages, credit unions? Are there specialty banks for the super rich?
Casinos will give me pocket money.

How much do you help your family? Set up trusts to dish out cash on a bi-weekly basis? Give them whatever is currently the tax free amount (frugal bastard)?
They don't get a dime. They have to go out and earn it like me and then ... play the lottery too.

Collect on the winning ticket the next day or wait for a few month(s) for the news to die down?
Wouldn't let a day go by, that's cash flow there.
...

NOTE: The above answers are from Rat in Peals Before Swine, I'm just the mouthpiece. I don't buy lottery tickets but Rat does.

Preview at: Pearls Before Swine Comic Strip, December 05, 2013 on GoComics.com

 

[Ronnieboy]

I have to agree that (now 600+ million) it is too big a sum to win or want to win. I think that would bring way too much unwanted attention. Now if the jackpot was one of the beginner $40 million pots, where believe it or not, seems to not interest people anymore, where you could take a lump sum of $23 million, just under $14 after taxes would be nice.

I'd buy each kid a house. Set up a trust where $50k would be thrown off annually to help them keep from having to have two spouses work or if they could live off that, more power to 'em. Give extended family the gift max without incurring more taxes. And implement the retirement plan.

 

[dessert]

What I have always wanted them to do is change the numbers/odds in a way where MORE people can win.....just less money. If a 100-200 people could win a $500k-$1 million.....better odds and still a butt load of money. Or have some version of that like maybe 20 people win a million, 50 people win $200K, 200 people win $50K.....etc .

Good comment F4mandolin. My sentiments exactly. I think it should be spread around more. In speaking for myself, I don't think one individual should "win" so much money. I'd feel better buying a ticket with better odds and less to win. What in the world would I need with $$316 million?

Yes I bought two tickets just in case. Wife and I would put some aside for us and our Son. Then we would give large sums to our immediate siblings who could share with their kids etc. Then charity would get the rest. That would be the fun part.

 

[Svensk Anga]

I normally do not bother with these huge jackpots and long odds. But this time, someone was getting up an office pool to play. I kicked in a few bucks as insurance against being the only one left there next year.

I am hoping my tiny share is just enough to ward off OMY syndrome.

 

[Elbata]

Quote:

I know it sounds perverse, but I don't think I'd like to win, or otherwise be given, money on that scale. I think it brings out worst in people - both the recipient and all those around him/her.
...........
+1 - I think it would totally screw over most people. The stories of ruined lottery winner's lives are legion.

Not to denigrate the comments, it just strikes me that coming into $100-$200MM is looked upon as a bad thing. Kind of like the deaf world that refuses implants that would allow them to hear.

Of course there is a downside, but please, let's be honest. So if I gave you $10K would you take it? $100K? $1M? But oh no, not $100MM.

 

[NW-Bound]

I normally do not bother with these huge jackpots and long odds. But this time, someone was getting up an office pool to play. I kicked in a few bucks as insurance against being the only one left there next year.

I used to organize a pool when I was working and the jackpot got big. Nearly everybody in the department bought in as they were afraid to be left behind.

And a pool increased the odd of winning, and I would be fine with 1/20 of a big jackpot.

 

[Major Tom]

Of course there is a downside, but please, let's be honest. So if I gave you $10K would you take it? $100K? $1M? But oh no, not $100MM.

Just because we'd take it doesn't mean that it would improve our lives any.

 

[haha]

Well, there are some very unselfish (or mentally unbalanced) people here!

Now for the other side....I would run to the cities best tax lawyers to figure out how to best structure the winnings, and how to cut in people like GF($3-4mm max) and my kids (more). I would find somebody with actuarial and bond training, like at Frank Russell Inc, as well as the lawyers for help there.

Then today as I was walking over to buy the winning ticket, I figured I might buy a penthouse in one of the new high rises down on 2nd Avenue in Seattle, and some nice car- maybe a Mercedes or Audi S8 if they still make them. Nothing wrong with a nice seasonal condo in Palm Springs, or maybe just rent.

Next I would build a relationship with a bond house that does good research, and a hedge fund or two.

And I would have quite a bit more clout after the win than before, or someone might have some 'splaining to do.

Ha

 

[NW-Bound]

Well, I think I can, no will, indulge myself like Ha, and still have some left-over for charities.

But I still need to buy some tickets first.

 

[W2R]

Then today as I was walking over to buy the winning ticket, I figured I might buy a penthouse in one of the new high rises down on 2nd Avenue in Seattle, and [...]

Oh but Ha, it's time to think BIG. Personally, I wasn't thinking about buying the penthouse of a nice new high rise... I was thinking about buying the entire building! One with two penthouses, and also with other very nice quarters. Then F could choose his condo or floor, and I could choose mine. The rest would remain empty. (I ran this by F at lunch, and he said OK, that would work, but he wants a country estate too for ham radio towers. I think he could just buy that out of his 8 figure annual stipend, no problem.)

I could pay someone generously to run the building, hire the security and doorman, coordinate maintenance, and so on, on the condition that everything necessary is done smoothly and nearly invisibly.

 

[aim-high]

I think the first thing I'll do when winning is post my hypothetical portfolio here and ask if I can retire yet. Hopefully a 0.01% withdrawal rate is sustainable.

Does Firecalc work with 9 digits?

 

[NW-Bound]

... I was thinking about buying the entire building! One with two penthouses, and also with other very nice quarters. Then F could choose his condo or floor, and I could choose mine. The rest would remain empty. (I ran this by F at lunch, and he said OK, that would work, but he wants a country estate too for ham radio towers. I think he could just buy that out of his 8 figure annual stipend, no problem.)

I could pay someone generously to run the building, hire the security and doorman, coordinate maintenance, and so on, on the condition that everything necessary is done smoothly and nearly invisibly.

It would feel very weird living alone in a big vacant building.

I suggest you and Frank take the top floors, then use the lower ones to run a homeless shelter.

 

[W2R]

It would feel very weird living alone in a big vacant building.

I suggest you and Frank take the top floors, then use the lower ones to run a homeless shelter.

Well, but I might prefer the second floor in case there was a city-wide blackout and the elevators failed. We can always run a homeless shelter elsewhere.

I don't think it would feel weird at all, as long as the security was absolutely bulletproof and nobody could get into the second floor or higher but us.

 

[NW-Bound]

Well, a centimillionaire can certainly afford a big backup diesel generator located in the basement or out back.

And I was just teasing about the homeless shelter.

But I would really feel weird in a big empty space.

 

[aim-high]

Waking Ned Devine . . . come in.

 

[W2R]

But I would really feel weird in a big empty space.

Good thing you and your DW don't live by yourselves in a very big European castle.

 

[NW-Bound]

I think I am getting to the point where I enjoy my smaller 2nd home more than my main home.

And then, I said this in an earlier post.

...
I would not mind helping some of our closer relatives. However, I have several cousins that I already avoid, who would come camping out in front of my home, I am afraid.

I guess I will sell my homes, pack up everything into my 25' motorhome and head to NM state campgrounds where they can't find me. Cell phones do not even work in some of those places.

Oh wait! I have to buy some tickets first before I can worry about the above scenario.

PS. By the way, lords living in European castles have lots of company. They employ many servants, and then constantly have guests visiting to entertain. They certainly do not live alone.