quote:

Originally posted by Dave Tong:

quote:

Originally posted by mitchie:
Sorry to burst your bubble, but if you're a resident of the U.S. you'll only take home a measly half of the winnings after tax.

That's okay, I can slum it on 90 million.

Actually, you get about half of it BEFORE taxes, because if you take the cash option, you get the current value of the annuity which would have provided you with 192 mill over 26 years.

Then you still ahve to pay taxes on the half you get.

So, only 50 mill or so is a real style-crimper.

$50 million ain't what it used to be...

quote:

So, only 50 mill or so is a real style-crimper.

Gah, it's hardly worth getting out of bed.

Hell, that's less than £30 million. I don't get out of bed... ermmm... I just don't get out of bed.

quote:

Originally posted by mitchie:
Sorry to burst your bubble, but if you're a resident of the U.S. you'll only take home a measly half of the winnings after tax. If, however, you come from Canada you get the whole enchilada. With that I'd be buying up all the winners of the 2005 Canada Wine Awards and shipping them to Board-O

What did I ever do to you?

quote:

Originally posted by mitchie:
Sorry to burst your bubble, but if you're a resident of the U.S. you'll only take home a measly half of the winnings after tax. If, however, you come from Canada you get the whole enchilada.

What Mitchie said! In Canada we don't try to pay lotto winners out over 40 years, take a ton of the prize if they want payment up front or even take any tax. You win $56 million, you get $56 million. Therefore, I stand behind my decision to buy a bottle of 1900 or 1945 Bordeaux.

I'd go to Vegas and find a single zero roulette wheel. I'd put it all on zero for one spin.

If I won, I'd buy as many B.C. wineries as possible, plow them under and grow wheat.

Nothing is too good for my friend Board-O.

Thanks for the laugh, GA.

First I'd pay off my student loans....I'm not sure if I'd have any money left afterwards.

I'm just happy that so many people subsidize my tax bill by playing the Lottery...

quote:

Originally posted by highdesertwine:
I'm just happy that so many people subsidize my tax bill by playing the Lottery...

Even better is the fact that the majority of the people who are subsidizing your tax bill are in middle and lower income brackets.

Rothko: In all sincerity, I believe that the best way to collect taxes is to do it in a way that people will happily pay. Tax the vices that most people enjoy.

They get what they want, and the guv'mint's budget is balanced overnight.

Nah, we have a small but vocal minority that would rather tell people how to live their lives...

Sorry for the threadjack, everyone. Carry on.

voluntary regressive taxation is great, I'm all for it. Stupid is as stupid does.

Most of the wines I would really like to try are not a matter of money, it's a matter of finding them.

quote:

Originally posted by sydthesquid:

Actually, you get about half of it BEFORE taxes, because if you take the cash option, you get the current value of the annuity which would have provided you with 192 mill over 26 years.

Then you still ahve to pay taxes on the half you get.

So, only 50 mill or so is a real style-crimper.

I have yet to hear a reasonable explaination of the advantage of anyone under 60 years of age for taking the money upfront, rather than living off the annuity. I assume there must be some kind of tax reason, but it seems you'd still get more in the long run, and you wouldn't have to worry about going broke quickly.

Now, long-lost relatives showing up at your door? That's another story... My M.I.L. is quite well off, and though I've never asked her for a dime, I am in the minority. It really urks my wife how the cousins crawl out of the woodwork to beg "loans" and pitch "business opportunities". She is a nice person, and sometimes she just can't say NO.

quote:

Originally posted by mneeley490:
I have yet to hear a reasonable explaination of the advantage of anyone under 60 years of age for taking the money upfront, rather than living off the annuity. I assume there must be some kind of tax reason, but it seems you'd still get more in the long run, and you wouldn't have to worry about going broke quickly.

If you take the lump sum payout, you get roughly half. Now, invest that in something that has at least a 3% return, and in 26 years you'll have more than if you took the annuity.

For example, assume the lotto is $100. You take the lump sum and get $50. After year 1 invested at 3%, that $50 is $51.50; after year two, that $51.50 is $53.05, etc. So, after 26 years you will have actually had $107.83 instead of $100. Hence, never take the annuity.

I think I will buy $2 of tickets, to double my chances of winning from almost none to almost none.
Reminds me of the client who hit her head in a car accident and had double vision. I was interviewing her to find out what medical care she had gotten. She said, "I am seeing an eye doctor at Johns Hopkins for my double vision." I said, "You mean, you are seeing two doctors."

Take the lump sum.

If I won, my liver would fail in 10 years anyway from drinking so much wine every day

Here's a quote on a winner from the Florida lottery:

"The two won the "$1,000,000 Cash Spectacular" top prize. They elected Friday for the lump sum of $681,750, rather than $50,000 annually over a 20-year period."

If you take the lump sum, you'd have about 518,000 after taxes.

According to an online investment calculator I found, if you invest that $518,000 and get 8% a year, you'd have over $2.4 million after 20 years (not taking into account the taxes paid on the growth).

I would go with a Babe Ruth and Lou Gerhig rookie card. I've always wanted one.


As for wine; I've never had a well aged 1st growth, so I would do some research and buy the best that is available. This way I can see what all the fuss is about.

I would slip in a few 98 Grange in there too.

quote:

Originally posted by mwagner7700:
[QUOTE] If you take the lump sum payout, you get roughly half. Now, invest that in something that has at least a 3% return, and in 26 years you'll have more than if you took the annuity.

For example, assume the lotto is $100. You take the lump sum and get $50. After year 1 invested at 3%, that $50 is $51.50; after year two, that $51.50 is $53.05, etc. So, after 26 years you will have actually had $107.83 instead of $100. Hence, never take the annuity.

Ok, but that is assuming the winner invests the entire amount, and then doesn't touch it. Realistically, WHO would (or could) delay that kind of gratification for 26 years?

Well, you'd just have to invest it for the first year. After that year, you could just live off the interest. Obviously, it requires extreme amounts of self-discipline. However, if you plan it right, you could just always live off the interest of the previous year, and never touch the initial winnings. You're right... you wouldn't have as much money in your pocket after every year as with the annuity, but after 26 years you still have the initial winnings earning interest. Now, if you took the annuity, and only spent a little and invested the rest every year, that's another animal.

I should add that my example was at 3% interest. If you got 10% interest, you'd get $5 after year one... compare to $3.85 ($100/26 years) with the annuity.

quote:

Originally posted by Rothko:
If you take the lump sum, you'd have about 518,000 after taxes.

According to an online investment calculator I found, if you invest that $518,000 and get 8% a year, you'd have over $2.4 million after 20 years (not taking into account the taxes paid on the growth).

If you were to invest in mutual funds with a moderately conservative capital growth portfolio, you could expect an 11-12% average annual return. That's in the neighborhood of 57-62k/year (pre-capital gains taxes). That alone would be a reasonably comfortable living (depending on our relative incomes), especially if you kept some sort of day job.

It would certainly be enough to significantly augment my wine habit!

I don't know... 11-12% annual return seems pretty aggressive for a conservative growth portfolio.

quote:

Originally posted by Parallele XLV:

That's in the neighborhood of 57-62k/year (pre-capital gains taxes). That alone would be a reasonably comfortable living (depending on our relative incomes), especially if you kept some sort of day job.

It would certainly be enough to significantly augment my wine habit!

Hmmmmmm, now that's an idea! Although with that much to spend on wine, the quality of my work may eventually suffer.