Where would you go for financial guidance if you win the Megamillions?

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CULater
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Where would you go for financial guidance if you win the Megamillions?

Post by CULater » Wed Oct 17, 2018 4:03 pm

Just wondering how one should cope with winning a multi-million dollar lottery pot. Where would you go for effective, ethical financial advice about how to handle all that money and not end up in a miserable mess? First of all there's the problem of all the relatives and friends. Second of all there's the problem of all the scumbags coming after you for your money. Third of all, how in the heck would you manage all that money effectively and not be completely overwhelmed? Should you just give it all away? Like to know how people would handle this, just in case I win the $900 Mil on Friday night. :moneybag
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by DaftInvestor » Wed Oct 17, 2018 4:05 pm

Sure - this is actionable :)

I would hire security staff to start after reading another thread about kidnapping...but who could I trust.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by JoMoney » Wed Oct 17, 2018 4:14 pm

I would probably setup some sort of irrevocable trust with a decent chunk of it to ensure I was well taken care of for the remainder of my days. That would likely require some legal advice and lawyers.
My asset allocation would probably be the same as it is now. Essentially what Warren Buffett suggested in his bequest to his wife 90% in a low-cost S&P 500 index fund and the rest in short-term treasuries.
I don't have a taste for too much opulence, a lot of flashy 'stuff' seems pretty frivolous to me, and to the extent that I think it's wasteful it bothers me. I would probably spend the rest of my days trying to find personally meaningful 'investments' and ways to give it way. Bill Gates seems to have a pretty good model for what the uber rich can do with their money.
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by bsteiner » Wed Oct 17, 2018 4:15 pm

You won't actually get $900 million or whatever amount they advertise. They'll discount the annual payments to present value if you take a lump sum. Then you'll pay income taxes (37% Federal plus state and local, if any). They may not withhold the full amount but you'll still have to pay it.

It's up to you if you want any fancy or exotic investments, but you'll do fine investing the way people here do.

You should then think about estate planning. If you want to make any charitable gifts, whether outright or in a charitable foundation or charitable lead trust, you'll want to do it this year so the deduction will offset the income. Trusts and estates lawyers in firms with good trusts and estates practices have seen others with that level of wealth. Most of them obtained their wealth in other ways, though some of them may have had a liquidity event such as the sale of a business.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by wrongfunds » Wed Oct 17, 2018 4:17 pm

I will ask here. Where else would you find better financial advice? Oh, and definitely allocate half of the money for LTC. DEFINITELY LTC.

And then I will move this topic to "Investing - Helping with Personal Finances"
Last edited by wrongfunds on Wed Oct 17, 2018 4:21 pm, edited 1 time in total.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by Thegame14 » Wed Oct 17, 2018 4:19 pm

I always wonder where do you put the money if FDIC only insures $250K per account? I assume some kind of brokerage account. I would just invest in tax free muni's and take the interest and safety and then prob give half of that interest away each year to local people in need, shelters, food banks, etc for my local community. Initially I would pay off all my close friends and relatives houses and college funds for all my kids, nieces and nephews, and probably have to move due to issues you said above once people know who you are and how much you won, peace will be hard to come by.

I guess I would google my state and town with lottery lawyers and financial advisors and interview 2-3 and see how they have handled past winners and how are those winners doing today.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by wrongfunds » Wed Oct 17, 2018 4:22 pm

I guess I would google my state and town with lottery lawyers and financial advisors and interview 2-3 and see how they have handled past winners and how are those winners doing today.
You should do that *now* before the winners are announced. If you wait until you are the winner and *then* start doing the interviews, everybody would *know* that you are the winner and then you will not be able to keep your privacy. I am just helping you.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by CULater » Wed Oct 17, 2018 4:22 pm

bsteiner wrote:
Wed Oct 17, 2018 4:15 pm
You won't actually get $900 million or whatever amount they advertise. They'll discount the annual payments to present value if you take a lump sum. Then you'll pay income taxes (37% Federal plus state and local, if any). They may not withhold the full amount but you'll still have to pay it.

It's up to you if you want any fancy or exotic investments, but you'll do fine investing the way people here do.

You should then think about estate planning. If you want to make any charitable gifts, whether outright or in a charitable foundation or charitable lead trust, you'll want to do it this year so the deduction will offset the income. Trusts and estates lawyers in firms with good trusts and estates practices have seen others with that level of wealth. Most of them obtained their wealth in other ways, though some of them may have had a liquidity event such as the sale of a business.
It seems to me that having that kind of capital to invest might require some good professional advice and guidance. Where would you go to get it? Who would you hire? Goldman Sachs, or some other large firm? I'd probably want to extend into other kinds of investments than index funds. There are a myriad of tax issues, I'm sure. I don't know how to do rich.
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by CULater » Wed Oct 17, 2018 4:25 pm

Hey, one thing for sure. I won't have to read any more threads about long-term care insurance or safe withdrawal rates!
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by sailaway » Wed Oct 17, 2018 4:25 pm

A lawyer specializing in setting up non profits.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by JoMoney » Wed Oct 17, 2018 4:36 pm

CULater wrote:
Wed Oct 17, 2018 4:22 pm
... I'd probably want to extend into other kinds of investments than index funds. There are a myriad of tax issues, I'm sure...
You could certainly create "a myriad of tax issues" by getting involved in more complicated investments. What sort of investments, outside of index funds, are you thinking you would want to get involved with ... and why?
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by bsteiner » Wed Oct 17, 2018 4:38 pm

deleted as duplicate
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by bsteiner » Wed Oct 17, 2018 4:38 pm

deleted as duplicate
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by bsteiner » Wed Oct 17, 2018 4:39 pm

CULater wrote:
Wed Oct 17, 2018 4:22 pm
bsteiner wrote:
Wed Oct 17, 2018 4:15 pm
You won't actually get $900 million or whatever amount they advertise. They'll discount the annual payments to present value if you take a lump sum. Then you'll pay income taxes (37% Federal plus state and local, if any). They may not withhold the full amount but you'll still have to pay it.

It's up to you if you want any fancy or exotic investments, but you'll do fine investing the way people here do.

You should then think about estate planning. If you want to make any charitable gifts, whether outright or in a charitable foundation or charitable lead trust, you'll want to do it this year so the deduction will offset the income. Trusts and estates lawyers in firms with good trusts and estates practices have seen others with that level of wealth. Most of them obtained their wealth in other ways, though some of them may have had a liquidity event such as the sale of a business.
It seems to me that having that kind of capital to invest might require some good professional advice and guidance. Where would you go to get it? Who would you hire? Goldman Sachs, or some other large firm? I'd probably want to extend into other kinds of investments than index funds. There are a myriad of tax issues, I'm sure. I don't know how to do rich.
There aren't really any complicated income tax issues. The prize is ordinary income.

You would have to decide whether to take a lump sum or installment payments. If you can't create a spreadsheet to do that, you might have someone, perhaps an accountant or a planner who works on a time basis, help you do that.

You would have to decide whether to make any charitable gifts, and whether to do them outright, in a charitable foundation, or a charitable lead trust. That would be more of a personal choice than a tax choice.

You would have to review your estate planning. You might want to make some gifts, using the same techniques that people with taxable estates use.

Most of our clients at that level earned their money either from real estate or by managing successful hedge funds. The real estate ones invest their assets in real estate, and the hedge fund ones invest their money in their hedge funds.

I wouldn't hire a broker at Goldman Sachs or any other brokerage firm. I might or might not invest a small portion of the money in real estate deals where I knew the person putting the deal together, or hedge funds where I knew the manager, but I wouldn't have a broker put me into deals or funds where I didn't know the person putting the deal together or funds where I didn't know the manager.

I might work less and spend more time speaking and writing. I would probably buy an apartment in Manhattan and a home in Florida. But I would invest most of the money the way people here invest money.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by Jordan4FI » Wed Oct 17, 2018 4:43 pm

Put $2,000,000 in every Vanguard fund and watch the show...

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by triceratop » Wed Oct 17, 2018 4:44 pm

I would go to Bogleheads.org. We even come recommended!
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by JoMoney » Wed Oct 17, 2018 4:48 pm

Jordan4FI wrote:
Wed Oct 17, 2018 4:43 pm
Put $2,000,000 in every Vanguard fund and watch the show...
You would probably have a lot of overlap. A simple 3 fund portfolio would cover all the bases, and a large enough balance in those might qualify you for the institutional level funds with even lower expense ratios.
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by MathWizard » Wed Oct 17, 2018 4:50 pm

I won't win. (You can't lose if you don't play.)

However, with the hypothetical, I would not worry about the financial side, but I would probably ask who the
lottery board would suggest to talk to about non-financial situations unique to the lottery that I have not thought
about.
For example, the lottery tickets I have seen say that by signing to receive the money you consent to the use of your
picture for promotions of the lottery. I think there may be a few states that you can remain anonymous, but very few,
so how do you deal with your name and face being splashed in the local paper about having won a huge sum of cash.
My guess is quit your job, move, leave no forwarding address, change phone number and delete any
social media accounts are a few of the first steps.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by Ice-9 » Wed Oct 17, 2018 4:53 pm

A non-Boglehead friend not particularly interested in financial matters who plays the lottery regularly asked me a few years ago what I would do with the money if I won a jackpot on the order of hundreds of millions of dollars.

I said I would take the lump sum, first put aside enough for the taxes, then before any other spending invest my current annual salary in a Treasury Inflation Protected Security maturing each of the next 30 years, then...

And he cut me off and started telling me about how he'd buy the neighborhood bar we were sitting in and pay the waitresses there more salary because they work hard and deserve it. I bought him another beer and tipped the waitress well.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by Jack FFR1846 » Wed Oct 17, 2018 4:55 pm

First, I'd buy some wheel spacers so my Wrangler tires wouldn't rub when doing offroading. Then some skid plates. Then I'd put the money into Fidelity in the allocation I've set up already.
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by Jordan4FI » Wed Oct 17, 2018 4:57 pm

JoMoney wrote:
Wed Oct 17, 2018 4:48 pm
Jordan4FI wrote:
Wed Oct 17, 2018 4:43 pm
Put $2,000,000 in every Vanguard fund and watch the show...
You would probably have a lot of overlap. A simple 3 fund portfolio would cover all the bases, and a large enough balance in those might qualify you for the institutional level funds with even lower expense ratios.

Well ya, but this is about being rich and just playing with it... I would just see what happens... and not be around to really pay attention, just send myself 3K per fund per year to my checking account and have my tax people take care of that stuff.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by Jordan4FI » Wed Oct 17, 2018 4:59 pm

bury 1/4 of it and send out only 3 maps with clues.. one in a bottle, one online and one slid into a random magazine on the street.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by dknightd » Wed Oct 17, 2018 5:03 pm

I'd see if I could find a way to claim the money and not let my identity be disclosed.
So, once I found I had the winning ticket, I'd be looking for legal advice.
I would not sign the back of the ticket. I'd see if I could set up some kind of legal loophole that would let me stay anonymous.
I assume there are lawyers who have expertise in this area. Hopefully google would find them for me.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by furwut » Wed Oct 17, 2018 5:03 pm

Some states allow prizes to be claimed anonymously. I would wait awhile to let interest die down, bit not too long it becomes a mystery, and engage a lawyer who works with high wealth individuals as a cut out. I would think long and hard about telling people. Once the secret is out everyone will be coming at you for a “loan”.

Taking the lump sum I would set aside enough to (a) purchase the house of my dreams one day and (b) establish a bond ladder sufficient to keep me wealthy for the rest of my life. The remainder I would do the Buffet thing.

With the income from the bond ladder and investments I would research and contribute to worthy causes. That would be my “job”.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by texasdiver » Wed Oct 17, 2018 5:04 pm

I would take the 20-year payment plan not the reduced lump sum amount because I don't have anything immediate that I'd need that money for.

I'd pre-pay everything I can think of (college tuition for the kids, pay off the mortgage, gold-plated LTC policy, etc.

I'd consult the WIKI as regards tax efficient investment planning and dump the rest into taxable Vanguard accounts that complement our existing tax-deferred retirement savings.

I'd do some big family trips to places that are on our bucket list and I'd wait at least a year before making any big financial decisions about buying stupid things like vacation homes or yachts or investments in businesses or charities.

And if I had any questions I'd come straight here.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by Momus » Wed Oct 17, 2018 5:05 pm

50/50 allocation and travel the world forever. Maybe, climb a bunch of summits.

Stocks crashed 50% dump the remaining bond to stocks 100% allocation and sleep well at night. You can literally live on 5-10% of that money even if stocks down 90%.

Financial guidance? Who needs one.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by wrongfunds » Wed Oct 17, 2018 5:16 pm

This topic still alive? Are we going to be making snide comments until Friday night?

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by MotoTrojan » Wed Oct 17, 2018 5:21 pm

Not sure on the allocation, but I would use a 3-fund portfolio with tax-exempt bonds. I would focus professional assistance on estate/tax-planning.

I may allocate some money to angel-investing; for fun, not income. Perhaps $5M if I had a $250M after-tax sum.

I'd take care of my parents and do some traveling. Not sure about toys but anything I'd be into would be fairly reasonable.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by wrongfunds » Wed Oct 17, 2018 5:28 pm

dknightd wrote:
Wed Oct 17, 2018 5:03 pm
I'd see if I could find a way to claim the money and not let my identity be disclosed.
So, once I found I had the winning ticket, I'd be looking for legal advice.
I would not sign the back of the ticket. I'd see if I could set up some kind of legal loophole that would let me stay anonymous.
I assume there are lawyers who have expertise in this area. Hopefully google would find them for me.
If you don't sign the ticket, are you not worried about ticket being stolen? For the moment, assume your number came up. Now what exactly will you do with that ticket until it is handed over to the lottery official for the verification. Where do you safe keep it? Would you trust your local bank locker? But what is your contingency plan? I mean, what if the bank catches fire? The more you wait, you are increasing the chances that the ticket might get destroyed. And every day you delay picking up your money, you will be losing 27 thousand dollars in interest.

I don't think I could ever afford to lose $27K per day even if I were a zillionair.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by EyeYield » Wed Oct 17, 2018 5:50 pm

I would have absolutely none of the problems imagined by the OP.

I have a plan in place for this type of windfall.

Call Jack Bogle and offer my proposal to build an educational system, from K-12 on up to a four year university and grad school, that incorporated the Bogle principles into all the other regular areas of study. Any money left over would be used for scholarships. You can call it EyeYield’s Folly.

Denied that, I would write a couple of checks to philanthropy organizations that I like. Done.

I suffer from non desire for material things syndrome, so I don’t dream about sparkly stuffs.
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by serbeer » Wed Oct 17, 2018 5:53 pm

wrongfunds wrote:
Wed Oct 17, 2018 5:28 pm
dknightd wrote:
Wed Oct 17, 2018 5:03 pm
I'd see if I could find a way to claim the money and not let my identity be disclosed.
So, once I found I had the winning ticket, I'd be looking for legal advice.
I would not sign the back of the ticket. I'd see if I could set up some kind of legal loophole that would let me stay anonymous.
I assume there are lawyers who have expertise in this area. Hopefully google would find them for me.
If you don't sign the ticket, are you not worried about ticket being stolen? For the moment, assume your number came up. Now what exactly will you do with that ticket until it is handed over to the lottery official for the verification. Where do you safe keep it? Would you trust your local bank locker? But what is your contingency plan? I mean, what if the bank catches fire? The more you wait, you are increasing the chances that the ticket might get destroyed. And every day you delay picking up your money, you will be losing 27 thousand dollars in interest.

I don't think I could ever afford to lose $27K per day even if I were a zillionair.
good point. still privacy is worth a lot more in a situation like that, so yes, gotta move fast. So, still would
a) rent bank safe deposit box in local bank and lock up the ticket in it
b) contact trust lawyer who already handled similar cases--eg the one mentioned in this article https://www.forbes.com/sites/robertpagl ... he-lottery
c) tell my wife
-- eh, not necessarily in this order :)

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by MotoTrojan » Wed Oct 17, 2018 5:58 pm

Interesting thoughts on where to keep the ticket in the meantime... reminds me of the bitcoin related stories of people realizing years later than had $10M's (or $100M's) in a hard drive that was now in a landfill :). One story I recall the person offered a reward for access but regulations wouldn't even allow them to start the search.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by michaeljc70 » Wed Oct 17, 2018 6:07 pm

I don't play the lottery but...my first inclination would be to consult with a CPA/lawyer to see if incorporating or something would save me on taxes or I needed some legal shielding. However, I doubt any of that would work. I would just stick to what I am doing (4 fund portfolio). I actually would consider going to a 2 fund portfolio (100% stocks) as I wouldn't really need the cushion from bonds. I'd be posting on here as to whether I should DCA or lump sum it into the market :shock:

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by dknightd » Wed Oct 17, 2018 6:22 pm

wrongfunds wrote:
Wed Oct 17, 2018 5:28 pm

If you don't sign the ticket, are you not worried about ticket being stolen? For the moment, assume your number came up. Now what exactly will you do with that ticket until it is handed over to the lottery official for the verification. Where do you safe keep it? Would you trust your local bank locker? But what is your contingency plan? I mean, what if the bank catches fire? The more you wait, you are increasing the chances that the ticket might get destroyed. And every day you delay picking up your money, you will be losing 27 thousand dollars in interest.

I don't think I could ever afford to lose $27K per day even if I were a zillionair.
Honestly, I do not know. It has been safe in my wallet for now. I suppose I'd move it to my safe deposit box at the local bank. Probably safer than the wallet in my back pocket. Maybe I should take pictures of it? I'm not too worried. Chances of me winning are slim. Chances of somebody stealing it from me, or it burning up, are also slim. I'm not concerned about $27K/day. I already promised $1M to everybody who works in the store ;)

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by dknightd » Wed Oct 17, 2018 6:24 pm

michaeljc70 wrote:
Wed Oct 17, 2018 6:07 pm
I'd be posting on here as to whether I should DCA or lump sum it into the market :shock:
If I win, I'll probably stop posting here ;) Or at least you will never know 8-)

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by michaeljc70 » Wed Oct 17, 2018 6:43 pm

dknightd wrote:
Wed Oct 17, 2018 6:24 pm
michaeljc70 wrote:
Wed Oct 17, 2018 6:07 pm
I'd be posting on here as to whether I should DCA or lump sum it into the market :shock:
If I win, I'll probably stop posting here ;) Or at least you will never know 8-)
I'm under the impression, that adjusted for chance, there are a lot of people posting here richer than I am winning the lottery. :D

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by ponyboy » Wed Oct 17, 2018 6:45 pm

I just wish someone would win already. Then we could stop hearing about it. All this hypothetical stuff...blah. Buy a ticket, lose $2...get on with your life.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by RickBoglehead » Wed Oct 17, 2018 6:59 pm

I would look for legal advice, not financial advice, at least initially. Setting up the proper legal entities to shelter the riches from the public eye, and also to possibly claim the prize without divulging my identity.

On the financial side, I'd be looking for tax advice. I wouldn't do any esoteric investments. I would setup several different groups of accounts, one set to handle normal daily expenses, another set for real estate (acquiring multiple homes), and one set for the toy budget - buying multiple cars, boats, etc.

I would want to live on no more than $1 million a year, spend no more than $50 million on homes, and maybe $2 million on toys. Round that to $55 million. The remaining call it $245 million would be invested to yield a return of 5% a year, i.e. $1,225,000, which would yield roughly $1 million after tax, paying the annual expenses.

Enough wasted time, not buying a ticket.
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by michaeljc70 » Wed Oct 17, 2018 7:02 pm

Just to break it up a little, I thought I'd post this I recently saw. The guy won $19 million in the lottery and wound up robbing banks!

https://www.marketwatch.com/story/how-o ... 2018-10-01

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by BanditKing » Wed Oct 17, 2018 7:03 pm

My first question would be, can I move to another state without an income tax and then claim my prize, allowing me to not owe state income taxes on the winnings. A quick google search seems to indicate this would be possible (since the income wasn't earned until after relocation). If so, I'd rent a small apartment in one of those states, change my drivers license, voter registry, etc, and then get around to making my claim.

From there, put it all into a short-term bond indexes (for now) across multiple companies, living off the returns, while I figure out a larger plan. I'd make sure family college and mortgage issues were forever gone. I have two or three close friends who I also would free from debt and college worries.

If possible I'd claim anonymously. If not, possibly via an attorney.

I'd also disconnect my phone.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by Dottie57 » Wed Oct 17, 2018 7:13 pm

Bogleheads is what I would use. May a prime money market at first. Then:

1). Give my mom a big pot of money so she could move anywhere she would want.
2). Split money with my only brother. Couldn’t be rich without him also having money.
3). Look at what is left and give money to two good friends.
4). Set up money for charity donations.
5). Decide how I want to live with the extra money. New home? Vacation during Mn winters. No extra homes, but ability to rent where I want. Visit places I want to see. Bring friends along.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by J_Nyz » Wed Oct 17, 2018 7:18 pm

That’s 12.5 million not 1.2 million.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by wrongfunds » Wed Oct 17, 2018 7:33 pm

The remaining call it $245 million would be invested to yield a return of 5% a year, i.e. $1,225,000, which would yield roughly $1 million after tax, paying the annual expenses.
As the other reply said, it is $12.5M per year.

But the bigger question is how would you handle losing $25M if your portfolio drops by meager 10%? I don't think I have stomach to lose $25M. Do you?

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by CULater » Wed Oct 17, 2018 7:36 pm

For starters, how much security do you have for financial assets held at a brokerage or fund company? If you are a mega millionaire, I would think you would want to own real assets such as real estate, art, collectibles, etc. that you can insure for loss. There's probably a reason that rich folks own this kind of stuff.
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by Maya1234 » Wed Oct 17, 2018 7:44 pm

I'm an attorney with a commercial law firm and one of my partners regularly represents lottery winners. He sets up the trusts and estates and other things and then directs them to a handful of financial planners who he gets no referrals or incentives from because he feels that is importan and who do so on a straight fee. No money management.

But his first piece of advice to them is always the same: Winning a large amount of money in the lottery causes a lot of problems and headaches. Do not tell anyone who has not won a large amount of money in the lottery that winning the lottery causes a lot of problems and headaches.

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by cockersx3 » Wed Oct 17, 2018 8:27 pm

I don't play the lottery - but if I won that kind of money, I would actually just stick with the 3 fund portfolio like I do now. The only change would be to my AA - while my need for risk at that point is low, my capacity for risk is astronomically high. Would probably go up to like 90/10 and just live off dividends forever.

I also wouldn't tell a soul, other than the wife. Nothing good would happen from that kind of info becoming public. There are states that allow these prizes to be claimed anonymously, so if I were to purchase a ticket I would try to go to one of those states to get one.

For what it's worth, this subject triggered a great conversation with my daughter last night. She asked me why states even have a lottery, since they seem to routinely spend more than they take in - so how can they afford it? Once I explained how the lottery works and how much money the state takes in for this, she then asked me why they always talk about two different numbers for the lottery jackpot value (ie the value of the annuity vs the lump sum). This turned out to be a good time to discuss the concept of compound interest, and I used a spreadsheet to show her how much more you would likely make if you simply invested it on your own. She was fascinated with the idea that the money you earn in interest / dividends itself makes money as well. Was kinda surprised at the level of interest, actually.

And then we did the calculation for the odds of getting the winning number, and compared it to the odds of getting struck by lightning multiple times. Again, thought she would be bored to tears but she seemed interested.

And no - we're still not gonna waste our money on a ticket :-)

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by moghopper » Wed Oct 17, 2018 9:10 pm

Momus wrote:
Wed Oct 17, 2018 5:05 pm
Stocks crashed 50% dump the remaining bond to stocks 100% allocation and sleep well at night. You can literally live on 5-10% of that money even if stocks down 90%.

Wait... so $900Million. And let's say you really get a third after the lump sum payout and taxes.

And that $300M goes to $30M in a crash. (Your 90% down). And you can live on $1.5M - $3.0M a year?!?! Barbaric!

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Re: Where would you go for financial guidance if you win the Megamillions?

Post by nesdog » Wed Oct 17, 2018 10:05 pm

If I win $900 million, I'm gonna ask to meet with Mr. Bogle personally for advice!
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by LadyGeek » Wed Oct 17, 2018 10:08 pm

^^^ I can guess his answer. :)

From some perspectives, winning $1M or less would have the same impact. It's a large amount of money received at once. How do you manage it?

For the investing aspect, see the wiki: Managing a windfall

For the personal finance aspect, see: Financial planning

Professional guidance should be a Financial planner. It is important for investors to understand the difference between a financial planner and an Investment adviser.

As a reminder, discussions of gambling per se are off-topic.
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Re: Where would you go for financial guidance if you win the Megamillions?

Post by msk » Thu Oct 18, 2018 12:39 am

I would do exactly the same as with my current portfolio: 100% in worldwide ETFs by market weight, give away 3% p.a. and use 1 to 2% for splurging on myself. Frankly I would probably not have an appetite to spend 9 to 18 million $ annually on myself anyway (private jet? why? just use Netjets...), so occasionally I'll up the charitable contributions.

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