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Space Pirate Nithiel wrote on 2015-06-12 18:12
What will you do with your winnings?
For the sake of the question, here are the details:
1. The jackpot you won was $300,000,000.
2. You have two choices with how you will receive the money, cash out now or take a yearly payment.
3. If you cash out the amount is immediately cut by 54% leaving you with $162,000,000. After taxes of 40% you are left with a grand total of $97,200,000.
4. If you take the payment option you will receive payments every year for the next 30 years. Each year the payment size increases by 5%, so you would get $4,000,000 the first year, $4,200,000 the second year, etc. until you hit 30 years and have all of the money. Of course you will be taxed each year for the amount received, after taxes you would only get $2,400,000 the first year, etc. Also keep in mind that inflation isn't taken into account, so $2,000,000 may only be worth $500,000 in 30 years. Also the tax isn't locked, so if taxes rise again you'll be paying a higher rate. The plus side of all this is that you DO receive the FULL $300,000,000 minus taxes.
5. We are going to ignore state tax for this example, because some states do not charge tax on lottery winnings while others like New York charge over 12% tax on them.
6. For anyone thinking they'll stay anonymous and go hide with their money, only 6 states (Delaware, Kansas, Maryland, North Dakota, Ohio and South Carolina) allow anonymous lottery claims, if you live anywhere else you are required to publicly claim your winnings so they can announce it and put you in the news and stuff.
7. If you give away more than $5,300,000 you are subject to a 40% Gift Tax on anything else you give away after passing that mark. Yes, this is an actual thing not something I made up. And that's $5,300,000 you are allowed to give away over the course of your entire life, it doesn't reset yearly or anything. However, there is a way around it. You are allowed to give up to $14,000 per person per year without it being counted against your limit.
8. You have 100 days from the announcement to claim your winnings.
I think that's all the rules. So, what will you do now that you've won the lottery?
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Campylobacter jejuni wrote on 2015-06-12 18:26
Point 7 is incorrect by ommission of details as I found out after 15 seconds of Google/Wikipedia.
Non-taxable gifts[edit]
Generally, the following gifts are not taxable gifts:[5]
Gifts that are not more than the annual exclusion for the calendar year (For the year 2015: $14,000 per recipient for any one donor[6])
Gifts to a political organization for its use
Gifts to charities
Gifts to one's (US Citizen) spouse
Tuition or medical expenses one pays directly to a medical or educational institution for someone. Donor must pay the expense directly. If donor writes a check to donee and donee then pays the expense, the gift may be subject to tax.
Okay, I changed my mind, I'll take the 30-years payment.
What will I do with the money?
1: Keep 5.000.000 locked up for my heirs as savings,
2: Keep 10.000.000 invested to be used as spending money throughout life,
3: donate the rest, primarily to science.
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Space Pirate Nithiel wrote on 2015-06-12 18:46
Quote from Campylobacter jejuni;1278163:
Point 7 is incorrect by ommission of details as I found out after 15 seconds of Google/Wikipedia.
I didn't think anyone would care about donating to political organizations so I didn't bother including that.
Quote from Campylobacter jejuni;1278163:
I choose option 1 because of the added security. Payout could stop long before I received a comparable ammout of money for any number of reasons such as war, law changes, bankruptcy etc. Who the fuck would accept a 30-year installment payment when doing business?
If you ask an individual person they will usually say the lump sum is best, if you ask a business they actually do tend to go with the side of the yearly payments more often than not, even going so far as to say no one should ever take the lump sum.
Also, that doesn't really answer the question, mang. What would you DO with it? Would you buy a spaceship? Invest in teaching dogs how to cook? Write a book about a wet noodle that wants to be Superman?
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Campylobacter jejuni wrote on 2015-06-12 18:52
Those businesses are very trusting. I suppose the situation is stable and there's little reason to think it changes, but man, it's 30 years!
Also those numbers mean something else to businesses than to lower middle class private persons like me... The guaranteed loss of 54% is barely noticable for me, it might deter them more because they simply need more than I do and thus weigh their risks differently.
Especially for big multinationals where this is basically chump change.
But man, 30 years!
Actually come to think of it a lot of loans go over several decades, specifically housing. So I guess it's not new.
Haha, actually I think I'll take the 30-years payment now.
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Blissfulkill wrote on 2015-06-12 20:16
Buy Africa.
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Space Pirate Nithiel wrote on 2015-06-12 20:43
My answer:
[SPOILER="Spoils"]I'd take the lump sum, so $97m Tell no one, not even my parents. First person to contact is a lawyer, someone from a top firm who knows what they're doing not some local mom & pop lawyer. Do that before even claiming the reward. Second contact is a financial planner. 11% of my money will be given to family members, (1% each), 6.75% to real life friends (.75% each), and 3% to my closest online friends (.5% each). After that I would be left with $77m. Go ahead and knock off $2m for legal and financial planner fees just to be safe. I'm sure they won't be that much but better to overestimate than under. That leaves me with $75m for personal use. $10m would be pulled out for personal use - buying a home, car, groceries, games, etc. the other $65m would be placed into investment and IRA accounts with a yearly turnover rate of at least 3.5% as chosen by the financial planner so that I can gain more money. This money would free me up to pursue a dream job/hobbies rather than needing to worry about where my next meal is coming from. I would try to live fairly simply, keeping my money as quiet as possible so that I don't have hoards of people at my door begging for handouts, women claiming I owe them child support, people claiming I hit them with my car, etc.[/SPOILER]
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Osayidan wrote on 2015-06-12 20:44
Take the full amount right away.
Spend what I need to build myself a decent (normal sized but high quality) home without incurring any debt.
Put aside about 1m in a normal bank accoutn to rot away and I chip away at it if I need to buy things I couldn't normally afford.
Use the rest for investments of various kinds.
I wouldn't quit my job or retire, at least not permanently. I like what I do and I want to keep doing it, but with a ton of money I might be able to do it on a different level (owning my own company instead of being an employee for example).
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Elleanior wrote on 2015-06-12 20:50
Yearly withdrawls. Allow everyone in my family their desired amount in allowance (not exceeding $200), I will spend some getting some of our things up-to-date (buy a WiiU and some desired games, buy a 3DS and some desired games), and the rest goes to bills, food, and at least 15% of the yearly funds go to charity, both local and not. All the rest of the income will be handled by my mother who does the household accounting, and will likely be spent on ensuring ourselves a better house. (Our current one is falling apart.) If anybody wants anything, they are free to petition her.
I'd panic if I won something like that.
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Space Pirate Nithiel wrote on 2015-06-12 21:48
Quote from Elleanior;1278185:
I'd panic if I won something like that.
Yeah, a lot of people don't handle it properly and are back to where they started or even worse than they were originally within a couple years.
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makoto wrote on 2015-06-12 23:22
Take the lump sum, separate it in half, donate one half to multiple charities that I like.
The other half, give most of it to my family and make sure they are well off.
Whatever money I have left, use it to live like a hermit for the rest of my life.
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Kaeporo wrote on 2015-06-12 23:24
Quote from Space Pirate Nithiel;1278161:
What will you do with your winnings?
For the sake of the question, here are the details:
1. The jackpot you won was $300,000,000.
2. You have two choices with how you will receive the money, cash out now or take a yearly payment.
3. If you cash out the amount is immediately cut by 54% leaving you with $162,000,000. After taxes of 40% you are left with a grand total of $97,200,000.
4. If you take the payment option you will receive payments every year for the next 30 years. Each year the payment size increases by 5%, so you would get $4,000,000 the first year, $4,200,000 the second year, etc. until you hit 30 years and have all of the money. Of course you will be taxed each year for the amount received, after taxes you would only get $2,400,000 the first year, etc. Also keep in mind that inflation isn't taken into account, so $2,000,000 may only be worth $500,000 in 30 years. Also the tax isn't locked, so if taxes rise again you'll be paying a higher rate. The plus side of all this is that you DO receive the FULL $300,000,000 minus taxes.
5. We are going to ignore state tax for this example, because some states do not charge tax on lottery winnings while others like New York charge over 12% tax on them.
6. For anyone thinking they'll stay anonymous and go hide with their money, only 6 states (Delaware, Kansas, Maryland, North Dakota, Ohio and South Carolina) allow anonymous lottery claims, if you live anywhere else you are required to publicly claim your winnings so they can announce it and put you in the news and stuff.
7. If you give away more than $5,300,000 you are subject to a 40% Gift Tax on anything else you give away after passing that mark. Yes, this is an actual thing not something I made up. And that's $5,300,000 you are allowed to give away over the course of your entire life, it doesn't reset yearly or anything. However, there is a way around it. You are allowed to give up to $14,000 per person per year without it being counted against your limit.
8. You have 100 days from the announcement to claim your winnings.
I think that's all the rules. So, what will you do now that you've won the lottery?
If the immediate payment option cuts the reward by 54% you would end up with $138,000. Assuming a stable economy, 30 years will reduce the value of both rewards to roughly 40~50% of their current value. It's only better to cash out if you smartly invest in life-cycle/index funds, gold, or real estate.
Either way, you're looking at over a million dollars per year. If you can't survive off what the average person is expected to earn over their entire life per year, you're a fucking joke and you deserve to be divorced from your money.
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Bunny wrote on 2015-06-13 02:10
I would take the yearly payment option, put some of it in savings, buy a nice cozy mansion, and invite all my guildies to a piñata party (the piñata will drop NX cards.)
HAHAHA
I'm serious.
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Jake wrote on 2015-06-13 02:13
Quote from Bunny;1278232:
I would take the yearly payment option, put some of it in savings, buy a nice cozy mansion, and invite all my guildies to a piñata party (the piñata will drop NX cards.)
HAHAHA
I'm serious.
pls what a waste
I'd grabble up all the mcdonalds sweet n sour sauce packets in the world and corner the market and charge $0.50 per packet and make back a lot more money than what I started with because you know people are fiending for some of that sweet sweet n sour sauce
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Kyishi wrote on 2015-06-13 06:37
i'd travel across the world. maybe go visit everyone i've met online. egg the houses of people i don't like, etc.
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Meiji wrote on 2015-06-13 07:15
Quote from Kyishi;1278269:
i'd travel across the world. maybe go visit everyone i've met online. egg the houses of people i don't like, etc.
no pls