half a billion (Page 3)

I have a very good friend that won the lottery when he was 19. $6M net.  They lived the dream for 20 years. They didn't save. 

In the 6 months after the lottery checks stopped (about 18 months ago) his wife moved out and left him (now with a plastic surgeon), he sold his lake house, sold his Vette, couldn't afford the regular house and moved into a 2BR apartment and now works as an event-setup-guy at a local college and lives paycheck to paycheck. 3 of his 4 kids have jobs because they have to (one's still in high school). Two of his kids live with him in the BRs and he sleeps on the couch. 

It happens. Funny part is - he's still as happy and content with life now as when he was throwing parties and livin' large. Shows there are a few ways to skin every cat. 

I'm fully aware that the odds of winning are absolutely, horribly against me winning. With that very prominently in mind, I still buy tickets and I write it off as an Entertainment Expense. I figure between MegaMillions and PowerBall, I spend $10 each week. That's two DVD rentals or less than going to see one movie at the theater (with nachos and a drink) (alone. with my GF it at least doubles the cost). Additionally, what I'd do with the money from a lottery win has changed over time. I like to think about all of the possible things I could do, and I research them. Where would I travel? I look up interesting places all over the world. Would I buy a sailboat? I research the different types of boats and what's involved with ownership. Where would I live? What kind of house? I end up with all kinds of almost-useless information and it entertains the heck out of me. For me, it's worth the $10/week.

So, what would I do? First I'd find an expert in hiding my identity. I want to make it VERY difficult for all of the scammers to find me. Then a personal assistant to field mail and phone calls to weed out the ones that are able to find me. The Personal Assistant would work closely with my accountant and investment counselor and I'd set up an annuity on my own. I figure with a conservative, relatively secure annuity I could receive around $200k every two weeks, just like a paycheck

Then I'd quit work. I know that I could easily keep myself busy, so there's no chance of boredom.

I've not figured out where I'd live yet, but I want a good university nearby so that I can get a Masters in Accounting, then maybe a Bachelors and Masters in History. I'd go to school part-time so that I could spend a lot of time working out and training. I'd need a personal swim coach in addition to a multi-sport coach.

I know what house I want (speaking of zombie-proof houses: http://www.designboom.com/weblog/cat/9/view/11219/kwk-promes-safe-house.html . I know that I'd like a QR Illicito built to my dimensions (clear-coat raw carbon, a Quarq PM, etc), and I'd like a BMW HP2 Sport to sit in my zombie-proof garage next to the R1200GS I already have. Then I'd get with Icon (http://icon4x4.com/)  to build a custom FJ60 Land Cruiser for me. 

And travel, of course. Djibouti, Prague, Namibia, the Antarctic, and tickets on Virgin Galactic for me and my brother (off the top of my head I don't know anyone else who would be interested). Skiing in Chile and Siberia, and I'd finally get some suits that fit correctly (Singapore?).

Yah, I'd take care of family and friends, but I'd be careful how I did it. My mother has too many "cousins" and I know they'd suddenly be my best friends.

And I'd skip buying the sailboat. Yah, I could hire someone to maintain it for me, but I'd rather just lease one when I wanted to go on a trip. Hire a crew and spend a couple of weeks on a big catamaran in the Adriatic once or twice a year!

In the meantime, I have to be at work in two hours, so I better get cleaned-up and have an early lunch. Fantasizing about winning the lottery won't pay off my student loans.

x2 on this.  I don't want to seem cheap but all the cousins you've never met will hit you with a sob story.  I'd probably drop off the grid for a year so maybe people thought I would be dead and would leave me alone.  Obviously I'd help my close family but if I never met you you're out of luck.  Even if I met you and thought the money would be gone like your money "earned" was I probably wouldn't help. 

Stock up on shotguns, rifle, you name it to protect myself from all the people trying to rob you like you would keep it all in your house. 

Change numbers and all that stuff so you couldn't be found. 

Everyone talks about how it's better to take the lump sum and invest it yourself.  True if you're good at that kind of thing.

But just putting *this* drawing in perspective, at 540 million, if you took the annual payment option it'd be about 21 million a year for 26 years.  Quite a lot more than $200k and you're somewhat protected from scammers

Granted, that's more money each year than with the annuity from a cash option, but for some reason I just don't care for that route as much. Since I won't be winning, it doesn't matter for me.

I just ran the numbers through an annuity calculator. The cash option, after taxes, put into a 60 year annuity at 2% return would provide about $300,000 every two weeks. That works out to $7,800,000 per year for 60 years, which provides for $468,000,000 total over the 60 years. I'm ok with that. Figure being taxed on the interest, not the principle because that's already been taxed, and you're still doing pretty damn good. At least I think so, others may have more expensive hobbies than I.

Why do you think it takes people often several weeks to come forward with the winning ticket?  Many of them are putting their ducks in a row to be sure they have a plan in place if they get "attacked" by the public.

I actually have a really small family.  And while I know that people would come out of the woodwork I would probably make a POLICY that if you ASK me for money (charities included) you won't get money.  Period.  I have to offer it to YOU.

So, I know a lot about tax free gifting.  You can give people up to $xx,xxx without them having to pay taxes.  But if you give someone $100,000, do they just have to report it on their taxes as income and pay for it?  I guess it would be worth it to give my sis $1M.  She'd have $800,000 instantly (assuming about a 20% tax rate...I mean, really...does anyone pay 25-28%?) rather than getting $26k-ish per year (roughly speaking if I gave her and her hubby the max tax free amount per year).  Though, I hate the idea of the government getting any more of my precious money than they have to!!!!

Yes, it's counted as income, anything above $13000. And anything above $350K (ish) gets taxed at 35%.

If you gave your sister $1M, she'd get $672,485 and the IRS would get $327,515.

Is that the initial tax amount and then when she files her taxes would it actually be taxed at the appropriate rate?  Or is that money no-kidding GONE?

Ah. Got it.

Although the IRS would still end up getting that amount, no?

So in order to give my sister $1M I would have to pay $1.3XXM?

Well, I love my sister, but I'm not giving the government money twice!  I would just give her the max tax free amount every year (and her hubby too).  And then I'd probably give my PARENTS the max tax free and have them then gift it on to my sister (since that would now be a gift from THEM and thus also tax free.  So, I guess I could give my sis and her hubby about $52,000/yr tax free, $65,000 if I get my grandmother in on it.  At $52k per year it would take me nearly 20 years to finally pay her $1M!  Oh, but if she has a KID I could give her ANOTHER $13k per year in the kiddos name.  That would reduce that 20 years down to 15 years, though, technically that $13k for the kiddo wouldn't be able to be used by my sis I don't think.

I wouldn't trust anyone else other than my parents and grandmother.  But you could realistically give someone unlimited money if you could get other people to gift it after you gift it to them.

There's always adoption

http://www.huffingtonpost.com/2012/02/01/man-adopts-girlfriend-_n_1247607.html

I just read that... $640 million as of noon today. 
I'm buying $5 or $10 worth... can't win if you don't play, eh? 

Exactly.

I entered the hgtv.com dreamhome giveaway (twice a day!  almost every day!) for the same reason.  SOMEONE will win.  That's a given.

Okay, so I guess someone might not win mega millions because you do have to have the right numbers, but for the dreamhome thing SOMEONE was going to win it when they did the drawing.