Mega Millions.....

[Pete J.]

I heard a pod cast from Freakonomics the other day about the odds of winning the lottery and it was quite interesting.  They took a look at it from a different perspective.  There was one lady in Texas that won it three times!  The odds against her were one in on septillion(a one with 17 zeros I believe).  But then they looked a the odds that someone would do that were one in 200 million.  From that perspective, the odds that someone will win is about 1 in 20.  

I suppose buying a lottery ticket could be seen as a waste of money, but I view it as entertainment.  No different than going to Vegas.  It's all in good fun as long as you see it that way instead of as a desperate attempt to save yourself financially. 

As to the money, well that is a different story.   If you take the lump sum and pay your 37% federal tax you are left with about $600,000,000.  Then depending on the state you live in you may have to take state income tax.  Now I'm lucky, California is one of the states that doesn't tax lottery winnings, so I would have that much in the bank.  

What I find interesting is most people don't have any concept of how much money that is.  I remember a finance teacher I had at Gonzaga said most people have the concept of money under $1000 only. Over that they just can't wrap their heads around it.  Example:  What if you were going to buy a house for $400,000 but the offer was for $410,000.  Most people wouldn't bat an eyelash at the difference.  However if that was cash on the table, they would certainly understand that. 

So, lets break down $600,000,000.  If you invested it at 5%(which for that sum would be very conservative) you would earn $30,000,000 in interest a year.  That is still to large for most people to grasp.  So let take it down another step.  That is $2,500,000 a month.  Still to large. down another step. $83,000 a day. Still pretty big. $3,470 an hour.  

Ok, so you could spent about $3,500 an hour every hour for the rest of you life and never touch the $600,000,000.  That million dollar condo overlooking the mediterranean in Italy?  Less than a half a months interest.  The Bugatti Veyron!  About 2 1/2 weeks.  Pay off all you bills including your mortgage?  A couple of days for most people. 

So is it fun to think about this?  Oh, heck yea.  Go broke buying lottery tickets? Nope, that is stupid, but it is ok to have a little fun and imagine such a life.

Edited October 22, 2018 by Pete J.

[Jantrix]

3 hours ago, Ace-Garageguy said:

Sounds like heaven to me. Seriously. Just need a rough airstrip and a capable bush-plane. 

Thanks Bill. It really is. Or rather, will be. The property was in a terrible state when we bought it and this entire first year has been clean up, restore water to the property, chicken coop, and goat pen. 

These are my neighbors horses in my front yard. Pretty groovy view.

[Jim N]

5 hours ago, Tom Geiger said:

 note that in my post I said 1.6 Billion was more than anyone could ever spend in a lifetime.

Tom, I don't want this to come across as argumentative, but Michael Jackson did.  Which, according to the news reports, was why he was planning to go on tour again.  He was broke.

ESPN did a 30 for 30 show called Broke.  It's about all of the athletes who made millions and blew it all.  It was largely because of the hangers on who brought them down.  Some of those athletes, Bernie Kosar in particular, said the best day was when he filed for bankruptcy.  He didn't have anymore money so everyone left him alone.  I think people really underestimate this and how hard it is to say "no".  As another person posted, this is why many lottery winners wind up in the same monetary state within a few years of winning the lottery as they were before they won.

On a much smaller scale, I see this about every 18 months.  We have a neighbor who has a 19 - 20 year old daughter.  The daughter has gone through 3 - 4 cars in the 5 years they have lived in the neighborhood.  Why?  Because some relative always buys her another car after she has destroyed the old one.  This kid has a sense of entitlement and the relative can't say "no".

[Xingu]

6 hours ago, Tom Geiger said:

 note that in my post I said 1.6 Billion was more than anyone could ever spend in a lifetime.

That is what I told my wife. She said I would just take it as a challenge.

[Xingu]

6 hours ago, Jantrix said:

My wife and I have a small 10 acre hobby farm. We'd likely start by buying up the forty acres north of us and thirty acres south of us. We'd go off the grid using solar and wind power. Make a deal with some neighbors for partial water rights to the creek that runs through my property. Get a half dozen beef cows and my wife a couple horses and all the toys we need/want.

My wife and I are doing something similar to this even if I don't win the lottery. Go to closing next month on a piece of property, so that this will be my view in retirement.

 

 

[SfanGoch]

Isn't that part of the Barkley ranch from "Big Valley"?

[NYLIBUD]

MEGA BILLIONS!!!!!.OMG....$200 worth of tickets is my limit.

[Jantrix]

3 hours ago, Xingu said:

My wife and I are doing something similar to this even if I don't win the lottery. Go to closing next month on a piece of property, so that this will be my view in retirement.

Outstanding. I dig it.

[Ace-Garageguy]

5 hours ago, Xingu said:

My wife and I are doing something similar to this even if I don't win the lottery. Go to closing next month on a piece of property, so that this will be my view in retirement.

Except for the colors, that looks much like the view from my Az. place. The trick will be living long enough to get moved and set up. 

[Rob Hall]

I'm not sure where I'd live if money were no object. I do like NE Ohio, wouldn't mind having some lake front property on Lake Erie.  But there are a few places on the West Coast that I wouldn't mind living also.   I want to stay in a major metro area where there is top-notch healthcare available, arts and entertainment, and a great variety of cuisine available.  Being near a major body of water is a must, done with really dry places.

Edited October 23, 2018 by Rob Hall

[SfanGoch]

I'll buy the north end of me neighborhood, evict all of the interloping transplants, raze every single dystopian, glass-faced, high rent hipsterrarium  hi-rise constructed in the last 15 years and have real affordable low rent housing built for the neighborhood. I might have enough left over for a slice and soda to celebrate.  

[peteski]

2 hours ago, Rob Hall said:

I'm not sure where I'd live if money were no object. I do like NE Ohio, wouldn't mind having some lake front property on Lake Erie.  But there are a few places on the West Coast that I wouldn't mind living also.   I want to stay in a major metro area where there is top-notch healthcare available, arts and entertainment, and a great variety of cuisine available.  Being near a major body of water is a must, done with really dry places.

Why try to decide where? With all that money you could own a properly at every location, and travel between them in your private jet. Come on - think *BIG*!   You could also afford the best of health care and your own personal team of doctors.

Edited October 23, 2018 by peteski

[NYLIBUD]

It's weird to say this perhaps,but I don't like when the jackpot is through the roof like it is now.Of course I want to win,but there's a part of me who is going to  hate the winner(,not bring me of course)I know that's kinda harsh,but that's how I feel,and suspect a lot of other people feel the same wayWhy them and not ME...No seriously,I'm just joking,good luck to everybody who played.I hope I win.Just being honest.Knock off so many things off my so called bucket list.

[Pete J.]

This pot is big enough that it wouldn't bother me to split it several ways!  Just saying!  Most of us could do very well with a basic jackpot of a single million. 

[NYLIBUD]

I know,I just hope that there isn't just one winner,you know (unless it's me of course).Know but I agree and hope that there are mulitple winners.

[Joe Handley]

12 hours ago, Pete J. said:

I heard a pod cast from Freakonomics the other day about the odds of winning the lottery and it was quite interesting.  They took a look at it from a different perspective.  There was one lady in Texas that won it three times!  The odds against her were one in on septillion(a one with 17 zeros I believe).  But then they looked a the odds that someone would do that were one in 200 million.  From that perspective, the odds that someone will win is about 1 in 20.  

I suppose buying a lottery ticket could be seen as a waste of money, but I view it as entertainment.  No different than going to Vegas.  It's all in good fun as long as you see it that way instead of as a desperate attempt to save yourself financially. 

As to the money, well that is a different story.   If you take the lump sum and pay your 37% federal tax you are left with about $600,000,000.  Then depending on the state you live in you may have to take state income tax.  Now I'm lucky, California is one of the states that doesn't tax lottery winnings, so I would have that much in the bank.  

What I find interesting is most people don't have any concept of how much money that is.  I remember a finance teacher I had at Gonzaga said most people have the concept of money under $1000 only. Over that they just can't wrap their heads around it.  Example:  What if you were going to buy a house for $400,000 but the offer was for $410,000.  Most people wouldn't bat an eyelash at the difference.  However if that was cash on the table, they would certainly understand that. 

So, lets break down $600,000,000.  If you invested it at 5%(which for that sum would be very conservative) you would earn $30,000,000 in interest a year.  That is still to large for most people to grasp.  So let take it down another step.  That is $2,500,000 a month.  Still to large. down another step. $83,000 a day. Still pretty big. $3,470 an hour.  

Ok, so you could spent about $3,500 an hour every hour for the rest of you life and never touch the $600,000,000.  That million dollar condo overlooking the mediterranean in Italy?  Less than a half a months interest.  The Bugatti Veyron!  About 2 1/2 weeks.  Pay off all you bills including your mortgage?  A couple of days for most people. 

So is it fun to think about this?  Oh, heck yea.  Go broke buying lottery tickets? Nope, that is stupid, but it is ok to have a little fun and imagine such a life.

About 10 years or so ago I was watching a show about lotto winners and there was one from, I think, Kentucky they talked to that had one the biggest Powerball (I think here too, been too many years) just before they city was going to shut off his water. Because of the sudden fame of winning he kept getting calls and letters to "help an old friend out" and decided that they needed to get someplace they wouldn't be easily found, which to him was where there were other rich, if not richer people. IIRC, he settled on Palm Springs and moved into a rather nice place there, but would still get letters addressed to KY Powerball Winner, and somebody still knew where to forward those letters at that time. One thing he had talked about was that he based his spending habits on the interest that he earned. IIRC his words correctly, "Say you get $3,600 a day in interest, try not to spend that much, then if you do buy something more than that, don't buy anything for the following day or two." For some reason, those two things have always stuck with me.......

[Deuces]

16 of us here at work are in for 10 bucks each.... That's 80 chances of winning..... Hope we win!!! ??

[SfanGoch]

9 hours ago, Pete J. said:

This pot is big enough that it wouldn't bother me to split it several ways!  Just saying!  Most of us could do very well with a basic jackpot of a single million. 

Depends on where you live. Cost of living, tax liabilities etc. can eat that up quickly. One can't find a mediocre house for that in my neighborhood anymore.

[Pete J.]

10 hours ago, Pete J. said:

This pot is big enough that it wouldn't bother me to split it several ways!  Just saying!  Most of us could do very well with a basic jackpot of a single million. 

 

49 minutes ago, SfanGoch said:

Depends on where you live. Cost of living, tax liabilities etc. can eat that up quickly. One can't find a mediocre house for that in my neighborhood anymore.

With a million it wouldn't be all that difficult to get out of town  and find a nice home somewhere that it's far less expensive and live comfortably.  I live in SoCal and am retired.  Houses here are far from cheap but we get along quite well, but paying off our mortgage would take far less than a million and leave a big chunk left over.  Paying that off would make things very comfortable. 

[Rob Hall]

10 hours ago, Pete J. said:

This pot is big enough that it wouldn't bother me to split it several ways!  Just saying!  Most of us could do very well with a basic jackpot of a single million. 

Not me...I'm only 48, hope to live as long or longer than my Dad did.  $1m wouldn't last 30 years.. and I don't want to live out in the sticks. 

[Pete J.]

1 minute ago, Rob Hall said:

Not me...I'm only 48, hope to live as long or longer than my Dad did.  $1m wouldn't last 30 years.. and I don't want to live out in the sticks. 

So I ask you this, "would your life improve if you had an extra $50,000 to $100,000 a year?"  No, you may not be able to live on that all by itself where you are.   But with conservative investment over the next 30 years you could have that and still have the original million dollars when you are 88.  It's about being smart with the money.  

[Rob Hall]

9 minutes ago, Pete J. said:

So I ask you this, "would your life improve if you had an extra $50,000 to $100,000 a year?"  No, you may not be able to live on that all by itself where you are.   But with conservative investment over the next 30 years you could have that and still have the original million dollars when you are 88.  It's about being smart with the money.  

Well, $1m is nearly 7 years of salary to me (before taxes).  After taxes, it just doesn't feel like a lot to live on for 30 years.  Certainly enough to pay off the mortgage and current bills and add to my nest egg.  Feels like I'd need more long term to be able to drop out of the corporate life at my current age...

Edited October 23, 2018 by Rob Hall

[Jantrix]

10 hours ago, Pete J. said:

This pot is big enough that it wouldn't bother me to split it several ways!  Just saying!  Most of us could do very well with a basic jackpot of a single million. 

Very thoughtful, and quite true. After Uncle Sams bite, about 600k left. That would pay off the mortgage, refurb the house, erect a new barn, put up fencing, and otherwise set up my farm for success with 250k to be tucked away for retirement. The wife stays home and does the farm thing, I keep my job and work until retirement with no stress. Yep, 1 mil would do me.

[OldTrucker]

This morning I heard a neighbor telling another neighbor across the street that he put his whole paycheck into tickets for this drawing!!!

People are crazy!

[SfanGoch]

12 minutes ago, Rob Hall said:

Not me...I'm only 48, hope to live as long or longer than my Dad did.  $1m wouldn't last 30 years.. and I don't want to live out in the sticks. 

Ditto. I'm a born and bred city rat. Living someplace where the sidewalks are rolled up at sundown, or which would require driving miles to get something as mundane as a gallon of milk, ain't my church.

11 minutes ago, Pete J. said:

So I ask you this, "would your life improve if you had an extra $50,000 to $100,000 a year?" 

Heh, that's chump change around here. According to the NYC Dept. of Taxation & Finance, $50-100K qualifies as the bottom end of low middle income. $170-200K barely puts one in the middle class bracket. Everything is expensive. One has to be either extremely wealthy or dirt poor to get along here. The middle class working slob is stuck in the middle, screwed out of every available dime that the alphabet agencies can pull out of his pockets.That said, I wouldn't trade places with anyone living in comfortable, cozy Culdesacia.