Winning the Lottery



  • Wouldn't mind winning $1.5 billion :satisfied:

    But didn't realize how much work it is after winning

    http://twocents.lifehacker.com/what-to-do-with-the-money-if-you-actually-win-tonights-1752573569


  • Service Provider

    meh, you can afford to find a trustworthy money manger (if they exist) to handle all that S for you. I just would hate waiting on the pool company to build my scrooge mc duck money pool



  • I read somewhere that like 46% of winners spend all their money within 5 years. If you won $1.5 billion and even took home $500 million after taxes, you'd have to spend $45k every day for 30 years to blow it all. How is that even possible?



  • @quicky2g said:

    I read somewhere that like 46% of winners spend all their money within 5 years. If you won $1.5 billion and even took home $500 million after taxes, you'd have to spend $45k every day for 30 years to blow it all. How is that even possible?

    Like this...
    http://myfirstclasslife.com/10-lottery-winners-blew/?singlepage=1

    However... this sounds like some sound advice...

    http://www.businessinsider.com/mark-cuban-advice-powerball-lottery-winners-2016-1


  • Service Provider

    @quicky2g said:

    I read somewhere that like 46% of winners spend all their money within 5 years. If you won $1.5 billion and even took home $500 million after taxes, you'd have to spend $45k every day for 30 years to blow it all. How is that even possible?

    Pretty easy. You grab a couple nice houses, a few nice cars, a boat and ..... whoa where did $500m go?


  • Service Provider

    Remember that Donald Trump has gone bankrupt twice, I think. And people revere him for being a business genius (he is not), but he does have gobs of rich friends and financial advisers and with all the benefits of a rich upbringing, rich parents, smart advisers, fame, etc. he can't even stop from losing it all. Admittedly, the average lotto winner is smarter than him, but unlike Trump these winners don't have an upbringing that taught them how to hold onto and make money.


  • Service Provider

    There is only one pool of people who truly win from the lotto... the 43% of people who never buy tickets. They consistently have a lower tax rate than the other 57%. They are the true winners.



  • @dafyre said:

    @quicky2g said:

    I read somewhere that like 46% of winners spend all their money within 5 years. If you won $1.5 billion and even took home $500 million after taxes, you'd have to spend $45k every day for 30 years to blow it all. How is that even possible?

    Like this...
    http://myfirstclasslife.com/10-lottery-winners-blew/?singlepage=1

    However... this sounds like some sound advice...

    http://www.businessinsider.com/mark-cuban-advice-powerball-lottery-winners-2016-1

    Wow #9 gets an allowance from his parents


  • Service Provider

    David had a bad drug habit, and a bad spending habit to go along with it. After David sold all of the material items he had purchased for more drugs, he went flat broke by 2006. Shortly after that, David passed away with no family or friends in sight. The saddest part? The fact that he had to be cremated against his wishes because no one around him would pay for his burial.

    Wait, let me recap:

    • Drug habit
    • Spent a long time in jail
    • Lost all possessions
    • Lost all of his money
    • DIED
    • No friends
    • No family
    • Cremated

    Of all of those things, how the F! did "cremated" become the SADDEST part!?!?!?!



  • @dafyre said:

    @quicky2g said:

    I read somewhere that like 46% of winners spend all their money within 5 years. If you won $1.5 billion and even took home $500 million after taxes, you'd have to spend $45k every day for 30 years to blow it all. How is that even possible?

    Like this...
    http://myfirstclasslife.com/10-lottery-winners-blew/?singlepage=1

    However... this sounds like some sound advice...

    http://www.businessinsider.com/mark-cuban-advice-powerball-lottery-winners-2016-1

    Interesting that #7 says any financial adviser would tell you to take a lump sum. Every other article I'm reading says not to do that.


  • Service Provider

    @quicky2g said:

    Interesting that #7 says any financial adviser would tell you to take a lump sum. Every other article I'm reading says not to do that.

    That's because random articles give bad advice. Basic financial sense is that the lump sum is way, way better. Financially speaking.



  • @scottalanmiller said:

    @quicky2g said:

    Interesting that #7 says any financial adviser would tell you to take a lump sum. Every other article I'm reading says not to do that.

    That's because random articles give bad advice. Basic financial sense is that the lump sum is way, way better. Financially speaking.

    Until you splurge and spend it all lol. Might be better for some people to get an "allowance" from the lottery every year.



  • @scottalanmiller said:

    @quicky2g said:

    Interesting that #7 says any financial adviser would tell you to take a lump sum. Every other article I'm reading says not to do that.

    That's because random articles give bad advice. Basic financial sense is that the lump sum is way, way better. Financially speaking.

    If you are good at following a budget, then yes to the lump sump. If you are not good at budgeting, then taking the yearly payments may be a better bet for you, despite the fact that your 156k a year would be worth less in 20 years than it is now.


  • Service Provider

    If you take the lump sum vs. the payout let's show some math....

    1. The taxes are about the same because they are at the max. So no tax advantage to the long term pay off.
    2. One allows you to invest, the other steals your money through inflation (unless you believe that there will be deflation over 20 years which has never happened in history but hey, if you are the betting kind...)

    So let's way you get $20m after taxes. That's one $20m payoff or 20 $1m payoffs.

    The lump goes straight into investments and ears roughly $2m a year in interest. In the FIRST YEAR you are making more in interest on the money than the annual payoff will be. You earn an extra $1 after the first year ALONE.

    Going into the second year, assuming both are investing, the lump person has $22m and the other has $1m. The year end revenue will be $2.2m vs .1m. The person with the lump sum is actually accelerating in revenue versus the person taking the long term payoff.

    It would be estimated that by the time that the payoff of $20m was completed, the lump person could have $80m or so, in the bank.


  • Service Provider

    @quicky2g said:

    @scottalanmiller said:

    @quicky2g said:

    Interesting that #7 says any financial adviser would tell you to take a lump sum. Every other article I'm reading says not to do that.

    That's because random articles give bad advice. Basic financial sense is that the lump sum is way, way better. Financially speaking.

    Until you splurge and spend it all lol. Might be better for some people to get an "allowance" from the lottery every year.

    That's why I said "financially" it is better. Just like all things, the things that are good for people who are smart are bad for ones that are dumb. This is the same logic that applies to money, college, buying a house, job hunting, whatever. Give a man enough rope and one man will use it to climb out of the hole, the other will hang himself. But the money itself is most beneficial in a lump, if someone chooses something other than long term financial success as their desired state is their own affair.



  • @scottalanmiller said:

    If you take the lump sum vs. the payout let's show some math....

    1. The taxes are about the same because they are at the max. So no tax advantage to the long term pay off.
    2. One allows you to invest, the other steals your money through inflation (unless you believe that there will be deflation over 20 years which has never happened in history but hey, if you are the betting kind...)

    So let's way you get $20m after taxes. That's one $20m payoff or 20 $1m payoffs.

    The lump goes straight into investments and ears roughly $2m a year in interest. In the FIRST YEAR you are making more in interest on the money than the annual payoff will be. You earn an extra $1 after the first year ALONE.

    Going into the second year, assuming both are investing, the lump person has $22m and the other has $1m. The year end revenue will be $2.2m vs .1m. The person with the lump sum is actually accelerating in revenue versus the person taking the long term payoff.

    It would be estimated that by the time that the payoff of $20m was completed, the lump person could have $80m or so, in the bank.

    That's assuming you use a managed company like Vanguard to handle your money. But your average Joe isn't going to be thinking about that right away. I personally would take the lump sum and invest most of it.



  • @dafyre said:

    @scottalanmiller said:

    If you take the lump sum vs. the payout let's show some math....

    1. The taxes are about the same because they are at the max. So no tax advantage to the long term pay off.
    2. One allows you to invest, the other steals your money through inflation (unless you believe that there will be deflation over 20 years which has never happened in history but hey, if you are the betting kind...)

    So let's way you get $20m after taxes. That's one $20m payoff or 20 $1m payoffs.

    The lump goes straight into investments and ears roughly $2m a year in interest. In the FIRST YEAR you are making more in interest on the money than the annual payoff will be. You earn an extra $1 after the first year ALONE.

    Going into the second year, assuming both are investing, the lump person has $22m and the other has $1m. The year end revenue will be $2.2m vs .1m. The person with the lump sum is actually accelerating in revenue versus the person taking the long term payoff.

    It would be estimated that by the time that the payoff of $20m was completed, the lump person could have $80m or so, in the bank.

    That's assuming you use a managed company like Vanguard to handle your money. But your average Joe isn't going to be thinking about that right away. I personally would take the lump sum and invest most of it.

    As long as you don't do any of the things those 10 giant losers did, you're probably better off. I'd try to diversify. I wouldn't want too much of my money in 1 area. Might even put a few million into bitcoin and see what happens.


  • Service Provider

    @dafyre said:

    That's assuming you use a managed company like Vanguard to handle your money. But your average Joe isn't going to be thinking about that right away. I personally would take the lump sum and invest most of it.

    You have to assume that they won't set it on fire. If their goal is to waste it, then both options are equally bad. Only the lump has the benefit of good options. Once you assume the worst then the lump becomes better again, because you would be assume that "that's only if the person taking the long term payout doesn't take a forward loan against it at predatory rates." We can always make up ways for people to have set the money on fire... the question is which provides the most benefit and the answer always comes out to be the lump - whether the person desires to invest or desires to party, the lump enables it better in both cases.


  • Service Provider

    @quicky2g said:

    As long as you don't do any of the things those 10 giant losers did, you're probably better off. I'd try to diversify. I wouldn't want too much of my money in 1 area. Might even put a few million into bitcoin and see what happens.

    $10m isn't really enough to start talking about diversification. $500m, sure. But diversification is generally just a financially unsavvy term for "bad investing." When most people talk about diversification they mean some stocks, some bonds, some weird stuff like lotto tickets or the horses.... but when financial people say it they mean "some blue chip, some financials, some venture capital, some emerging markets." They don't mean going to bad investments, but that's what diversification means to common folk.

    Some things, like bonds, are essentially guaranteed to be bad investments. That's not diversification, it's just throwing money away.



  • @scottalanmiller said:

    @dafyre said:

    That's assuming you use a managed company like Vanguard to handle your money. But your average Joe isn't going to be thinking about that right away. I personally would take the lump sum and invest most of it.

    You have to assume that they won't set it on fire. If their goal is to waste it, then both options are equally bad. Only the lump has the benefit of good options. Once you assume the worst then the lump becomes better again, because you would be assume that "that's only if the person taking the long term payout doesn't take a forward loan against it at predatory rates." We can always make up ways for people to have set the money on fire... the question is which provides the most benefit and the answer always comes out to be the lump - whether the person desires to invest or desires to party, the lump enables it better in both cases.

    Bigger pile of drugs and bigger bottles of booze

    0_1452790289485_scarface cocaine pile.jpg



  • @quicky2g said:

    @scottalanmiller said:

    @dafyre said:

    That's assuming you use a managed company like Vanguard to handle your money. But your average Joe isn't going to be thinking about that right away. I personally would take the lump sum and invest most of it.

    You have to assume that they won't set it on fire. If their goal is to waste it, then both options are equally bad. Only the lump has the benefit of good options. Once you assume the worst then the lump becomes better again, because you would be assume that "that's only if the person taking the long term payout doesn't take a forward loan against it at predatory rates." We can always make up ways for people to have set the money on fire... the question is which provides the most benefit and the answer always comes out to be the lump - whether the person desires to invest or desires to party, the lump enables it better in both cases.

    Bigger pile of drugs and bigger bottles of booze

    0_1452790289485_scarface cocaine pile.jpg

    I think that one qualifies as helping you to wind up on that list of 10, lol.



  • Wow Dan Bilzerian bought $100k worth of Powerball tickets. See here. 1 of the winning tickets is near where he lives.


  • Service Provider

    @quicky2g said:

    Wow Dan Bilzerian bought $100k worth of Powerball tickets. See here. 1 of the winning tickets is near where he lives.

    Which only goes to show, it is skill, not intelligence, that help you play poker.



  • @quicky2g said:

    Wow Dan Bilzerian bought $100k worth of Powerball tickets. See here. 1 of the winning tickets is near where he lives.

    So he bought 50,000 PB tickets... that brought his odds of winnning up to 2.2%


  • Service Provider

    @scottalanmiller said:

    If you take the lump sum vs. the payout let's show some math....

    1. The taxes are about the same because they are at the max. So no tax advantage to the long term pay off.
    2. One allows you to invest, the other steals your money through inflation (unless you believe that there will be deflation over 20 years which has never happened in history but hey, if you are the betting kind...)

    So let's way you get $20m after taxes. That's one $20m payoff or 20 $1m payoffs.

    The lump goes straight into investments and ears roughly $2m a year in interest. In the FIRST YEAR you are making more in interest on the money than the annual payoff will be. You earn an extra $1 after the first year ALONE.

    Going into the second year, assuming both are investing, the lump person has $22m and the other has $1m. The year end revenue will be $2.2m vs .1m. The person with the lump sum is actually accelerating in revenue versus the person taking the long term payoff.

    It would be estimated that by the time that the payoff of $20m was completed, the lump person could have $80m or so, in the bank.

    I hope you do not claim any kind of accounting knowledge, because that is a load of crap.

    1. The raw taxes may balance out to be similar, yes. But you get taxed again on the investment income when you invest that lump sum. So it raises the effect tax rate again.
    2. You are assuming that the lump sum is continually reinvested while the payout is not.
    3. A $2 million yearly return on $20 million is a 10% return. That is a crazy number to expect with typical low risk investing.

  • Service Provider

    Now, it is true that the best advice is always to take the lump sum. Investing smartly, you should always come out ahead of the annuity plans.



  • @JaredBusch said:

    Now, it is true that the best advice is always to take the lump sum. Investing smartly, you should always come out ahead of the annuity plans.

    Mark Cuban's advice from the link @dafyre posted was to NOT take the lump sum but seems like he's giving that advice assuming we're all dumb asses that will buy 2 mansions, 3 boats, a pile of drugs, 20 cars and an IHOP and cross our fingers we can live off IHOP profits for the rest of our lives.


  • Service Provider

    @quicky2g said:

    @JaredBusch said:

    Now, it is true that the best advice is always to take the lump sum. Investing smartly, you should always come out ahead of the annuity plans.

    Mark Cuban's advice from the link @dafyre posted was to NOT take the lump sum but seems like he's giving that advice assuming we're all dumb asses that will buy 2 mansions, 3 boats, a pile of drugs, 20 cars and an IHOP and cross our fingers we can live off IHOP profits for the rest of our lives.

    Well most of 'Murica should probably take that advice.


  • Service Provider

    @quicky2g said:

    @JaredBusch said:

    Now, it is true that the best advice is always to take the lump sum. Investing smartly, you should always come out ahead of the annuity plans.

    Mark Cuban's advice from the link @dafyre posted was to NOT take the lump sum but seems like he's giving that advice assuming we're all dumb asses that will buy 2 mansions, 3 boats, a pile of drugs, 20 cars and an IHOP and cross our fingers we can live off IHOP profits for the rest of our lives.

    The problem with assumed bad advice is that you assume someone will take your advice on the lump but not on the investing. It's a fundamentally flawed logical stance. If you are giving advice, you should give good advice. Not give bad advice in the hopes that you gave just enough wrong that they will screw up and fix things by not listening to you.



  • I long ago devised a plan that might or might not work... Of course it's a moot point since I never win.

    Set up trusts for the kids, trust to live off, account for whatever expenses, retirement (as I won't get to retire till about 8 years after I"m cremated), fund to work on paying off any debt (like the house). look at building another house,...

    I'd keep working. I like those I work with to much. Maybe sub-hire someone so I can take a weekend off here or there.....Like now when I'm hearing a load of stomping and screaming from upstairs - my guess is someone is playing XBox...


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