Winning The Lottery.

[SanFranciscan]

I read a recent report about lottery winners who spoke of how miserable winning the lottery had made them. As you can imagine, they were not getting much sympathy from people who were posting comments about that article.

How would you protect yourself if you won the lottery? I realize that that can be difficult since the lottery promoters are very eager for as much publicity as possible, but I do think that the problem with winning the lottery is that everybody knows about it. I do not buy lottery tickets, but I definately think that I would go into hiding awhile if I ever did buy a ticket and win.

Even if you are willing to share your good fortune, could you enjoy it if you were constantly being approached by people with one sob story after another? I don't think that I could.

 

[Saphire]

I think you bring up a fascinating topic. I often will watch those stories of what happens to big winners. It amazes me that people can end up with little after winning millions. I don't think most people really understand the negative stuff that can happen when becoming an overnight multi millionaire.

I wouldn't want to win more than a million, because I think trouble would start right away if you won 10 million or more. For instance, how much would you give to your siblings? Would you stop there or give to your best friends, cousins, good neighbors? And then there would be all those people after you, with good causes or big needs or just wanting a piece of the action. My privacy would be invaded, can you imagine the calls and requests from strangers? I also think I would become distrustful of people's motives. I don't want to live like that.

So I don't play those games with big jackpots. In fact, I don't play at all. I have enough challenges in my life without having the responsibility of millions of dollars, lol.

 

[ferris198]

From personal experience, I can tell you that having extra money can be difficult.
My mother passed away a year ago, and my brother spent all of his inheirtance within months of her passing.
He is now out of money, and unemployed, and constantly asking me for money.
It has gotten to the point where I am within full legal rights to lay criiminal harrasment charges, and get a restraining order.
It is not a pretty siuation.

 

[Cheshire Figment]

1. I would no longer peel or steam off uncancelled postage stamps.

2. When dining out, I would no longer agonize over the relative value of one appetizer over another on a dollars per ounce basis.

3. I would no longer deduct the tax from my restaurant bill before I calculate the tip.

4. I would no longer begrudge the checkroom woman her tip.

5. I would no longer park my car five blocks away from a restaurant or hotel to avoid valet parking.

6. I would no longer walk across the street to avoid a street musician with his open guitar case obstructing the sidewalk.

7. I would no longer belong to any organization that required my presence at 8 o’clock or (shudder) earlier in the morning ... any morning.

8. I would no longer compare supermarket prices of tuna fish. Or cereal.

9. I would no longer purchase supermarket flowers.

10. I would no longer wait for my favorite brand of soda to go on sale or settle for a generic brand.

11. I would no longer buy the economy size of anything that tends to get soggy, go flat, or smell yucky toward the end of its life.

12. With respect to opened milk containers, I would no longer resolve doubt in favor of freshness.

13. I would no longer scrape the sides of peanut butter jars.

14. I would no longer precariously drain ketchup from one bottle to another.

15. I would no longer scrape melons to the rind.

16. I would no longer drink tap water.

17. I would no longer eat leftovers. Come to think of it, I would no longer place leftovers in my refrigerator. In fact I would no longer have use for plastic wrap or aluminum foil.

18. I would no longer put up with dull knives, dull scissors, or dull people at cocktail parties.

19. I would no longer borrow my neighbor’s snow blower. In fact, I would no longer personally remove snow from my driveway or anyone else’s. Or even the walkway.

20. I would no longer buy seats in the bleachers.

21. I would no longer be tempted to buy a monstrously large popcorn and drink at the movies merely because it’s the best value.

22. I would never again see the inside of a store whose last four letters are “MART”.

23. I would no longer buy my clothing out of season.

24. I would no longer wear jeans with holes in them (unless fashion designers made it clear that they looked coolest that way).

25. I would no longer check my watch before I began a long-distance call and every minute thereafter.

26. I would no longer fill up with the lowest grade of gasoline. And I would never again pump gas myself.

27. I would no longer keep toll receipts.

28. I would no longer keep a list of books to watch for – a year after publication – when they are scheduled to come out in paperback.

29. I would no longer reuse mouse traps.

30. Finally, I would no longer open any envelope on which Ed McMahon’s face appeared.

 

["Got Disney"]

All I can say is that I would rather be Rich and miserable that poor and miserable

 

[Cheshire Figment]

Actually I have given this thought over several years. The following are not in any particular order (other than the first two).

Even though there would be income taxes withheld, I would compute that year's tax and immediately send in an additional amount for Estimated Taxes so that I would not have to worry about it.

I would pay off the mortgage on my house.

There are several charities which I normally contribute to; I would send them additional funds.

I would purchase additional shares in stocks which I currently own.

I would put the bulk of the money into high-grade, tax-exempt, bonds.

I would automatically send checks for the largest amount allowed which will not trigger requirements for filing a Gift Tax Return (currently $13,000 per person) to various very close relatives including their adult children (and their spouses). For any non-adult children I would immediately contribute the same amount into education funds for them; if the parents had not set up such funds I would have them set up as education trusts.

At the beginnng of each year I would also send out the allowable maximums to give these relatives the entire year to use the money or have the value increase.

I would make sure that my will is updated because of my having a lot more money.

BTW, I would accept the cash option, rather than annuity.

And I would probably toss a large party for myself inviting all these relatives and many of my friends at WDW, with me picking up almost all the expenses.

 

[Acklander]

I'd just travel and party it away, so it's probably for the best that I don't win

 

[minkydog]

I never won the lottery, but I did come into a sizable inheritance a few years back and I've been pleased with how we've handled it. First, I paid off all our bills except the mortgage. Then i "splurged" on a used travel trailer and a tow vehicle. Then I planned and executed a cross-country trip for me and my family. I put over half the money in investments. I funded my family's emergency savings. I gifted my mother, who lives on a fixed income.

We still live in the same older house. We still shop at walmart and thrift stores. My kids still go to public schools. My only really reckless purchase was an 11 year old red Jeep Wrangler ragtop--that was spur of the moment, and I paid cash for it. Sweet! We are still the same frugal non-material people we ever were(*well, except for my Jeep!) only now we don't have to worry so much about our retirement.

Having a little chunk of savings allows me to take my kids on week-long camping trips. It has allowed me to take my DH on his dream vacation--4 nights in NYC. It allowed me to take my youngest son to a special needs overnight camp in the NC mountains. It is definitely better to have a lot of money than to have only a little money. Money can't buy happiness, but it can definitely make life easier.

 

[AlleyKat]

I read a recent report about lottery winners who spoke of how miserable winning the lottery had made them.

Most likely, what made them miserable was their inability to make choices that were in their best interest!

 

[ZephyrHawk]

The first person I would call after finding out I won the lottery would be my mom. Not to tell her my good luck, but to ask her the number of her financial planner. He would be the second person I called. I would set up a trust and place all the winnings in there so that I would only be able to retrieve a certain amount in any year, but would be set for life. Then I would go about my life exactly as I do now...possibly with a new car. Oh, and I'd quit my job, not because I think I wouldn't need it anymore, but because I hate it.

 

[maslex]

Oh, how I think of winning the lottery on a daily basis!!! LOL Here's what I think I would do. I'm sure if it ever happened though, we would actually have to sit down with each other and come up with a master plan, but here's what came to me.....

First, instead of handing out $$$ to relatives....I would pay off their mortgages...that way, they wouldn't have the option of blowing through a big wad of cash and keep asking for more. I would explain to them that this gift is a one time thing and I would not be their personal ATM. If the lottery amount won was big enough, I might throw them all a little spending cash on the side but nothing too extravagant, except my parents...I would give them enough so my dad could quit work (he has trouble walking around and stuff)

Second, I would also pay off our mortgage, get a new car (need one), pay off DH's truck, pay our CC bills off, get new furniture, new appliances, redo the inside of our house, set the kids up for college, buy a winnebago or something for traveling and then put some away for retirement.

I know this is all a dream for us and would never happen, but if it actually did, I'm sure we would hire a financial planner of some sort to help us out.

 

[The Mystery Machine]

Ah, have you seen a show recently about lottery winners? Most of the stories so far are balanced with good/bad. It was very recent, don't remember the name of the show.

One of the things that was sad was relationships with family. Some of them had to cut off contact because parent/siblings demanded money.

And surprisingly many of them said they wished they had not told their family and/or children.

However several were very grateful and did well with their money. So it is possible. There is HOPE.

I would only tell or dole out cash if the winnings were HUGE. I am talking 50+ million. Anything under that number would really take some thought as to how to proceed. I would seriously consider keeping my mouth shut and helping out family in an indirect fashion.

Under 50 million we would probably not change to much, except we would not be in debt, have savings, and max everything invested, etc..and travel.

Over 100+ million, we would probably dole out money to immediate family, upon receipt on of the money. I think you can give out money when the check is being cut to reduce tax burden. It would be hard to hide those kind of winnings.

I would probably buy my MIL's condo from BIL and buy my parents summer house instead of giving them money.

I would buy a house for my parents and charge them "rent". Not sure how I would give my parents money since they are in trouble with the IRS and in massive debt.

There would be problems winning right now with family for sure. Several of them are in dire straights due to the economy. That is really tough to think about the best plan of action. That is the reason we would keep our mouths shut and lie alot to help them if the winnings were under 50 mil.

 

[LuvOrlando]

I always wondered about what sort of Financial Advice the winners of large sums and even entertainment people get. Whatever they are hearing it isn't very good because they all seem to lose it. IMO, the best way to prevent that from happening would be to fist pay off my home and bills and then take the rest and create a trust with a big bank and pay myself, my DH and my kids a yearly salary out of that non-invadable trust. This protects our futures from general idiocy and lawsuits etc. In fact, my will for distribution of my Life Insurance sets up a trust for my kids with sums to be distributed at certain age markers with a few years between each one starting at 18, for a car and to start a new home then 21, then 25, then 28, then 30 they get the bulk to buy a home if they haven't already and of course it can be invaded in the case of education or medical needs.

Then to all the relatives etc I'd be able to say truthfully it's all in a trust, I can't touch it (and neither can they).

As for the happy/sad part I've known both happy and miserable rich and poor people. Sure a catastrophe can make even the happiest person sad for a while and a wonderful event can make even the most miserable person happy for a while but, like everything else, I think when the gloss of the new whatever finally wears off whoever we really are pokes through. I once read a study that followed people through life's ups and downs and they discovered that after about 6 months most people revert to wherever they were happiness wise before the event and I'd say life experience pretty much confirms that for me.

 

[EthansMom]

Studies have shown that many winners of large jackpots are broke within a number of years. They assume that $X Million dollars will last forever and spend, accordingly, giving large sums away to friends, family, and charities and spending even larger amounts for themselves on extravagant cars and homes.

If you won $10 Million, for instance: Let's say you opt for the immediate payout, which is roughly half of that $10 Million (it's only $10 Million if paid out in equal payments over 20 years). So, now the lottery commission is giving you a check for $5 Million. Then the government gets their cut, which again is roughly half.

You are left with $2.5 Million. That's still pretty dang good money. Except... you are 50 years old and quit your job as soon as you won the lottery. You and your wife decide to buy a house by the lake ($1 Million), a new car ($50,000), and go on a trip around the world ($20,000). You get home from that trip and take a look at your finances. You have roughly $1.4 Million left, no job, and approximately 40 years left to live.

Most financial planners recommend assuming that your retirement funds will supply you with no more than 4% of the principal during retirement. Using that figure, if you invested the entirety of that $1.4 Million, you'd turn off interest of $60,000 to live on. And that $60,000 would be taxable... so lets say an income of $45,000. Except, now you and the wife have no jobs, no employer-sponsored health insurance and you have the house taxes, car maintenance, etc...

Oh, and your friends and family are all hitting you up for "loans" since you won $10 Million.

I've read articles where lottery winners told of friends/family giving them a hard time for keeping their job and/or continuing to spend money wisely. In reality, the smartest first move is NOT to quit your job or spend lavishly, but to hire a good financial planner.

I recently saw an article about a lottery jackpot that was claimed months after it was won. The people that came forward to claim the pot were a family... older Mom and Dad, their daughter, and her husband. When asked what took them so long to claim the ticket, they said that they spent time consulting with a financial planner. I guarantee that only one of those family members purchased the ticket and the financial planner advised them to share ownership of the ticket, decreasing individual tax liability, avoiding estate taxes, and eliminating gift taxes. Smart.

 

[pirateofthecarolinas]

We would not go public with our win. We would set up a trust under another name.

 

[Tarheel Tink]

We would not go public with our win. We would set up a trust under another name.

Same here; would call a financial planner (and not too local so word wouldn't spread), a good trust attorney and I think another attorney. I wouldn't tell anyone (I say this now,lol) and threaten DH to keep quiet. After everything was secure and decided, then we would claim the ticket in a trust. We would change our will and not tell the recipients (human nature; don't want them getting excited every time we get the flu,etc. ).

I truly have no relatives I would assist or tell (trust me on this) but friends I have chosen for family would benefit. I've always wanted to donate a public community pool for my local small town and name it after my parents (who are deceased- THEY I would have heaped generosity on). We would do some home improvements and landscaping but no major life changes.

We would travel quite a bit more and DH would probably go to part-time or retire, depending on the amount of the win. I work part-time and would stay but would take LOADS more unpaid vacation time guilt-free!

 

[golfgal]

We would not go public with our win. We would set up a trust under another name.

Is that an option. I thought you had to agree to make your name public. If this is an option I would DEFIANTLY go this route. I would also cancel my home phone number immediately.

I would also consult with our planner and estate planning attorney before I claimed the prize. I would revise our will and trust accordingly. I am sure most of the money would go into investments that match our current investment strategy but I will put some in some fun accounts too.

People that say they will pay off mortgages, be careful with that because that amount is above the gift tax rate and you just subjected whomever you paid off mortgages for to a 48% tax rate on that amount. It isn't a good strategy-although it is a nice idea.

I have 2 siblings that I KNOW will be begging for money. They will not get a dime. I might consider giving some to my sister in the form of a trust IF she complies with some conditions (mainly getting her kids educated which she is not doing now).

Depending on how much we win we would give some to the kids' old school to either start a building fund or to pay for a new building. Our church would get a donation of some size. We would establish some scholarships.

I WOULD buy a new car and I would do some remodeling around our house. I would ensure that our money is invested to sustain through our lifetime but we certainly will enjoy that along the way too. Our first big, fun thing would be a trip to the Masters and/or the Rider Cup match.

 

[Planogirl]

I am pretty frugal by nature so I hope that I would remain that way. I'm also a private person and think that I could fend off those who want something.

All I know is that I'd like to have this problem!

 

[snarlingcoyote]

If we found out we'd won the lottery we'd:

Call our lawyer
Call our financial planner

And ask for a trust to be set up. Depending upon the amount, I'd likely just want the interest for X years and then start drawing on the principal. The house would get paid off first, and we'd purchase a couple of new toys (his 'n her Boxsters, I imagine) before we tucked the money away where we couldn't touch it.

After that, it would be a question of how much money we had each year. We might quit our jobs and go to work in our "dream" fields - which, while our avocations, pay about half of what we each make in our current jobs. We might keep our jobs and just enjoy being able to help our families or buy new toys/have great trips occasionally.

I think I will always be a thrift store/garage sale gal, and I will always look for the best bargains on things - that's just how I roll. But it would be nice to be able to go to Disney whenever I feel like it, instead of having my pin money account to save up for it or trying to budget in a donation to a worthwhile charity. It would definitely be nice to be able to help my dear relations out in tangible ways - like paying for their college tuitions or whatnot.

 

[Carly_Roach]

...only one of those family members purchased the ticket and the financial planner advised them to share ownership of the ticket, decreasing individual tax liability, avoiding estate taxes, and eliminating gift taxes. Smart.

That's exactly the agreement I have with my immediate family. Anyone who wins the lottery shares it out with the other four members, then everyone is responsible for their own financial planning and maintaining that money. We're all pretty responsible with money.

I wouldn't quit my job, although I might try to get DH to quit his because I fear his safety (police officer). I don't know that he would because he enjoys his job.

Other than paying off bills, putting more toward our favorite charities, maybe buying new cars and perhaps travelling more, I'm not sure that we'd change all that much. Our retirement would be secure, that's for sure. Family or friends asking for money would be decided on a case-by-case basis. We've never had a problem saying NO to people.

If they decide to cut off communication with us because we refuse to give them money, then that's their decision. We'd probably figure that we're better off without that relationship if money is the deciding factor.