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  1. - Top - End - #61
    Pixie in the Playground
     
    Kobold

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    Default Re: I Won The Lottery

    Quote Originally Posted by Tvtyrant View Post
    Winning the lottery often ruins lives, its not exactly to be taken lightly. People draw hanger-ons who offer them whatever they want in return for their money, family and friends find their relationships eroded, coming into large amounts of money is good but also dangerous. A professional is a very good idea.

    I think that's mostly because most people don't realy understand how much (or rather little) they have won. As for example if you win 1 million USD and you are earning 30k USD a year, the amount seams amazing but what you have won is frankly c.a 30 year's pension. So if you want to change your live dramatically i.e buy new home, car etc and drop your boring work after a year or two you will find out that this prize is not enough, but at this moment it is hard to return to your previous life.

    That's why if you win you need firstly try to understand how much exactly you have won, and grasping with huge numbers is hard for people. I suggest to try to calculate how many years of work this prize represent, because if the number of years is similar to your expected life expectancy you either won early retirement or better quality of live, not both, and you need to remember that.

    As for lotteries I found them nice gift addition, it's usually additional 1$ for the gift and if this ticket win you just give the best gift ever : P Although it may sting a little : )

  2. - Top - End - #62
    Firbolg in the Playground
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    Default Re: I Won The Lottery

    Actually, the first problem is that people look at the gross, not the net. 40% of that $1 million will be taken out automatically for taxes, so you really have $600,000 (before paying for the lawyers for the transfer details; they don't just hand you a check).

    As with any windfall, the best thing you can do with it is pay down your debt load, since you're getting charged more in interest than you'll make in an investment.

  3. - Top - End - #63
    Ogre in the Playground
     
    ElfPirate

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    Default Re: I Won The Lottery

    Quote Originally Posted by Rogar Demonblud View Post
    Actually, the first problem is that people look at the gross, not the net. 40% of that $1 million will be taken out automatically for taxes, so you really have $600,000 (before paying for the lawyers for the transfer details; they don't just hand you a check).

    As with any windfall, the best thing you can do with it is pay down your debt load, since you're getting charged more in interest than you'll make in an investment.
    Man, you do not get a break there, like at all.
    Here, the lottery tax is covered by the gaming concern, so what you win you keep. As long as you play something classified as a game of chance (and to the best of my knowledge all the monopoly's games are that) winnings are not taxed as income or capital gains, but as just that, lottery win which is covered under aformentioned lottery tax.

    I know I've seen a discussion about taxing (online) poker winnings because it is sold as a game of skill. The service providers and players like to say it's based on skills, but then when it comes to taxing it as regular income suddenly it's a game of chance.

    I agree it is usually a good idea to pay off debt, and man do you Americans like racking up various forms of high-interest debt. But, here am thinking of most common debt would be of such low interests it isn't that much of an issue investing in fairly safe investments that would exceed interests rates.

    It's kinda an interesting concept though, I think I've heard of such a thing as a "lottery winner's curse". Basically, for many winners their lucky break ends up turning quite nasty. Usually as previous poter alluded to using up their money quickly and all kinds of stuff. Though on that note I must say I've never really heard of any big lottery winner, they tend to stay anonimous. However, tax record are public information (yes we have that too) when finalized so anyone with a sudden burst of wealth would probably show up locally (though only in so far as taxable wealth, lottery winnings isn't taxable income). Just mentioning this because in theory someone suddenly showing up in my local community with a 50M fortune should stick out.

    And I agree, people tend to underestimate how much money it takes to live a jetset life for the rest of your life. The usually say it's not who much you earn but how much you spend. Michael Jackson went hugely into debt with an income that would have turned our faces paler than his was at the end if we received it on our yearly taxreturns.
    Last edited by snowblizz; 2020-08-20 at 03:39 AM.

  4. - Top - End - #64
    Dragon in the Playground Moderator
     
    Peelee's Avatar

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    Default Re: I Won The Lottery

    Quote Originally Posted by Kidone View Post
    Congratulations! I was participating in many lotteries but never won anything unfortunately. But if I did I would buy villa in Cannes for sure, I've been to France many times and would love to live there when I retire.
    The fact that this thread had survived for so long is to blame, but OP was on April Fool's Day, it's worth noting.
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  5. - Top - End - #65
    Firbolg in the Playground
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    Default Re: I Won The Lottery

    Snowblizz, states charge you income tax on your tax refund over here.

    And lottery winners are publicized over here, as a check against the winners just happening to be close relatives to the people running the lotteries. Which is something of a problem with the smaller ones.

    And there is no such thing as low-interest debt. Even the best will be well over what you can get with a savings account (which are a good way to lose money, since they generally pay less than half the inflation rate). Even CDs (which are considered a baseline) rarely pay more than 2%, while the bank will use your money for car loans to other people at ~5% or mortgages at whatever the market will bear.

  6. - Top - End - #66
    Pixie in the Playground
     
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    Default Re: I Won The Lottery

    Woz is worth more than $100 million.
    I drank some stuff from a drain and it drove me insane.

  7. - Top - End - #67
    Dragon in the Playground Moderator
     
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    Default Re: I Won The Lottery

    Quote Originally Posted by Rogar Demonblud View Post
    And there is no such thing as low-interest debt. Even the best will be well over what you can get with a savings account (which are a good way to lose money, since they generally pay less than half the inflation rate). Even CDs (which are considered a baseline) rarely pay more than 2%, while the bank will use your money for car loans to other people at ~5% or mortgages at whatever the market will bear.
    A good amount of wealthy people will indeed not pay off debts because they can make more money keeping the money. If your million-dollar home loan is at 3% interest and you can invest a million dollars at 5% interest, paying off the loan with that money is the worse option.

    And the people who do this are able to get ROI much better than my quick and dirty figures.
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  8. - Top - End - #68
    Firbolg in the Playground
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    Default Re: I Won The Lottery

    A Roth IRA would probably get you more than that 5%. A good mutual fund should be 8% or more.

  9. - Top - End - #69
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    Default Re: I Won The Lottery

    Quote Originally Posted by Rogar Demonblud View Post
    A Roth IRA would probably get you more than that 5%. A good mutual fund should be 8% or more.
    Historical stock market average is about 7%, IIRC. Anybody telling you they can do better than that over a long timeline probably has a significant financial interest in getting you to give them your money.

  10. - Top - End - #70
    Dragon in the Playground Moderator
     
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    Default Re: I Won The Lottery

    Quote Originally Posted by tyckspoon View Post
    Historical stock market average is about 7%, IIRC. Anybody telling you they can do better than that over a long timeline probably has a significant financial interest in getting you to give them your money.
    Or doesn't care about your money because they don't need it. I'm looking at you, Warren Buffet.
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  11. - Top - End - #71
    Ettin in the Playground
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    Default Re: I Won The Lottery

    Quote Originally Posted by Peelee View Post
    The fact that this thread had survived for so long is to blame, but OP was on April Fool's Day, it's worth noting.
    Well, let's see if it will last until April 1 2021! Then other people can "win the lottery" exactly one year after BMH

  12. - Top - End - #72
    Ogre in the Playground
     
    ElfPirate

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    Default Re: I Won The Lottery

    Quote Originally Posted by Rogar Demonblud View Post
    Snowblizz, states charge you income tax on your tax refund over here.
    Just when I think I can't hear something more mindboggling, I do.

    I can't even fathom how they arrive at that logically. That must be some kind of state/federal overlap thing or?

    I even get an interest payment on my taxrefund from the government. A pittence, but still, the point being they have had my money because they didn't count it properly in the first place so I'm compensated. And the other way works opposite, so if I need to pay backtaxes there is no interest on top of that. Similarly I have 5 years to complain voer my taxreturn, but the governemnt can only challenge my tax returns for 2 years. Because again, the onus is on them to get it right.

    Quote Originally Posted by Rogar Demonblud View Post
    And lottery winners are publicized over here, as a check against the winners just happening to be close relatives to the people running the lotteries. Which is something of a problem with the smaller ones.
    I see the twisted logic there. We have independent gambling/lottery commissions of some kind checkign this. They even used to mention/show them when they did televized broadcasting of the drawing. It was always a greyclad man that looked like caricature of the word "accountent".

    Quote Originally Posted by Rogar Demonblud View Post
    And there is no such thing as low-interest debt. Even the best will be well over what you can get with a savings account (which are a good way to lose money, since they generally pay less than half the inflation rate). Even CDs (which are considered a baseline) rarely pay more than 2%, while the bank will use your money for car loans to other people at ~5% or mortgages at whatever the market will bear.
    Well yes, an actual savings account won't do it. I was thinking more along lines of general stock indexfund, one that's not "actively managed" and thus more expensive and over time seldom any better.

    I have friend with a 0.4 and 0.5% margin on his morgage (i.e. what he pays is 0.5% + current rate of the euribor) and when he sold off the first apartment he had with his wife they could have paid off a big chunk of the morgage on their new family home, but it made more sense to keep the loan and reinvest. Which they did in another apartment better suited for rental. I did recommend stocks but that wasn't really his thing. Part of this is the bank was stuck with his heavily competitized (at one point they were almost giving money away) margin rate so if he kept the loan he could keep that, any renegotiation or taking out a new loan wouldn't get him as competitive a margin anymore. And it should be noted, they tried really hard to sucker him into changing it.

    Obviously this is all very much not broadly applicable. Just saying there are situations where some debt might serve you, it can also be a deductible. A friend of mine used to say the only people banks want to lend money to are those who don't need it.

    American society is much more heavily debtrun than ours too. Just as a very generalised concept we don't have medical debt, much less student debt, few carloans and people generally do not own a lot of interestbearing creditcard debt.

    There was this reality show in the US where they renovated the house of a (deserving) family. I totally blank on the name, obnoxious hosts and a big reaveal at the end, am sure you all know the one I mean. One that sticks in my head is where they renovated the house and gave the familjy 2 brand new F150 trucks. Grand, but none of this is free in upkeep. They probably can't afford to keep all of that.

  13. - Top - End - #73
    Barbarian in the Playground
     
    MindFlayer

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    Default Re: I Won The Lottery

    Charging income tax on tax refunds makes sense only, I think, if you get to deduct the original tax withholding.

  14. - Top - End - #74
    Firbolg in the Playground
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    Default Re: I Won The Lottery

    Nope, they just count it as income. Don't even give you interest on it. But we have to manage our own taxes instead of turning that over to the government.

    Oh, and you can only amend for three years, but they can audit for seven (or more, if they find a pattern of fraud--this is part of the issues at hand with that NRA lawsuit you probably saw in the news).

    Yeah, medical debt is a thing here. For now. I'll make a sizeable bet that Covid is going to rearrange the medical and insurance industries.

  15. - Top - End - #75
    Firbolg in the Playground
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    Default Re: I Won The Lottery

    Those are people just plugging the funding into an existing business plan. It's the people without a strong gameplan who get into lots of trouble (including dead--too many lottery winners get killed for the money).

  16. - Top - End - #76
    Pixie in the Playground
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    Default Re: I Won The Lottery

    Quote Originally Posted by Lvl 2 Expert View Post
    I was there, I took his picture!

    Anyways, maybe a bit late, congratulations on your winnings. Do you have any plan on spending the money that you won? You are rich now and can now.

  17. - Top - End - #77
    Bugbear in the Playground
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    Default Re: I Won The Lottery

    Soooo...
    April 1st, paid to Bartmanhomer, signed by Serena Williams?

  18. - Top - End - #78
    Ettin in the Playground
     
    Chimera

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    Default Re: I Won The Lottery

    Quote Originally Posted by Cicciograna View Post
    Soooo...
    April 1st, paid to Bartmanhomer, signed by Serena Williams?
    Yeeessss.
    The multiple fonts on the check are a nice touch.

  19. - Top - End - #79
    Pixie in the Playground
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    Default Re: I Won The Lottery

    So this is kind of relevant. The best April Fools prank I ever did: I worked for an MMORPG company, and a couple of the artists and I turned every single player character into a stick figure for the day. We did not even tell the rest of our team, so pranked them too.

  20. - Top - End - #80
    Ogre in the Playground
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    Default Re: I Won The Lottery

    Quote Originally Posted by tyckspoon View Post
    Historical stock market average is about 7%, IIRC. Anybody telling you they can do better than that over a long timeline probably has a significant financial interest in getting you to give them your money.
    Disagree. By definition, that ~7% figure of yours is what a monkey would make for you over a long timeline, if you took away his typewriter because he's not producing the works of Shakespeare fast enough for you, and instead gave him means to select stocks for you.
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  21. - Top - End - #81
    Titan in the Playground
     
    AssassinGuy

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    Default Re: I Won The Lottery

    Quote Originally Posted by snarlynarwhal View Post
    So this is kind of relevant. The best April Fools prank I ever did: I worked for an MMORPG company, and a couple of the artists and I turned every single player character into a stick figure for the day. We did not even tell the rest of our team, so pranked them too.
    Was this for Everquest by chance? Because i remember that! That was amazing.
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  22. - Top - End - #82
    Ettin in the Playground
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    Default Re: I Won The Lottery

    Quote Originally Posted by Rogar Demonblud View Post
    I'm not sure how it works where you live (Sweden, isn't it?), but here in the U.S. the state takes 50-70% of the lottery money off the top and uses it to fund the bureaucracy and various political pet projects (for instance, North Dakota hired private security forces to go after the protestors during the DAPL thing a couple years ago). Youth sports are generally controlled by the school districts, and paid for out of property taxes (and some ticket sales).

    Naturally, there is no such thing as transparency involved. Yet another thing to invest sweat equity in.
    It´s quite the opposite in Germany. Tax and dues are pretty much purpose-bound and the different levels of government have only access to what they directly earned.

    State lottery is strictly tied to the "social projects" fund, which can only be "misused" in case of a state of emergency.

  23. - Top - End - #83
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    tyckspoon's Avatar

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    Default Re: I Won The Lottery

    Quote Originally Posted by lio45 View Post
    Disagree. By definition, that ~7% figure of yours is what a monkey would make for you over a long timeline, if you took away his typewriter because he's not producing the works of Shakespeare fast enough for you, and instead gave him means to select stocks for you.
    Yup. Literal random selections should get you about that much if you're selecting across the whole market, and there have been cases (admittedly kind of stunt studies) where actual animals, when given some means of 'picking' stocks, have met or beaten the market average. The people who claim they can do better than this and that you should give them your money to invest because they can make better choices are usually compensated directly based on how much money they are handling - they are getting a percentage of either the trades they make on your behalf, or are being paid a percentage of the funds in the accounts.

    And.. sure, you might find places that do beat the market average. But if they're making 8, 9% returns while taking 5% of the profits, that's actively worse than getting 7% back on an investment vehicle with few to no costs to invest.

  24. - Top - End - #84
    Firbolg in the Playground
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    Default Re: I Won The Lottery

    Yeah, gross versus net is a serious disconnect for a lot of people.

  25. - Top - End - #85
    Ogre in the Playground
     
    ElfPirate

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    Default Re: I Won The Lottery

    Quote Originally Posted by tyckspoon View Post
    The people who claim they can do better than this and that you should give them your money to invest because they can make better choices are usually compensated directly based on how much money they are handling - they are getting a percentage of either the trades they make on your behalf, or are being paid a percentage of the funds in the accounts.
    There is a slight truth to the idea of "active" investments as conceivably some people have better insights (also this is usually illegal so you know the kind of people you are in business with!). But some have other advantages in information, like they get the first call about some interesting news (movie style!). Or are allowed to "sit closer" to the central server of a stockexchange and see the orders everyone else place (and amke their own) before everyone else's actually take place. And this latter is a real thing and I can't even conceive how it is still legal.

    On a more rational level (and less illegal or morally dubious) it can also pay not to be subject to your own bad judgement and heard behaviour. Buying when mrkets are hot and panic selling when they've crashed is a "common folk" trope for a reason.

    Generally speaking I agree though, it's very hard to make "active investement" work for you rather than the person handling your money. Almost all financial systems are hugely lopsided to the detriment of the normal person. The price charge for this kind of based on short term numbers screws you long term because they have long since figured out how to pad their own nest. In other words, if you could pay a fraction of the cost they currently charge you (even jsut 1% off the top is huge) it might actually be worth it.

    Quote Originally Posted by Rogar Demonblud View Post
    Yeah, gross versus net is a serious disconnect for a lot of people.
    Very much so. I was looking at mutualfunds and even the most lackadaisically managed by the bank was skimming 1-1.5% off the top for anything remotely interesting. And if I knew they'd be actually doing the work I might pay that to access stuff like emerging markets, but most banks just buy shares in even larger mutualfunds so you end up with 2-4 "layers" sucking management fees off before you get to an actual investment.

  26. - Top - End - #86
    Troll in the Playground
     
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    Default Re: I Won The Lottery

    Quote Originally Posted by Willie the Duck View Post
    Yeeessss.
    The multiple fonts on the check are a nice touch.
    Not to mention that I realized too late the line with "OLG" on it is the signature line, and I shouldn't have been extending the check down to fit an extra line on.
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  27. - Top - End - #87
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    Default Re: I Won The Lottery

    UK lottery winnings are tax free since it's a form of gambling, and 25% of all ticket sales are legally required to go to 'good causes', generally community groups and non-profits.

    So in addition to the not technically impossible chance that you might become a millionaire, you're also indirectly giving 50p to a worthwhile cause. Which makes me feel better about throwing money at the newsagent for those little pink slips of paper.
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  28. - Top - End - #88
    Ettin in the Playground
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    Default Re: I Won The Lottery

    Aw, dang. I was waiting until October 1 so I could make a snarky post about how I won "half of the lottery," given that it would be half-way to the next April Fool's Day. But I forgot and missed it. So, uh...I guess if this thread is still alive in six months I better remember to make a joke about it then?

  29. - Top - End - #89
    Pixie in the Playground
     
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    Default Re: I Won The Lottery

    50 Mil sure would be nice.
    But you gotta play to win and alas, im too cheap to play.

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