How would one go about life after winning a ton of money?
I always thought that I would not tell anyone, and then just send cashiers checks in the mail to loved ones, but I don’t think that is very realistic. On one hand I would love to help out friends and family that I care about, but on the other hand I would not want to deal with “friends” and “family” whom I haven’t seen in many years. Also, I would want to donate to certain charities, but not get swarmed by all kinds of charities that I hadn’t heard of ever.
How would someone go about choosing a honest money manager? Avoid really big mistakes? Make the money grow with minimal risk, but a decent ROI? Do alot of good with the money, but not feel like you’re just giving it away (I mean to say I would want to see results if I gave money to a charity).
And I did not win a lottery ever…but I know I will…one day. Maybe.
PS
We are talking about a sum of money that would be enormous…something like 1,500x what one makes in a year.
I’d go to Northern Rock, I hear they’re very skilled in the way they make investments.
Seriously though, there are banks that only handle clients with large accounts, one example is Coutts, the Queen’s banker. You can only open an account if you have either £500,000 in cash or shares/bonds or £5,000,000 in assets (property etc). I’m sure that they, or another company in the private banking industry, would be able to service your needs completely.
Hire a CPA. Make sure the IRS etc has theirs first.
Buy an annuity, with a monthly payment slightly higher than what you earn now. Thus if you blow all the rest you still have that.
Buy a nice house, pay cash. 100% solid investment, that you get to live in.
With your CPA and your lawyer, set up a Charitable Trust. Donate a good amount (listen to your experts) to it. Any requests for loans or hand-outs to freinds and relatives get handled by the trust, thus ensuring you at least get a deduction and you have two other dudes who will advise you before you write checks for sob-stories. Explain to all they must put their request through the Trust “so that you get a tax write-off” which they should understand.
Tell dudes that “after taxes and what I had to pay to my lawyer and CPA, you’d be suprised how little I have left”.
Note that with House and Annuity you already have two “baskets”, thus even if your stock markets buys go bad, you have those.
My brother won the first division prize in Lotto a while ago. He got some financial advice and then invested it a range of things (property, shares, fixed interest securities, trusts). The original lump sum prize was tax-free, but the earnings that it has since generated have been taxable.
I would buy/build my dream house . Something like that. Pay off my parents and sister’s house for them. Pay off all my debts and invest the rest of it.
I would probably take a look around me and make a list of the people (that aren’t family) that have been there for me, supported me… and do something nice for them too.
IANALOA, but as an American, give up and/or squash the idea of giving friends and family large checks. There is none of this “I’m going to give my buds a million each!”
Because there’s this thing called Gift Taxes.
You’d want to check (google) the exact information, but I believe it now stands at;
1> Max $15,000 gift to any individual without incurring Gift Taxes.
(Up from $10k a couple of years back.)
2> Gift amounts over that subject to 45% gift tax on the giver’s end.
(It used to be 55%)
3> Gift amounts over that subject to Income Tax on the reciever’s end.
So to give someone $100k, it’s costing you $138,250; and they’re probably ending up with $65-70k after taxes, or about half what you paid out. I dunno about you, but I’m not particularly interested in giving the government anything close to $1 for every $1 my friend ends up with.
If I won the lottery, it’d be checks for $15k to each family member, smaller amounts to close friends, maybe a couple hundred bucks to a dozen or more associates, with the clear statement that they ain’t seeing anything more outa me; and that while I might invite people out to dinner on my dime on occasion, that doesn’t mean that I pick up the check every time they invite me out!
One of my first calls would be to my brother. He’s a CPA, and he’s been CFO for a number of different corporations (headhunters are always trying to recruit him.) Plus he’s honest, so I wouldn’t feel like I had to second-guess his advice.
And other than paying off my VISA bill ;), I’d heed his advice.
OK, I’d probably hire someone to replace the roof on my house, too.
I’ve always figured that if I won the Powerball, or similar drawing when it was crazy high that I’d do the following:
Take roughly 25% of the post-taxes winnings to one of the better investment houses. along with a list of relatives I don’t want to strangle. Tell the investment house to invest the money and send everybody on the list a check from the profits each quarter. along with each check enclose a note that says “These checks will continue to arrive for as long as you never ask Scumpup for another fucking dime.”
The principal will, of course, remain in my name. I picture this as working something like a tontine. As the relatives on the list die off, the survivors get proportionally larger checks each quarter. When I die, if my heirs decide to continue paying out the dividends, that’s up to them.
In the meantime, I will concern myself with enjoying the rest of my unearned fortune.
A friend was saying the other day that if (or “when” as she likes to put it) she ever wins the Powerball the first thing she’s going to do is send each of her two brothers a large check and then tell them that she never wants to hear from them again.
Seriously rich people live on about 2% of their wealth. I would try my best to do that. That should insure that I never touch principle, only a portion of the interest earned.
I’m with you on #1 (limit to gift amount before gift tax) and #3 (taxable over that amount to recipient), but I’d never heard of #2 before (tax to the giver). Not that I’ve ever been in that position, and the tax laws are truly labyrinthine, but is this really true? I wonder what is behind that philosophy?* It would seem that that money had already been taxed once.
This subject is the frequent daydream. I’ve determined that I would:
Stash at least $3 million overseas, where the gubbmint couldn’t grab it.
Establish scholarship funds for my friends kids, with maybe a bit of a trust fund to follow if they major in something useful. Sorta along the lines of what Zeb had in “The Number of the Beast.”
Make sure that my CPA and Financial Advisor know about #1. That way they know I have enough money that they can’t touch to have them whacked if they ever get sneaky.
After setting up households in Vegas, London and Billings, start offering endowments to various universities. Like offering Cal a chair in Economics, with the catch that it has to be filled by a pathological Capitalist. Offer Grambling an endowment, with the catch that they have to hire a Klanner. That sort of stuff.
Make the Dope free forever, with new servers and hookers for the Mods and 99ers.
All false. Gift taxes are just a way to pre-incur Estate taxes. Yes, you must *file *a Gift Tax return for a Gift over $12K (or whatever the figure is for 2008), but nothing is owed until you go over whatever the current cumulative exclusion is for Estate & Gift taxes, which was $1Million last time I checked.
It’s a good question, considering that Exxon’s final appeal for the oil spill in 1989 is happening this year. We’ve already lost half of the punitive damages, but if the court finds in our favor that’s still a considerable amount of money. We have new legislation that passed which ensures that, where the IRS is concerned, the earned income is spread over five years, and we may also put a certain amount into an IRA. If we ever do get any money, all I really want is for my husband and I to be financially secure into retirement, perhaps a nice family vacation, and a small piece of land (a couple of acres) to build a small home on.
