An acquaintance of mine won about a million dollars many years ago. The first big thing he bought was a Disney vacation for family members.
I heard that it did not go well. There were 20-25 people and they were (unwisely) trying to do everything together as a group but it became a big mess. Lots of waiting for other folks, lots of disagreement or indecisiveness about which activities to do and when, etc. Sounds like it became a miserable experience for all.
mmm
I wouldn’t go! I hate that kind of thing, (I won’t go to the state fair any more, either. ‘what do you want to do?’ ‘where do you want to go?’ ‘what do you want to eat?’ They plod behind you, ‘I don’t know, I don’t know, I don’t know’.). The wise thing is to split up! If you have kids, you walk around with your kids. But all 20 of you trying to go on a ride? you’d have to go in batches, and some stand around waiting for everyone to get off of Mr. Toad’s Wild Ride…No fun! … Oh, and today a big chunk of the remains of that million he won would be used right up by 20 people at DW.
I know enough math not to play the lottery, but a high school friend of mine from my hometown does. Five years ago she, her fiancé, and her young daughter got written up in the paper for winning almost $400,000. The article said that they were going to use the money to pay off their debts and mortgage and to start a college fund for the daughter.
I have no idea what happened to her after that – we haven’t seen each other since about 2005 and she has no online presence apart from a Facebook profile last updated in 2009. Google returns no results for her name later than the 2017 newspaper story. Judging from others’ stories in this thread, it wouldn’t surprise me if she and her family have decided to disappear in order to avoid scroungers. Last time I was in town I thought about calling her up but figured that she’d probably changed her number, or else would think I was going to ask her for money.
I bet she’s glad she sucks at math.
mmm
The thing about the lottery prize that a lot of people do not realize is that the named jackpot is nowhere near the amount of actual money that you will end up with. The mother of a friend of mine hit a $7.7 million jackpot. Final amount in hand was about $2 million dollars.
First of all, the only way to get the full jackpot is to take the annuity over about 30 years, most people don’t want to wait so they take the cash option, which is half of the advertised jackpot. Because that is all the lottery really has. They will invest this half for you and pay you out in annual payments, but they don’t really have the full amount of the jackpot.
Then you have taxes. My state has state income tax of about 10%. The Federal government will withhold a minimum of I think 25%. But at the end of the year you will really owe them about 36 or 38%. So almost another half can go to taxes.
So when you see a $8 million dollar jackpot cut that in half, and then half again. But all your freinds and relatives are going to hear is “he won $8 million dollars!” Even though you only got $2 million.
Results and taxes may vary in your area.
True on all counts.
Might be worth talking with a financial advisor, if the time ever comes, to figure out whether the tax bite might be lower (overall) if you take it all at once versus an annuity - e.g. if the amount over, say, 200,000 (making that up) is taxable at 33%, and the amount between 100K and 200K is 28%, you’ll have one big chunk where almost all of it is taxed at 33%, whereas with an annuity you’d have annual payouts where a little bit of it is at the highest rate.
Somehow I doubt I explained that all that well. And it might vary by the state you live in, versus the state you won in.
And also find out whether, if you die before the annuity is finished, do your heirs get the remainder of the annuity? or are you just out of luck?
Us: we put a few bucks in periodically. It’s not a huge amount, and we chalk it up to entertainment expense. We’ve won 5 or 10 bucks here or there.
This is really important in lottos that pay out in prizes. Local lotteries often have prizes like houses, RVs, sports cars, etc. So you win the RV, but now you have to pay $40,000 in taxes on your $100,000 RV. So you sell the RV, and find out that a used RV is only worth $60,000. So your $100,000 win turns out to be $20,000 and a whole lot of work.
In Canada, we don’t tax lotto winnings. But in the states, this can be a problem.
There were some people during the game show heyday that really got burned. They’d go on ‘The Price is Right’ or something, and win a whole lot of prizes - a hot tub, a vacation, a new living room furniture set, a set of his and hers expensive golf clubs, whatever. Maybe $30,000 worth of stuff, all taxable. The contestant is a poor person who can’t afford the taxes at all and really can’t use all the stuff they won. More than one person in that situation wound up selling everthing they won on a show to pay the tax bill and still came up short, taking a personal loss for ‘winning’. Some of those gifts have high dollar retail values but low used values. You can get taxed more on the retail value than you can reclaim selling it used.
When Opera ‘gave away’ 276 cars as part of a General Motors promotion, the recipients got a $6000+ tax bill.
The lotteries are nothing more than an additional tax on mostly unschooled, poor, destitute people. Those that can least afford to play. Only a fraction of the money goes to programs as advertised, such as schools, sports & all those feel good programs. The real benefactors are those higher ups that manage the lotteries with their exhorbitant wages & bonuses. The governments rake in millions. Possibly billions over the years. Governments should be ashamed that they promote such things.
As yes, as others have pointed out, many or most ‘winners’ will come out poorer than before they started after they’ve been screwed over by investment ‘specialists’ & taxes & so on. Most winners simply aren’t equipped to deal with all that.
Then there’s the social costs created by those that end up in bankruptcy, as many do and end up relying on social assistance and the resulting deterioration into poor health.
We’ll save the governments involvement in gambling for another thread.
I used to work at a place. There was a guy that would buy a slew of lottery tickets each week and then agonize for a good while over which numbers to select. I once pointed out to him that it made no difference. That was a mistake. He didn’t speak to me for about a week.
PS/ I should point out that above I’m referring to serious players. Those that spend way more than they should or can realistically afford on various lotteries each week. Many others buy the odd ticket here & there knowing full well that chances are slim to none.
And that’s if you pass the background check. At least in Iowa, any lottery winnings over IIRC $1,000 requires one, and they look for (in this order) delinquent taxes, child support, and student loans. Not a few people have received a 1099 and that’s it.