The Mega Millions lotto had no winner this last drawing, so it's rolled over again, making the jackpot of $365 million one of the largest ever.
The amount is staggering, isn't it? Over a third of a billion dollars. It would be nice (an understatement) to win it, but even nicer (read:greedy) to be the sole winner.
The $365 million is for an annuity which would be paid out over 26 years. When you purchase a ticket, you have the option of the annuity or taking a lump sum, which for this drawing would be $255.1 million. After federal taxes, that figure would be $165.815 million. (No state tax in Texas!) I've always thought I would opt for this method of payout, considering what my age would be after 26 years. I have to face the fact that I most likely wouldn't live to see the last yearly payments. (or wouldn't remember my name or that I had ever won the lottery) That's not the only depressing fact to take into consideration - the interest on certificates of deposits is pathetically low. They vary all the time and from bank-to-bank, but some yearly CDs pay less than 1% a year and 5-yr CDs anywhere from 1.7- 2%.
Let's say you blew through 10 million right off the bat and allotted another million a year to spend until your jumbo 5-yr CDs matured. (of course, you could make a dab of interest on unspent money, but let's disregard that for the sake of simplicity.) $150 million @ 2% would, with simple interest (not figuring compound rates) get you $3 million per year. (15 million+ over the five yr. period) Of course, Uncle Sam would want his 35%*, so the yearly net would be $1.95 million. I think most people could live on that.(You could also make some interest on the earned interest if you reinvested it.) You could then leave the huge sum of money - the 150 million- to your family. (Although in some cases, you *might* want to lie to them and tell them you're leaving most of it to charity. Otherwise they might want the will to be read a little early, if you get my drift. It's happened.)
On the other hand, if you did opt for the annuity, the income is much better. Before taxes, the yearly payout would be $13.692+ million a year with a net of $8.9 million. That would give you a monthly take-home income of a little more than $741, 666, a weekly income of $171, 153 and change - which works out to $24,383.56 a day.
Or, you could look at it this way: $1015.98 an hour. You could afford to pay someone minimum wage (Federal min. wage is $7.25) - along with some basic benefits - just to screen your calls from all the distant kinfolk and scam artists who would want some of your new-found riches.
That leaves you with a thousand bucks an hour for 26 years. That's $1000 per hour, every hour of every day of every week of every month for 26 years. Rain or shine, asleep or awake, it's going into your bank account.
Not bad wages, huh?
*I've read that 35% federal tax rate might soon go up to 39% if the current administration has its way. It's not just the President and the Democrats in Congress - a growing percentage of the population is of the mind that the rich don't pay enough taxes. Winning the lottery wouldn't just change your life, it might also change your political affiliation. -wink-
Edit: I don't mean to insult anyone w/ the political reference. I expect you...or I...would keep our same core political beliefs as we had before winning the lottery, BUT I'd think...would hope...we would be more "liberal" in regards to charity and more "conservative" fiscally.
UPDATE: The announced jackpot is 363 million. I guess the 365 number was the estimate. Usually, though, when a jackpot is this large, the number goes up because the prize is tied into a percentage of tickets sold. So, my calculations are incorrect. They were, anyway. I don't know what caused me to make the mistakes, but I did. (I used my computer calculator, but I guess you need to be semi-smart to use it. That lets me out.) So sue me. Wait until I win the lottery, though, because you damn sure wouldn't get anything now.
I read an article this morning which mentioned "lottery fever" - when people get excited by the huge jackpot and buy more tickets, often more than they can afford. It also touted some "expert" who said a lottery player should always pick their own numbers, not allow the machine to choose them. That doesn't make any sense, because one number is just as good as any other. (the winning number notwithstanding! -grin-) I always get a "quick pick" because my old set of numbers never did much good. I also had a fear that if I ever did quit playing them or change to another, they would come up. That could happen anyway, I suppose.
I also bought but one ticket. Buying two tickets doesn't do much to increase your odds of winning, not by my thinking. If the odds are one in ten million, then an extra ticket would make it two in ten million. I suppose you've doubled your chances, but....
The amount is staggering, isn't it? Over a third of a billion dollars. It would be nice (an understatement) to win it, but even nicer (read:greedy) to be the sole winner.
The $365 million is for an annuity which would be paid out over 26 years. When you purchase a ticket, you have the option of the annuity or taking a lump sum, which for this drawing would be $255.1 million. After federal taxes, that figure would be $165.815 million. (No state tax in Texas!) I've always thought I would opt for this method of payout, considering what my age would be after 26 years. I have to face the fact that I most likely wouldn't live to see the last yearly payments. (or wouldn't remember my name or that I had ever won the lottery) That's not the only depressing fact to take into consideration - the interest on certificates of deposits is pathetically low. They vary all the time and from bank-to-bank, but some yearly CDs pay less than 1% a year and 5-yr CDs anywhere from 1.7- 2%.
Let's say you blew through 10 million right off the bat and allotted another million a year to spend until your jumbo 5-yr CDs matured. (of course, you could make a dab of interest on unspent money, but let's disregard that for the sake of simplicity.) $150 million @ 2% would, with simple interest (not figuring compound rates) get you $3 million per year. (15 million+ over the five yr. period) Of course, Uncle Sam would want his 35%*, so the yearly net would be $1.95 million. I think most people could live on that.(You could also make some interest on the earned interest if you reinvested it.) You could then leave the huge sum of money - the 150 million- to your family. (Although in some cases, you *might* want to lie to them and tell them you're leaving most of it to charity. Otherwise they might want the will to be read a little early, if you get my drift. It's happened.)
On the other hand, if you did opt for the annuity, the income is much better. Before taxes, the yearly payout would be $13.692+ million a year with a net of $8.9 million. That would give you a monthly take-home income of a little more than $741, 666, a weekly income of $171, 153 and change - which works out to $24,383.56 a day.
Or, you could look at it this way: $1015.98 an hour. You could afford to pay someone minimum wage (Federal min. wage is $7.25) - along with some basic benefits - just to screen your calls from all the distant kinfolk and scam artists who would want some of your new-found riches.
That leaves you with a thousand bucks an hour for 26 years. That's $1000 per hour, every hour of every day of every week of every month for 26 years. Rain or shine, asleep or awake, it's going into your bank account.
Not bad wages, huh?
*I've read that 35% federal tax rate might soon go up to 39% if the current administration has its way. It's not just the President and the Democrats in Congress - a growing percentage of the population is of the mind that the rich don't pay enough taxes. Winning the lottery wouldn't just change your life, it might also change your political affiliation. -wink-
Edit: I don't mean to insult anyone w/ the political reference. I expect you...or I...would keep our same core political beliefs as we had before winning the lottery, BUT I'd think...would hope...we would be more "liberal" in regards to charity and more "conservative" fiscally.
UPDATE: The announced jackpot is 363 million. I guess the 365 number was the estimate. Usually, though, when a jackpot is this large, the number goes up because the prize is tied into a percentage of tickets sold. So, my calculations are incorrect. They were, anyway. I don't know what caused me to make the mistakes, but I did. (I used my computer calculator, but I guess you need to be semi-smart to use it. That lets me out.) So sue me. Wait until I win the lottery, though, because you damn sure wouldn't get anything now.
I read an article this morning which mentioned "lottery fever" - when people get excited by the huge jackpot and buy more tickets, often more than they can afford. It also touted some "expert" who said a lottery player should always pick their own numbers, not allow the machine to choose them. That doesn't make any sense, because one number is just as good as any other. (the winning number notwithstanding! -grin-) I always get a "quick pick" because my old set of numbers never did much good. I also had a fear that if I ever did quit playing them or change to another, they would come up. That could happen anyway, I suppose.
I also bought but one ticket. Buying two tickets doesn't do much to increase your odds of winning, not by my thinking. If the odds are one in ten million, then an extra ticket would make it two in ten million. I suppose you've doubled your chances, but....
4 comments:
When looking up the link for the man killed by his relatives, I found some other articles I gave a quick glance. In one message board, someone quoted a survey that said lottery winners are among the most unhappy people.
That's hard to believe.
I don't see how it could be in my case. I've always heard "money can't buy happiness", but I think it darn sure could rent happiness.
It would be nice to never have to worry about your utility bills ever again, being able to buy brand name food instead of the discount store brands, to not worry if your car breaks down if you'll have the money to fix it, etc.
If lottery winners ARE unhappy, I suspect family and friends are the root cause. I don't think my family/friends would cause me grief because I'd want to share my new-found wealth with them however I could.
"However I could" is the operative phrase here, though. I'm not for sure what the exact percentage is, but there is a gift tax on given money and I think it's a substantial percentage. I'd hate to have to fork over...let's say...300k to give someone a million.
I do know that you can give something like 11k per year to a person for a total of a million in your lifetime. It might just stir up resentment from the person. "He gets a third of a billion bucks and all I get is a lousy 11k?!?!!
I've also found out that paying for people's education and medical bills isn't taxable. I would certainly do that for my family and close friends.
I'm not sure how it would fly with the IRS, but I bet you could start a business and hire your kinfolk and/or friends and pay them a great salary. You could invest in a business and it really wouldn't matter if it made money, would it? It might be a pretty good tax shelter, but unless they've changed the rules, there are only so many years you can take a loss and deduct it.
Yeah, winning the lottery might very well turn out to be a headache, but it's one I'd love to have. You could buy all the aspirin you need.
I have a family friend who won the local tri-state lottery back in the early 80's It was 68 million or there abouts.
They used your plan Mike. They enjoyed their money, shared it with family members, set up a couple of businesses that interested them, moved to a beautiful home, invested wisely.
They periodically host the most amazing family vacations, flying everyone to far off places for a week or two. If you met them you'd never think they were wealthy (unless you knew their address)
I agree that the unhappy lotto winners must have trouble dealing with friends and family. Me? I'd love to rent me some happiness with a big lotto win.
I sometimes make the joke that the lottery is a tax on stupid people. I read an article a while back that a large percentage of people who play really think they'll win the lottery. I play now 'n then but am realistic about the odds.
I also heard one comic say the odds of winning the lottery are about the same whether you play or not. Funny, but while the odds of winning are hugely against you, the odds if you don't play are exactly zero.
Read an article the other day about a guy who had the winning ticket for a big jackpot (think it was around 6-8 million)but he had waited 3 days past the due date. He's fighting it, but I doubt he'll win.
There was another case in the news recently about a man who was forced to share his jackpot. He had been in a workplace pool but claimed he had bought the winning ticket on his own. If he was lying, then the court ruling was a good thing. If he was telling the truth, it would really suck.
That's cool about your friends, Barb. I don't see how winning would really change me. Other than buying my idea of a dream home (out in the country w/ some land for animals, garden, etc) I don't think I would change from the person I am today. I'm sure I wouldn't be nearly as frugal as I've been forced to be, but I also can't see my splurging on a half-dozen luxury cars or a huge mansion.
The Mega Millions drawing is tonight. I've got to get out and purchase my ticket. A couple of bucks for a long-shot dream is worth the investment.
Blathered on - as usual - but wanted to add that I watch a TLC show when it's on "I Won the Lottery" think it's called. There have been a few sad cases of people losing their winnings (blowing it or getting bilked) but those are folks who won "modest" jackpots of a million or two or less. I've known people who pissed away big settlements.
On one of the shows there was a guy who had won a big jackpot and he had a new girlfriend. - ahem - She looked right in the camera and said the money didn't matter. I'm a fair judge of BS and that's what I called out when I saw the show. She was pretty and he...well...he wasn't. She wouldn't have looked at him twice if she hadn't seen the bulge in his pants. (his wallet!) I might be wrong, but I've always been the suspicious type.
Think of how careful you'd have to be with the money. That might be part of the misery I was talking about in my other comment. It'd be hard to trust someone with that amount of money. I sure wouldn't put all the money in the care of a single financial planner.
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