I’m 59. I never in my wildest dreams thought I’d live this long, and I do not think I have all that much longer to go.
With that in mind, I’d make an earnest effort to squander $300mil. I’d go for the lump sum. I’d set up accounts for my son and daughter with two or three million dollars for each that would allow them to collect and spend the interest, then give them the capital after my death. Then I’d bust my ass trying to blow the rest (while staying out of the criminal justice system). My goal would be to leave zero estate. If I had to live the final few months on social security, so be it.
ETA: Ref Corry El’s post #139, and partly ninja’d by his #140: Yeah.
Once we allow for the demographics of lottery players the fact that a $1M payoff is usually a poisoned chalice makes a lot of sense. Especially given the publicity.
There are plenty of fairly ordinary-looking comfy-class neighborhoods where nearly every household much over age 40 has a net worth over $1M and many around 4 or 5M. If any one of those families received a *secret *$1M windfall it might be darn hard for the neighbors to notice. Maybe an even newer car or an extra vacation that year. The biggest difference would be in the numbers on their monthly brokerage statement that nobody else will ever see.
OTOH, for some poor schlub who runs a cash register at a K-Mart and hits the Lotto for $1M and has his/her picture in the newspaper the impact will be much more dramatic. With lots more bad side effects.
It seems from cites up-thread that some state lotteries allow the winners to remain anonymous. I wonder if there’s ever been a study on whether those states have happier outcomes than the ones with mandatory publicity for $1Mish winners?
If I or one of my peers or betters won $1M it’d be pretty easy to keep quiet about it. If my local grocery store checker did she’d probably blab or show off to her detriment. So even if privacy was an option I’m not sure it’d help the folks who need it the most.
My now 92 yo MIL said exactly the same thing at your age. So she retired early at 60 and took her state employee pension as a larger payout for a fixed term of only 10 years rather than receiving the default smaller monthly number for life.
At 62, with a wife and no kids I would do the same thing. No one I want to have riches when we’re gone, so it’s up to us to squander the whole amount over the next 30 years or so.
Anyway, getting back to the GQ part - if I win the Powerball and ask Bank of America to put that $200 million in my checking account, they really would?
There’s no regulation prohibiting a checking account from jumping by 500000000%, or barring wire-transfers above a certain size threshold?
So long as the source of such a large amount of money can be shown to be legitimate then, yes, BoA could just deposit it in your checking account. And presumably the lottery would give you a check or wire transfer so not a problem.
Banks get nervous when you show up with LOTS of cash and cannot explain its source adequately. No way they would deal with a few hundred million in cash without a good explanation.
I don’t think it’s possible to thread that needle, assuming:
(1) A fair definition of “do anything” (I understand he probably means in terms of starting a business);
(2) The money is not actually restricted in some way;
(3) The heir is willing to “do nothing” on a budget, perhaps in a country with a lower cost of living than in the US.
I feel confident that if I were still single, I could live indefinitely on $1 million or maybe even a half mil, without doing any work for pay (it would of course be a kind of work to pinch pennies, do my own housework, and make sure I invest the money properly, shifting the ratio of my portfolio over time from growth funds to income-producing financial instruments). And I’m sure Warren gave his kids more than that.
This is certainly and completely untrue when properly looked at. Money market funds are paying 0.02-0.05. Inflation in somewhere are 2.0. So every single month in MM means a loss of buying power for the investor. MM is a place to stash money you intend to spend or for some other reason is on the sidelines, not a long term play for a large percentage of your cash.
Money market funds should pay short term interest rates - somewhere between T-Bills and high-quality corporate, less management fee. In the region of 1% for a decent fund at the moment. Of course, somebody might be offering you a product that they call a money market fund, and taking virtually all the interest as a fee. Not uncommon at a bank, for small amounts of money. https://personal.vanguard.com/us/funds/snapshot?FundId=0066&FundIntExt=INT
I made the same point about inflation with regard to what one should consider “safe” in the long term, but we seem to a have drifted a long way from the OP, which asked where to keep money safe temporarily.
I’m quite sure the monthly cost of “doing nothing”, for a child who has grown up with a billionaire for a parent, is a *little *higher than the monthly cost of “doing nothing” for you or I.
Oops, indeed!