We Really Do Stink at Math
@ElizabethWallace (12074)
United States
January 9, 2016 10:07am CST
The Powerball lottery total has risen to over $800 million. Yes, that is a bucket load of money. Of course, if you take the lump sum instead of having it paid out over many years, you will only get about $496 million. Then there are the taxes, both federal and state.
Where I live, that would mean that I would end up with about $300 million after all the deductions. Not to worry, I have a plan. I always have a plan. I make lists too. It’s the way my brain is wired, and works well for me.
Most people in line to buy tickets for the drawing don’t have a plan. But what is worse, they do not have a clue just how much money $300 million really is. When asked what they would do, many said things like buy a new car or redecorate my house. Others said, take a vacation. No wonder that after five years of winning a huge amount in the lottery over half the winners are broke. Americans really do stink at math.
Even my very intelligent sister said she would have no idea what to do if she won, so she might not buy a ticket. (Notice I said a ticket, not hundreds of dollars’ worth). I could not let that happen, so I chatted with her, and we created a plan.
Part of me enjoys hearing the silly things people say they would do if they became instant multi-millionaires. Another part of my brain is appalled. How could they not understand how much more money this is than they have now? How could they not see that this is “legacy” money? Sure with one or two million dollars, you could splurge and put the rest in the bank, but with hundreds’ of millions, you need a plan.
Step 1: Hire a great tax attorney (not just an accountant).
Step 2: Hire a great financial planner (not just your cousin Vinny).
Step 3: Divide the money into categories, family gifts, real estate, investments, travel, charity, etc.
Step 4: Create a plan for each category and stick to it.
Step 5: (Or maybe this is really Step 1) Tell no one you are filthy rich. If they see you spending more than before, tell them you came into some money. But do not tell them that it was $300 million.
What would you do with a huge windfall?
30 people like this
30 responses
@marlina (154165)
• Canada
9 Jan 16
First of all I would like to know if your name and photo HAS TO be published? If so, it would be pretty hard to keep it secret.
Before I would collect the money I would make my plan of moving out of here quietly before the media and "beggars" figure out that there is no one living at this address.
Number 2= hire a tax attorney and making plans to use and give some money intelligently to my own favorite hospitals and other Non profits.
5 people like this
@ElizabethWallace (12074)
• United States
9 Jan 16
It depends upon the laws in the state where you live whether your name must be made public. In California, it is required. So that means you cannot hide your name, but you can hide your face. Add, remove your name and photo from social media before coming forward as the winner.
2 people like this
@marlina (154165)
• Canada
9 Jan 16
@ElizabethWallace Very good advice about removing name and photo from social media.
2 people like this
@ElizabethWallace (12074)
• United States
10 Jan 16
@marlina No one needs to know where you are.
1 person likes this
@LadyDuck (458976)
• Switzerland
10 Jan 16
@ElizabethWallace Absolutely, 4 or 5 millions will be necessary to buy a decent apartment, but then you do not have to pay taxes, so all the rest is for you only.
2 people like this
@ElizabethWallace (12074)
• United States
9 Jan 16
$300 million is enough for several life-times, even living in Monte-Carlo.
2 people like this
@crazyhorseladycx (39515)
• United States
10 Jan 16
faint. when i regained consciousness 'n my sanity, i'd prolly follow most'f yer steps. the majority'd prolly be given away.
'course that could change if'n i could buy up 'nough open land to start 'n operate a horse sanctuary....'n a free camp fer young'uns with disabilities (adults's well)
3 people like this
@crazyhorseladycx (39515)
• United States
10 Jan 16
@ElizabethWallace jest warms the heart, don't it? 
2 people like this
@ElizabethWallace (12074)
• United States
10 Jan 16
I love seeing all the charity work people here want to do.
2 people like this
@ElizabethWallace (12074)
• United States
10 Jan 16
@crazyhorseladycx Yes, it does. I love what the Gates are doing with their money. If someone is going to get rich, I hope it is someone with a heart.
2 people like this
@TheHorse (206374)
• Walnut Creek, California
9 Jan 16
@ElizabethWallace Yeah, I thought of that. The $200K limit, I mean. And stock brokers always seem to lose money for me and make money for them. Hmm.
2 people like this
@ElizabethWallace (12074)
• United States
10 Jan 16
@TheHorse I once bought $500 worth of stock in a company I believed in, but the brokers' fees ate it all up. It seems criminal to me. All they did was fill out a buy form, but the fees kept rolling in, for nothing! Sick.
3 people like this
@ElizabethWallace (12074)
• United States
9 Jan 16
Several banks, the federal insurance only goes up to about $200K. So if there was a problem, you would lose anything over that amount. So, spread it around to a large number of banks. Then hire someone to watch it for you, oh, and someone to watch that guy too.
2 people like this
@fishtiger58 (29823)
• Momence, Illinois
9 Jan 16
I would set my kids up for sure and invest it. But I would enjoy some as well.
4 people like this
@ElizabethWallace (12074)
• United States
9 Jan 16
Use the 80-20 rule. Be wise with 80% of the money and have a ball with 20%. After all 20% of $300 million is $60 million. That would buy lots of fun.
3 people like this
@fishtiger58 (29823)
• Momence, Illinois
10 Jan 16
@ElizabethWallace Fun, fun and more fun.
2 people like this
@Marcyaz (35316)
• United States
9 Jan 16
I would put most of the money in the bank and then I could gift family and friends with some of the money. You definitely would need a financial advisor and yes a tax attorney because with all that money you need someone who knows what they are doing.
2 people like this
@Marcyaz (35316)
• United States
10 Jan 16
@ElizabethWallace
A tax attorney and a couple of banks or investments would take care of that.
2 people like this
@ElizabethWallace (12074)
• United States
9 Jan 16
You could not put most of the money in the bank. It would not be insured. There is a limit as to how much an individual can place in the bank and have safe. You would need a ton of banks, and someone to keep track of it all.
2 people like this
@Auntylou (4264)
• Oxford, England
10 Jan 16
@ElizabethWallace I do not buy lottery tickets and hed never thought about the safety of the cash won. In the UK up to about£85,000 is guaranteed by the government, per banking group. so even with a million you would have to go abroad.
2 people like this
@ElizabethWallace (12074)
• United States
9 Jan 16
That is why it is called "legacy" money. It would improve the lives of several generations if handled wisely.
1 person likes this
@ElizabethWallace (12074)
• United States
9 Jan 16
It would certainly be a blast. I would send each German teacher in California on a trip to a German speaking country every three years while they were teaching in a CA high school. They cannot afford such trips, but really should go to stay current.
2 people like this
@ElizabethWallace (12074)
• United States
9 Jan 16
@marlina Once upon a time teachers could take a sabbatical leave of a year with half pay and travel. Teachers also made money closer to what other professionals made at the time, so they could afford this. Not anymore. Teachers now are on food stamps in some places. Awful, five years of college, all that training and responsibility and paid less than many with only a high school diploma.
1 person likes this
@nanette64 (20364)
• Fairfield, Texas
10 Jan 16
You are so right about people being broke within 5 years @ElizabethWallace . Your steps for planning are perfect. #1 I sure wouldn't let anybody know I won. #2 I would have a lot of work done on my property. #3 I would donate to several of my critter organizations. #4 St. Jude's Children's Hospital. #5 My sister, daughter & granddaughter. #6 I'd buy an older, used Pickup truck. #7 I'd have a 3BR/2B log cabin built and have my crappy mobile home hauled off. #8 I'd build a huge, underground bunker with everything I would need (just in case). #9 Buy a few clothes that actually fit my frail body and a couple of pairs of shoes. #10 Hide the rest of the money.
2 people like this
@nanette64 (20364)
• Fairfield, Texas
10 Jan 16
@ElizabethWallace That's true. I could actually afford it couldn't I.
2 people like this
@ElizabethWallace (12074)
• United States
10 Jan 16
Have the shoes and clothes custom made for you. The cash pay out is now over $800 million. Treat yourself.
2 people like this
@ElizabethWallace (12074)
• United States
10 Jan 16
@nanette64 Even if you only won a few hundred thousand, you could afford that.
2 people like this
@DeborahDiane (40063)
• Laguna Woods, California
10 Jan 16
First, you cannot keep your name anonymous if you win the lottery in California. Here is what I would do ... 1. Like you, get a financial planner and lawyer; 2. Set up a charitable trust; 3. Choose a lawyer to be the "gate keeper" to respond to all requests for money and respond to the ones that meet my criteria for charity; 4. Move to a nice, but not overwhelming place in a gated community and get a P.O. Box, unlisted numbers and anything else necessary to make it harder for strangers to get in touch with me personally; 5. Give gifts to family.
2 people like this
@ElizabethWallace (12074)
• United States
10 Jan 16
You can keep your name secret within the time limit for claiming your winnings. During this time you set everything up. Then you come forward. The P.O. Box is a good idea, thanks.
2 people like this
@ElizabethWallace (12074)
• United States
11 Jan 16
@Auntylou Me too, but it will be someone who has no plan at all, usually is.
1 person likes this
@Auntylou (4264)
• Oxford, England
10 Jan 16
@ElizabethWallace I would love it if you or someone here actually won something and had seen all the clever advice here!
1 person likes this
@ElizabethWallace (12074)
• United States
10 Jan 16
Cool. We seem to plan for things to go wrong, but rarely do people plan for things to go right.
2 people like this
@paigea (35717)
• Canada
9 Jan 16
Lottery winnings aren't taxed in Canada. However what ever the money earned after that would be taxed so a tax attorney is still important. My plan for stuff would not be that much. But as you say now is your chance to build a legacy.
I would build my dream senior's lodge and move into it. Set up all of our grandchildren with trust funds - the kids too. I would give lots to charity.
I know someone who had an agreement with the friend to share if either ever had a big win. His friend won 10 million and gave him 1 million. The couple I know with the 1 million kept their same house, kept their jobs. They just enjoy life and take really nice holidays.
2 people like this
@ElizabethWallace (12074)
• United States
10 Jan 16
@paigea Yes, it certainly would. You could even give lots away (of course way more with this lottery) with that much.
2 people like this
@ElizabethWallace (12074)
• United States
9 Jan 16
When Powerball is huge, I buy a ticket for that, but also for the other two. Their amounts are much smaller, but always above $1 million. I'm not greedy. Winning any of these lotteries would let me do lots of good deeds I can only dabble in now.
3 people like this
@paigea (35717)
• Canada
10 Jan 16
@ElizabethWallace A million would be plenty to make life good.
2 people like this
@NancyWrites (31)
• United States
9 Jan 16
I fully admit I stink at math! But with the extra legacy money I would like to do two things...buy up houses in Detroit, renovate them and give them to homeless people, and possibly start a school.
3 people like this
@ElizabethWallace (12074)
• United States
9 Jan 16
Do you watch Rehab Addict? I love the show. She is renovating lovely old homes in Detroit, but not giving them away to homeless. I think renovating a city would help the homeless more than putting them in homes they would no know how to handle.
2 people like this
@ElizabethWallace (12074)
• United States
10 Jan 16
Too funny. It is fun to spend a very small amount of money (enough for one ticket) and spend some time daydreaming what you would do with the winnings. Cheap entertainment. People who buy lots of tickets do not understand the math, which was the point of my post. 
1 person likes this
@celticeagle (159452)
• Boise, Idaho
10 Jan 16
I would take the upfront amount and do some major financial investing. By the time I got the second installment I should be pretty well set up.
1 person likes this
@topffer (42156)
• France
9 Jan 16
Looks like a good plan. Money won at lotteries is not taxed here (the state keeps 40% of the money played at source), although with such an amount you would have to pay a wealth tax, except if you invest it in items not taxed, like works of arts. I would not be stingy, and pay not one but a handful of financial planners to find the best investments possible and administer my money. Step 2 would be to buy an island in Polynesia, and to spend the rest of my life below coconut trees on a white sand beach
.
.2 people like this
@ElizabethWallace (12074)
• United States
9 Jan 16
You can have Polynesia. I do not enjoy the tropics. But I would find three or four lovely places where the weather is perfect (in my view) at least part of the year, and live in each when it is at its best.
2 people like this
@garymarsh6 (23393)
• United Kingdom
11 Jan 16
That is a very sensible choice you have there. Now it is over a billion dollars it is hard to imagine that amount of money. Gosh you definitely would need professional advice for that amount. I think your bank manager may view you in a different way in fact they would probably come to you rather than you queue up at the bank! Spend it well Elizabeth and have fun!
1 person likes this
@troyburns (1405)
• New Zealand
9 Jan 16
The first thing I would do is change country. I read of so many big winners who seem to think that life will go on as before, with just a few more luxuries. I think you have to accept that your old life is gone and that you need to start a new one.
2 people like this
@CaptAlbertWhisker (32507)
• Calgary, Alberta
10 Jan 16
I know Lottery winners and game show winners in the US pays a lot of tax. I wonder if moving to another country will be a good option to escape the taxes.
3 people like this
@CaptAlbertWhisker (32507)
• Calgary, Alberta
10 Jan 16
@DianneN Canada have the best healthcare though. Switzerland is the safest country from natural disasters and terrorism. How about moving to another State, There might be US States with lower Taxes.
2 people like this
@DianneN (247191)
• United States
10 Jan 16
@CaptAlbertWhisker I don't know. What I do know is that I would never move to another country, taxes or no taxes.
1 person likes this
