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Are you married? Have children? Or Grandkids? Do you have any causes you love to give too. Now imagine having $100,000,000. One could set up trusts for loved ones. One could set up trusts to a favorite cause.
At $10 million, if one uses the 4% rule, I could live at $400,000 per year for a budget and likely never run out of money. In fact, there is a substantial chance that I'd die with more than $10 million in that case. (yes, we can argue around the details of the 4% rule, but it's close enough for this discussion).
I do have a kid, but suffice to say that "several million" would be PLENTY of money to inherit and/or receive during lifetime. As for philanthropy - sure, more money would be nice for that, but that's icing on the cake, as it were. Again, at $10 million lump sum, I could likely have plenty left over for charity (or I could do a Charitable Lead Annuity Trust to kill two birds with one stone re: philanthropy AND assets to descendants, but that's getting technical).
In simple terms - I'd rather have a 1 in 10 million (assuming $1/ticket) chance of winning $5 million, say, than a one in 200 million chance of winning $100 million.
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But I also think she'd have been able to do that IF they'd all three said the same thing, at new news conference.
-- "This pot was so big we went in on it together."
-- "Yeah we always pool our money for big pots."
And besides THEY shouldn't be doing ANY talking. They're lawyer should be. But whatever.....
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It doesn't matter what you say to the press, so much as what you say to the IRS agents. Ask Martha Stewart what happens if you lie to Federal agents?
At this level, the "highest tax consequences" are virtually non existent from an income tax perspective. Everything over about 500K is taxed at the top marginal level of 39.6%. <>
Regarding "how will she manage for a month or two" - as another poster noted, is there any indication she's in dire financial straits?
No, and I'm sure her bank would be happy to bring out their best song and dance man to arrange a loan of a million or so to get her by. ;-)
Doesn't she also get hit up for the 3.8% ACA tax? Is there an upper limit on that one?
"It's complicated"
At $10 million, if one uses the 4% rule, I could live at $400,000 per year for a budget and likely never run out of money. In fact, there is a substantial chance that I'd die with more than $10 million in that case. (yes, we can argue around the details of the 4% rule, but it's close enough for this discussion).
I do have a kid, but suffice to say that "several million" would be PLENTY of money to inherit and/or receive during lifetime. As for philanthropy - sure, more money would be nice for that, but that's icing on the cake, as it were. Again, at $10 million lump sum, I could likely have plenty left over for charity (or I could do a Charitable Lead Annuity Trust to kill two birds with one stone re: philanthropy AND assets to descendants, but that's getting technical).
In simple terms - I'd rather have a 1 in 10 million (assuming $1/ticket) chance of winning $5 million, say, than a one in 200 million chance of winning $100 million.
I'd be ok with 100,000,000 as much as 10,000,000. No I would not pack my garage full of Lamborghini's either if I won $100 million.
Of course i would take my chances to win 5 million when the odds are at 1 in 10 million, compared to 1 in 300 million for both the powerball and mega millions. I don't play the lottery all that much, so where is this chance to win 5 million dollars with those odds?
No, and I'm sure her bank would be happy to bring out their best song and dance man to arrange a loan of a million or so to get her by. ;-)
Doesn't she also get hit up for the 3.8% ACA tax? Is there an upper limit on that one?
"It's complicated"
IIRC, the 3.8% investment income surtax doesn't apply to lottery winnings (but don't quote me on that as it's been awhile since I looked it up).
And yeah, I'm sure she can get a loan or something. :-) The big finance firms that are trying to get assets under management (AUM) also tout the fact that people who give them a lot of cash to manage get really good loan rates/terms and superquick approvals.
Quote:
Originally Posted by MNTroy
I'd be ok with 100,000,000 as much as 10,000,000. No I would not pack my garage full of Lamborghini's either if I won $100 million.
Of course i would take my chances to win 5 million when the odds are at 1 in 10 million, compared to 1 in 300 million for both the powerball and mega millions. I don't play the lottery all that much, so where is this chance to win 5 million dollars with those odds?
Some of the state lottos (or even smaller state lottos) can get very good odds at times. Illinois had (maybe they still have) a "little lotto" - odds to win were about 575,000-1, and occasionally the prizes climbed well above that (I think one time it got over a million). I played the TX state lotto a few years ago when the jackpot was around $20 million and the odds of winning that were about 25 million to one. Of course there's a still a chance of multiple winners to divide up the prize, etc. Back when I was in charge of our office lottery pool I'd use the BINOMDIST function in Excel to guesstimate the chances of 1 or 2 or 3 or however many winners (or no winner at all). It's pretty simple math once you think about it.
My point is even given the same "expected value per ticket" (in this case, 50 cents on the dollar, which probably isn't far off with many of these lotteries once the jackpot builds up), I'd go with the "better" odds of winning a "generally smaller" jackpot because the first 3 or 5 or 10 million is worth far far more to me than the next 90+ million. Again, it's all about diminishing marginal utility. Sure, a gazillion dollars is great and all and I'd find various good works to put it towards, but in practical terms, most of us hit most of our "financial life goal" markers long before that. So I'd rather play a lottery with really really really low odds of winning, but still get almost all the practical benefit, than one with really reallyreallyREALLYREALLY low odds of winning.
My point is even given the same "expected value per ticket" (in this case, 50 cents on the dollar, which probably isn't far off with many of these lotteries once the jackpot builds up), I'd go with the "better" odds of winning a "generally smaller" jackpot because the first 3 or 5 or 10 million is worth far far more to me than the next 90+ million. Again, it's all about diminishing marginal utility. Sure, a gazillion dollars is great and all and I'd find various good works to put it towards, but in practical terms, most of us hit most of our "financial life goal" markers long before that. So I'd rather play a lottery with really really really low odds of winning, but still get almost all the practical benefit, than one with really reallyreallyREALLYREALLY low odds of winning.
It's also $2 per ticket, so the hypothetical "what if you could buy every number combination" thing means you'd have to spend about $584 million (of after-tax dollars) to win a pre-tax lump sum that, in this case, was about $480 million.
I'm not a fan of the multi-state lotteries because of the extremely long odds and "diminishing marginal utility" - in other words, my quality of life at about a $10 million lump sum jackpot will be awfully good, and will not be appreciably better with a $100 million (or whatever) jackpot. In simple terms, how many Lambos does one really need in their garage?
$10 million vs. $100 million or even $300 million can definitely make a difference. At $10 million, I'd live the same life I'm living now but with more financial security. A $300 million lump-sum after taxes is the difference between paying for your kids/grand-kids college education and having scholarships and college libraries named after you. In theory a person could keep their life exactly the same, but even if you don't spend everything on material goods, you may be inclined to help people/organizations etc.
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