Would winning a lottery change your life?

[bluewaves]

For many people, sudden money can cause disaster.

"Joan Ginther of Bishop, Texas, collected $10 million with the Texas Lottery's $140 million Extreme Payout scratch-off ticket, the biggest prize available. It was the fourth time she's won a lottery. Her total lottery earnings were $26 Million." What will her finances look like in 10 years?

"Winning the lottery isn't always what it's cracked up to be," says Evelyn Adams, who won the New Jersey lottery not just once, but twice (1985, 1986), to the tune of $5.4 million. Today the money is all gone and Adams lives in a trailer.

What would you do if you won a lottery?

[Broken Arrow]

Would winning a lottery change your life?

Yes.

What would you do if you won a lottery?

Sit on the ticket for a little while and seek professional financial help.

[disneysteve]

Originally Posted by bluewaves

What would you do if you won a lottery?

Not blow it all and end up living in a trailer.

I'd probably put it all in municipal bonds and live nicely off of the income that would generate.

[jIM_Ohio]

Originally Posted by bluewaves

For many people, sudden money can cause disaster.

"Joan Ginther of Bishop, Texas, collected $10 million with the Texas Lottery's $140 million Extreme Payout scratch-off ticket, the biggest prize available. It was the fourth time she's won a lottery. Her total lottery earnings were $26 Million." What will her finances look like in 10 years?

"Winning the lottery isn't always what it's cracked up to be," says Evelyn Adams, who won the New Jersey lottery not just once, but twice (1985, 1986), to the tune of $5.4 million. Today the money is all gone and Adams lives in a trailer.

What would you do if you won a lottery?

If I won the lottery 3 things happen

1) take payment in lump sum (I know its less, but I might die in 10 years, so I need to take care of my family now)
2) pay off all debts, without thinking twice (mortgage is only debt we have)
3) Invest such that a reasonable amount is spent annually. Our current expenses are about 60-70k per year. Increasing this by 25% would be more than enough to boost our lifestyle.

the 3 don'ts

1) don't hire people (don't create a payroll), they cost money
2) don't pay lots of people (for services rendered)- they will take your money
3) don't make new friends- if they weren't friends before you made money, they likely want your money

[disneysteve]

I agree with Jim. Lump sum, for sure. Pay off the mortgage (also our only debt). Invest to elevate our lifestyle but not to an extreme. We could both use newer cars (mine is 13, wife's is 11 years old). We enjoy traveling and would want to do it more often and to some more exotic places and in nicer accommodations. Have some work done on our house. Otherwise, keep things pretty much the same except for no longer needing to work.

[Broken Arrow]

We've had lots of these hypothetical discussions in the past, and it never seems to dull through time.

But, I think the conclusion is here is that It Depends.

For example, there's the never-ending debate of whether one should accept lump sum or annuity. The Straight Dope has an interesting take on this issue, but it also depends on which lottery and what options, if any, is offered.

It also depends on the amount of the winning. It's one thing to win $500k. It's another to win $150 million.

Finally, it also depends on our current financial picture and habits. I'm sure someone who has little financial knowledge and worse habits should probably handle the windfall differently than someone who is savvy and in good financial shape.

There may be more factors, but the point is, if we really want to talk about this, I think we need to start from the very beginning and ask more details surrounding the balance, the taxes involved, and the details surrounding the annuities before one can say for sure.

Barring the details though, I'm not disagree with you guys. I just think how you guys handle it will be different than how others should handle it. That's also why I gave the simplistic response of sitting on it and getting help. There's no reason to rush it.

[Joan.of.the.Arch]

Dull answer: It would not be possible for me to win a lottery as I do not buy tickets.

[Broken Arrow]

Originally Posted by Joan.of.the.Arch

Dull answer: It would not be possible for me to win a lottery as I do not buy tickets.

Me too.

[bluewaves]

"Suzanne Mullins won $4.2 million in the Virginia lottery in 1993. Now she's deeply in debt to a company that lent her money using the winnings as collateral."

"One Southeastern family won $4.2 million in the early '90s. They bought a huge house and succumbed to repeated family requests for help in paying off debts."

I think that if you don't have a financial strategy in place before you won the money, it would be easy to lose it as in these two cases.

[kork13]

Lottery, inheritance, any large windfall... I'm not so naive as to say it wouldn't change my life -- it would, no question about it. I think I would take some of it for fun (enough for a nice, fun car, some travel, etc.), and right now, I'd probably help to pay for my 2 brothers' college. Otherwise, I really think I would find myself investing it to provide an additional income for myself to elevate my standard of living somewhat. Thankfully, I think I'm smart/responsible enough to not blow it all and ruin myself because of it.

[elessar78]

it would change my life

1. Set aside 10% to do charitable work with. I'm not just handing it over to someone, even my church. I'll only give away the interest earned on that principal.
2. If I have any debts at that point, pay them off
3. Like DS, I'll invest it in something and live off the interest.
4. I like to think that I'll keep my current job at the time.

I think the "problem" with people who play the lottery regularly, is that they play but don't have a plan when the improbably happens. I entered a drawing for NFL season tickets last week, and I only did it because if I win I plan on selling the tickets afterward.

[maat55]

We would move up a little in house. Set aside an blow account and invest the rest wisely to retire.

[ea1776]

1. Pay off all debts.
2. Give 20% to various charities.
3. Temporarily quit jobs to go back to school for PHD, then become a teacher.
4. Travel
5. Start 529 college plans for all young people in my family.
6. More charitable stuff probably.

[MonkeyMama]

My lifestyle wouldn't change much, but my life, yes.

Though I have to agree with Joan - I have never spent a cent on the lottery.

That said. I only think winning the lottery would be an overly positive thing if I could keep it 100% private. I wouldn't tell a SOUL. You always hear the stories of the people who win and manage the money well, but lose all their friends and relatives who can't understand that it's not infinite (just as many winners don't understand either). It just changes relationships, not for the better. Though I would do mostly charity - hopefully positive.

[disneysteve]

Originally Posted by MonkeyMama

My lifestyle wouldn't change much, but my life, yes.

I only think winning the lottery would be an overly positive thing if I could keep it 100% private.

I agree about the life vs. lifestyle comment. That's a good way to put it. We would live similarly to the way we live now. Maybe dine out a little more. Definitely travel a little more. But I wouldn't go buy some big mansion, expensive car, flashy jewelry or anything like that.

It would be great if lottery winners could remain anonymous. I think that would solve a lot of problems that befall the winners. Unfortunately, when people know that you have millions, things change.

[sm808]

An interesting corollary to this question - how much of a "windfall" would it take for you to quit your job tomorrow? Some people say that they would keep working even if they won, for example, $100M lottery, but I feel like most people (who didn't squander the $) would invest it and try to live off of the income.

[jpg7n16]

Originally Posted by bluewaves

What would you do if you won a lottery?

Tithe
Pay off family's debts (the folks CCs and house, sister's school).
Then invest about 1-2M in a good municipal bond fund (tax free income of roughly 50k-100k).
Then I'd start investing with the rest.
Give 13k a year to each of my folks, bro and sis.

Oh and not tell anyone except my close close family.

Then I'd start living on my muni bond income, but I'd still look for a job where I could help people with their finances. Make a budget and all that. I wouldn't really splurge or anything. My main thing I like to buy is stocks so, lucky me.

If I won $100M, I'd literally feel as though I just won about $90M more to add to my portfolio however I see fit.

Originally Posted by sm808

An interesting corollary to this question - how much of a "windfall" would it take for you to quit your job tomorrow? Some people say that they would keep working even if they won, for example, $100M lottery, but I feel like most people (who didn't squander the $) would invest it and try to live off of the income.

Quit my current job? or quit working altogether?

I don't think there is any amount where I'd quit working altogether.

[disneysteve]

Originally Posted by sm808

An interesting corollary to this question - how much of a "windfall" would it take for you to quit your job tomorrow?

I used to be of the opinion that if I won a large enough amount to make it possible, I would quit. Now, I'm not entirely sure. I think I would take advantage of the financial freedom to remold my job into something I would want to keep doing. I'm a physician and pretty over-worked. I could see myself reducing my office hours to 4 days/week and reducing my scheduling to 3 patients per hour, allowing me to spend more time with each patient. I would also eliminate certain types of patients from my practice and focus on the types of patients that I really enjoy treating.

Of course, I'd also take more vacation time.

How much would it take to do this? Since I'd still be working, I'd say $2 million ought to cover it.

[bjl584]

I really don't know. I think that I would park all of the money in a cash account or CD for about a year and get all my ducks in a row before i took further action.

[Ima saver]

It wouldn't change my lifestyle at all. I would invest most of the money but a large chunk which I would give to our local no kill animal shelter.