There is a new program on TV called "Windfall". A group of 20 young "yuppie" types each puts money into a tin can at a party and signs the list of contributors. One young lady buys the lottery tickets and you guessed it, they win. $386 million dollars to be split 20 ways. It is everybodies dream to win millions of dollars and live the life of luxury for the rest of your life. It could happen to you! Yeah, right.
Lets look at the dispersing of the $386 million. If you split it 20 ways, each person will get $19.3 million. The calculation is made assuming you will take the payout over 25 years. That means a check each year until 2031 for $772,000 per year. Then you have to pay taxes so you'll end up with $424,000 per year. You will be able to do many special things but Donald Trump of Bill Gates you are not.
Or instead of taking a payout over 25 years, you can take a lump sum payment. If the winners take lump sum, the payout amount is amount half or $193 million to be divided 20 ways. Each would get about $9.65 million but then taxes would be due. So in a lump you would get $5.3 million. If you invest it at 6.0%, you would get $318,000 per year. Still not chump change but not the life altering event you expect from winning the lottery.
Now the fun starts. Your family, "loved ones", friends and every charitable organization in the country would be playing on your sympathy for handouts. Many winners of the lotteries change their phones, homes and even their names to avoid the blitz. You would have friends you never dreamed of.
Then of course, you'd have to set money aside for the education of your kids. The money would provide them with the basis to afford the "Harvards and Princetons" of the world. They can carry the family banner to bigger and better things provided they don't flunk out of school first or "or go looking for themselves in some Buddist Monastery. Maybe the School of Scientology will light their fire.
Then you need a big house. A really big house. With a pool. A place where all your friends can come. You've got to remember that you made them all mad by refusing to give them financial handouts so they won't come visit.
Then a new car. Yep, the "Beemer". Fast, slick and a guaranteed ego trip.
Then there is the "shove it factor". Every winner of a big lump sum of money dreams about walking into the boss's office and telling him to shove his job where the sun don't shine. Take that! You don't need the income.
Trips. Yes, lots and lots of trips.
A lake cottage. It must be year around and have a permanent dock capable of mooring fashionable boats.
And then reality will set in. You've got to continue the journey of life. You've lost your friends, the "Beemer" really isn't all that exciting, the kids have gotten out of control demanding everything and the job satisfaction that comes from being part of a meaningful organization is absent. You suddenly have to redefine your life purpose and goals. Good luck! You hadn't finished the definition process before you won the money.
So while it sounds good and would certainly change the options you have in life, winning millions is not a panacea. It could happen to you.
But Grasshoppers, here is my advice. You don't want all the mental anguish of winning the lottery. Give all the money to your mom and dad. They have the maturity necessary to deal with a "windfall". Let them live in big houses, drive "beemers" and turn down all the requests for money. It is the perfect solution. Ah, the wisdom of Dad.
Love,
Dad
I have always said that IF I were to win millions of dollars I would give the majority of it to my parents. Is there any other way to do it? :-)
Wiseman told grasshopper, "boy there are good problems and bad problems, learn which one is which and you will be rich beyond your years". All those problems seem good to me.
My parents don't need the money or all those problems either. I'd donate all of it to charity, starting with Katrina victims, then the poor illegal Mexican immigrants...