http://news.yahoo.com/s/ap/20100423/ap_on_re_us/us_powerball_winner_missouri (http://news.yahoo.com/s/ap/20100423/ap_on_re_us/us_powerball_winner_missouri)
How long do you think before this guy is broke?
Quote from: Trogdor on April 23, 2010, 01:47:45 PM
How long do you think before this guy is broke?
Depends on whether he takes the cash or the annuity. :P
IMO, one should always take the annuity, but most especially on larger jackpots. I think just about anybody would be fine living on 12 million a year for the next 20 years.
Three kids with two mothers? Makes me wonder how much will be going to child support. But he lacks sophistication so it might take him a bit to get used to spending money, and that is a lot. He apparantly is going to talk to people that "know more about money" then he does, so maybe he will get good advise and follow it.
Quote from: nathanm on April 23, 2010, 02:20:04 PM
Depends on whether he takes the cash or the annuity. :P
IMO, one should always take the annuity, but most especially on larger jackpots. I think just about anybody would be fine living on 12 million a year for the next 20 years.
The problem with that, from my understanding, is that it would not transfer if something happened to you, so if you took the annuity and walked out and got hit by a bus, then that first payment is all that would go to your next of kin. However, I personally would want the cash because I have big ideas that would not be able to be accomplished with just 12 mil a year. I might go broke trying to make a bigger fortune, but I would have fun along the way lol
Quote from: custosnox on April 23, 2010, 02:20:44 PM
Three kids with two mothers? Makes me wonder how much will be going to child support. But he lacks sophistication so it might take him a bit to get used to spending money, and that is a lot. He apparantly is going to talk to people that "know more about money" then he does, so maybe he will get good advise and follow it.
So what, my cousin's husband claims to "know more about money". I'm pretty sure that I would avoid money advice from him; thus I am a bit skeptical unless it is a
reputable CPA or financial planner.
Quote from: nathanm on April 23, 2010, 02:20:04 PM
Depends on whether he takes the cash or the annuity. :P
IMO, one should always take the annuity, but most especially on larger jackpots. I think just about anybody would be fine living on 12 million a year for the next 20 years.
Wrong again....Lump sum is the only way to go......
Quote from: TURobY on April 23, 2010, 02:25:28 PM
So what, my cousin's husband claims to "know more about money". I'm pretty sure that I would avoid money advice from him; thus I am a bit skeptical unless it is a reputable CPA or financial planner.
hense why I said maybe lol Someone could just tell him he should up and move to the hills, beverly that is.
Quote from: custosnox on April 23, 2010, 02:20:44 PM
He apparantly is going to talk to people that "know more about money" then he does, so maybe he will get good advise and follow it.
Either that or he'll go talk to a stock broker who will ensure he loses it all inside of ten years.
Hmm, if the annuity isn't inheritable, that would change my view.
Thing is, if you have big plans, the annuity provides a guaranteed income stream, so big plans can be accomplished with a little help from a bank loan if you really need a bunch of money up front. You can get a lot done with 12 million a year, anyway. One year of that would have been more than enough to get my FTTP business off the ground. I figured I needed about 4 million to build enough of a network to make it profitable enough to continue to expand. Never did find the 4 million, though. :'(
Breadburner, lump sum is pointless unless you're interested in having the entire sum exposed to trading losses, which I am not. If you have a lot of time to spend on it and are a reasonable intelligent person, you probably have pretty decent chances of earning a better return through investing, but most people don't see those kinds of returns. I saw what happened to my 401(k) in 2007 and 2008, thanks. I had about 30% in treasuries, which of course didn't lose any value, but the rest lost enough to halve the value of the entire account.
It would be nice if you'd explain your reasoning instead of just saying "wrong again."
Edited to add: And running the numbers through an NPV calculator, you're better off taking the annuity if you're bearish on returns. If you think you will earn more than 3.5% for the life of the annuity, you're better off taking the lump sum. I have little confidence in that at the moment. If you'd asked me 10 years ago, I would have taken the lump sum.
Life is short....take the lump sum....then start acting like a celebrity.
Quote from: nathanm on April 23, 2010, 02:31:58 PM
Either that or he'll go talk to a stock broker who will ensure he loses it all inside of ten years.
Hmm, if the annuity isn't inheritable, that would change my view.
Thing is, if you have big plans, the annuity provides a guaranteed income stream, so big plans can be accomplished with a little help from a bank loan if you really need a bunch of money up front. You can get a lot done with 12 million a year, anyway. One year of that would have been more than enough to get my FTTP business off the ground. I figured I needed about 4 million to build enough of a network to make it profitable enough to continue to expand. Never did find the 4 million, though. :'(
Breadburner, lump sum is pointless unless you're interested in having the entire sum exposed to trading losses, which I am not. If you have a lot of time to spend on it and are a reasonable intelligent person, you probably have pretty decent chances of earning a better return through investing, but most people don't see those kinds of returns. I saw what happened to my 401(k) in 2007 and 2008, thanks. I had about 30% in treasuries, which of course didn't lose any value, but the rest lost enough to halve the value of the entire account.
It would be nice if you'd explain your reasoning instead of just saying "wrong again."
Edited to add: And running the numbers through an NPV calculator, you're better off taking the annuity if you're bearish on returns. If you think you will earn more than 3.5% for the life of the annuity, you're better off taking the lump sum. I have little confidence in that at the moment. If you'd asked me 10 years ago, I would have taken the lump sum.
Well, when I say big plans, let's just say I would have close to a 1/4 of it reinvested within five years, and at least 1/10 blown on stuff that I would want to just blow it on (I really like exotic cars lol). I have thought about it on the occasion that I buy a ticket and figure I could account for these idea's and still make sure I put back enough to fall back on if everything blew up in my face so that I could live comfortably in a savings account or some other low risk situation. Since I don't know about investments as far as high yield accounts, stocks and so forth I would most likely educate myself more on these and seek the advice of someone who I can trust that would know more to help me set up something. It's always good to have a backup plan.
However, someone like this guy has a pretty low level of sophistication and has a good chance of living very nicely off of the annuity while placing at large percentage in low and high yield accounts, as long as he doesn't let someone sucker him out of it. You know what they say about a fool and his money.
I think cash option after taxes in Missouri works out to about $86 million. The winner is 29 years old.
My advice to him is to put it all in a tax-free bond and get 6% and pay the gubmint back 2% for a after tax income of 4%. This investment would pay interest of $9,500 a day.
Have that money put into a bank account for personal shopping. Take out $1 million each year for Christmas and buy something big.
You would never have less than $30 million in the bank until the day you died.
Quote from: nathanm on April 23, 2010, 02:20:04 PM
Depends on whether he takes the cash or the annuity. :P
IMO, one should always take the annuity, but most especially on larger jackpots. I think just about anybody would be fine living on 12 million a year for the next 20 years.
Then you sell the annuity for 150 million!
Ponder and I were talking about this last night- if you won, you'd be best to establish a trust so that you didn't have to reveal your identity. That's what the Powerball winner in Broken Arrow did.
Lump sum is the only way to fly on it. I do agree, this guy has the makings of a five year millionaire, just like others before him.
Quote from: Conan71 on April 23, 2010, 04:30:20 PM
Ponder and I were talking about this last night- if you won, you'd be best to establish a trust so that you didn't have to reveal your identity. That's what the Powerball winner in Broken Arrow did.
Lump sum is the only way to fly on it. I do agree, this guy has the makings of a five year millionaire, just like others before him.
I'm too lazy to set up a trust to do so, and too impatient. I would be at the Lottery commision the day after the drawing, waiting on the front step with the ticket when they opened the door. But then, if I did set up a trust it wouldn't matter because it would be kind of hard not to notice me going from dead broke to living in a big house with nice cars over night and making a lot of local investments. I would just learn to smile at people asking for money and politely close the door in their face, especially if they are related to me.
Quote from: custosnox on April 23, 2010, 04:36:22 PM
I'm too lazy to set up a trust to do so, and too impatient. I would be at the Lottery commision the day after the drawing, waiting on the front step with the ticket when they opened the door. But then, if I did set up a trust it wouldn't matter because it would be kind of hard not to notice me going from dead broke to living in a big house with nice cars over night and making a lot of local investments. I would just learn to smile at people asking for money and politely close the door in their face, especially if they are related to me.
Many five year millionaires before you have said that.
Quote from: Conan71 on April 23, 2010, 04:44:02 PM
Many five year millionaires before you have said that.
Oh, I'm not saying I wouldn't fall into that group in the end, though I would try not to. but even if I did, I would enjoy those five years. However, I do have some ideas for reinvestments that I think would keep me out of the poor house in the end. As far as people knowing I have the money, the primary worry about that is people coming for handouts and people trying to scam me. I don't like people and have developed an immunity from guilt after my daughters were born, and I don't trust anyone, so I think I'll be good on those fronts. :D But all of this is nor not unless one of those 10 times a year that I play actually pans out and wins, which I don't seriously entertained.
Let me hold $10 mil of that for you and live off the re-investment income. I'll make sure you at least have that $10mm to fall back on... :D
Ha, remember the don't trust anyone thing? My two best friends that I've known since middle school and high school don't even get that kind of money if I were to win (actually, I'll offer them a cool mil and never get anything from me again or go into business with me for a good salary). It will be hard for me to trust the bank to hold it for me.
Quote from: Conan71 on April 23, 2010, 04:30:20 PM
Ponder and I were talking about this last night- if you won, you'd be best to establish a trust so that you didn't have to reveal your identity. That's what the Powerball winner in Broken Arrow did.
Lump sum is the only way to fly on it. I do agree, this guy has the makings of a five year millionaire, just like others before him.
Problem with that Conan, is that not all states have that luxury if you win the lottery. Oklahoma has that option (to not disclose the name of the winner). Most make you disclose your identity before you can claim a large prize. And it can't be a proxy identity (such as a trust).
I believe Oklahoma is one of only a few states to allow a trust to claim a winning ticket.
I am against this practice.
How do we know the state (or powerball) or lottery employees aren't just keeping the money? They can easily create such a trust and hide their theft.
Quote from: RecycleMichael on April 23, 2010, 11:30:34 PM
I believe Oklahoma is one of only a few states to allow a trust to claim a winning ticket.
I am against this practice.
How do we know the state (or powerball) or lottery employees aren't just keeping the money? They can easily create such a trust and hide their theft.
I think in this case though, RM, the benefits (freeloaders, a multitude of requests for who knows what) outweigh the risks.
I am not disagreeing that it is the smart move. I just don't think it should be legal.
What safeguards are there?
I dunno about the specifics of how to take the money, but he and his children and girlfriend are pretty impressive people. All the children want are things that most children have like bicycles, etc. He doesn't seem to have become arrogant since he's not even sure if he'll quit his job. For his own sake, he'd better consider it for his own safety. I'd also worry about the safety of his children and his girlfriend. There's sure to be people who would kidnap for a huge ransom and they're not safe.
It's good to hear he already has a girlfriend or he'd go through life not knowing if he was truly loved or not. I imagine a lot of girls would be willing to be his g/f now who wouldn't have given him a second look in the past. It's great to hear a regular, common person with a lot of humility won this.
People who win, or get large sums of money and who are not use-to that kind of money more offten than not blow it all with in three years or so they say. The poorer you are the faster the large sum goes. They say many people who won huge amounts in the World Trade Center law suit are now broke, The guy who won a million dollars on the TV show "Survivor" and did not pay taxes on it blew all his winning in under a year. Rodney King who got $3.5 million dollars in a police beating law suit is also broke today. They mentioned a story of a homeless guy who got $100,000 and lived like a king until it was gone and he was back on the streets. It's a intresting thing to study, I heard about this on a business radio talk show about investing.
Quote from: RecycleMichael on April 24, 2010, 12:06:55 AM
I am not disagreeing that it is the smart move. I just don't think it should be legal.
What safeguards are there?
Powerball is a conglomeration of, what 34 states? Too many checks & balances for theft like that to happen.
Quote from: Conan71 on April 26, 2010, 12:40:11 PM
Powerball is a conglomeration of, what 34 states? Too many checks & balances for theft like that to happen.
And not only that, the law is based from the state law. There is no separate law dictating what is disclosed between the state-run lottery proceeds and the state subscribers to a national conglomerate.
Quote from: nathanm on April 23, 2010, 02:31:58 PM
If you'd asked me 10 years ago, I would have taken the lump sum.
How about 15 or 20 years from now?
Quote from: Hoss on April 26, 2010, 12:50:07 PM
And not only that, the law is based from the state law. There is no separate law dictating what is disclosed between the state-run lottery proceeds and the state subscribers to a national conglomerate.
Yes. The Oklahoma Lottery Commission verifies the ticket and releases the name of the winner, be it a person or a trust. Whomever they certify is the winner gets the check.
What stops the Oklahoma Lottery Commission from making up the name of a trust that they then secretly all benefit from?
Quote from: RecycleMichael on April 26, 2010, 01:01:59 PM
Yes. The Oklahoma Lottery Commission verifies the ticket and releases the name of the winner, be it a person or a trust. Whomever they certify is the winner gets the check.
What stops the Oklahoma Lottery Commission from making up the name of a trust that they then secretly all benefit from?
There's a paper trail with the ticket, RM. There's a computer system which matches the winning number to a purchased ticket. Someone at the lottery board couldn't make up a winning ticket after the fact.
Quote from: Conan71 on April 26, 2010, 01:07:24 PM
There's a paper trail with the ticket, RM. There's a computer system which matches the winning number to a purchased ticket. Someone at the lottery board couldn't make up a winning ticket after the fact.
That is where we disagree. I believe that computers CAN be manipulated and if the there is enough money, WILL be manipulated.
Why do you not trust government run health care but do trust government run lottery?
Quote from: RecycleMichael on April 26, 2010, 01:14:30 PM
That is where we disagree. I believe that computers CAN be manipulated and if the there is enough money, WILL be manipulated.
Why do you not trust government run health care but do trust government run lottery?
As I understand, Powerball is not a government-run lottery, it's an alliance of state lottery commissions who run it.
You have 32 other member states of the PB system with a vested interest. To date, has the Powerball or Lotto America been defrauded?
"Myth #8: Because state governments benefit from lottery proceeds, they can't be trusted to regulate their industry.
We trust states to make their own tax policy-and many other decisions regarding their citizens-so why shouldn't states be trusted to regulate their own lottery organizations? There is nothing to hide. Lottery files are public record and open to scrutiny by the media and by the citizenry. Lottery board meetings and legislative hearings also are open to the public. And these state lottery proceedings are much more accessible than those of federal regulatory agencies.
Myth #9: There is no assurance that lottery drawings are conducted fairly.
The state lottery industry is one of the most scrutinized industries that ever existed. Security has always been of highest priority in selling lottery products and in conducting lottery drawings. A high level of security and public drawings are what separate state lotteries from, and sets them above, numbers games sold on the streets.
Using state-of-the-art draw machines and televising official drawings are means employed to ensure that every player has the same chance to win. For instant games, the lottery industry requires secure printing facilities and controlled distribution; the industry also is moving in the direction of bar coding and all electronic validation equipment."
http://www.musl.com/musl_info.html
"They" got to Conan.
Who knows where they will go next.
Too late for me, but this hat will keep you safe, my friend:
(http://4.bp.blogspot.com/_VPXmxeZVJUY/StNYEbaZ19I/AAAAAAAAA1g/vnW_2Ta9Mn4/s400/tinfoilhat.jpg)