Lottery winning question

[julia reyes]

So then how can they make this money grow safely but surely? Could they make 840 million dollars go past the billion dollar mark? Could it become like 1.3 billion dollars or more?

[julia reyes]

Can fidelity guarantee such results to keep their client happy and have their business for the foreseeable future?

[disneysteve]

So then how can they make this money grow safely but surely? Could they make 840 million dollars go past the billion dollar mark? Could it become like 1.3 billion dollars or more?

$840 million could absolutely grow over $1 billion relatively quickly. With an average annual return of 5% they’d hit $1 billion in just 4 years.

[disneysteve]

But if the fidelity client was generating like 18.5 million dollars by 2.5% rate yearly and ended up paying 37% in taxes, would it be fair to assume that if this was happening every year then each year they would be making like almost 11.5 million dollars in profits and if they managed the money in this account that after like 10 years they would have an additional 111 million dollars more in the fidelity account?

Yes. As long as they kept the money invested, it would continue to grow and compound over time.

[disneysteve]

Can fidelity guarantee such results to keep their client happy and have their business for the foreseeable future?

Fidelity is just the brokerage. Whether or not the return is guaranteed depends on the investment choices. Treasury bonds are guaranteed by the government, for example.

[bjl584]

Why do i ask? Because i know someone who won the lottery and it was like 840 million dollars after the lump sum and they would like to pay the least amount of taxes to the irs... thats why. They would like to deposit 100 million in a checking account that doesnt earn interest so they wont pay taxes on interest earned...

So you know the person from South Carolina who won the $1.5 Billion Mega Millions drawing in 2018?
That individual took the lump sum payment in that drawing.
It equaled $878 million.
That is the only lottery in history that comes close to matching your claim.

[disneysteve]

Source of funds matters to some extent because different income may be subject to different tax rates. For example, W2 income from a job will be taxed somewhat differently than income earned through a self-employment venture. Capital gains are taxed differently than regular income. Income from a Roth IRA isn't taxed at all when it's withdrawn. Interest on some government bonds is exempt from certain taxes. Municipal bonds issued by your home state are often exempt from state taxes.

You've posted multiple threads about this lottery winning, but you also mentioned Canada at one point. Is the winner in Canada or the US?

Also, how the prize itself is taxed is not something they can control. All they can control is how they invest the money that they end up with after the prize taxes are paid.

[scfr]

Perhaps donating the entire winnings would eliminate the need to worry about paying any taxes.

[disneysteve]

Perhaps donating the entire winnings would eliminate the need to worry about paying any taxes.

Well, the prize itself would still be taxed, but after that, you're correct.

[bjl584]

Source of funds matters to some extent because different income may be subject to different tax rates. For example, W2 income from a job will be taxed somewhat differently than income earned through a self-employment venture. Capital gains are taxed differently than regular income. Income from a Roth IRA isn't taxed at all when it's withdrawn. Interest on some government bonds is exempt from certain taxes. Municipal bonds issued by your home state are often exempt from state taxes.

You've posted multiple threads about this lottery winning, but you also mentioned Canada at one point. Is the winner in Canada or the US?

Also, how the prize itself is taxed is not something they can control. All they can control is how they invest the money that they end up with after the prize taxes are paid.

There was a lottery winner who to this day has remained anonymous from South Carolina that was the single winner of a $1.5 billion dollar jackpot in 2018.
They opted to take the lump sum payout. It equaled $878 million.
That is the only lottery jackpot in the history of the planet that comes close to matching the $840 million that OP is claiming.
It would be fascinating if OP knew this person, but this is probably spam.
I'd also question why the winner would be having someone else ask vague questions on an internet forum what to do with that much money 5 years after winning it.
Seems like a lawyer, a financial advisor, and a CPA would serve this person much better than having their friend ask about it here.

[disneysteve]

There was a lottery winner who to this day has remained anonymous from South Carolina that was the single winner of a $1.5 billion dollar jackpot in 2018.
They opted to take the lump sum payout. It equaled $878 million.
That is the only lottery jackpot in the history of the planet that comes close to matching the $840 million that OP is claiming.

There were $1.3 billion winners in January and last July. I don’t know if those were individual winners or what the lump sums were.

This May all be pre-spam but until then, it’s at least a mildly entertaining conversation.

[ua_guy]

Would the source of where the 840 million dollars came from determine, how much the individual in question would have to pay in taxes to the irs? How do high income earners in the u.s. differ from lottery winners as far as paying taxes?

This whole thing reeks of spam (prove otherwise!). But to answer the question, a lottery winner pays straight income tax, either on the lump sum payment, or the annuity payments they receive. That's different from a "high income" earner in the us. High income earners in the US also face income tax, but the source of that income (investments, or being given equity in the form of RSU's, grants, etc) changes how they are taxed. Someone given equity in a company may not be taxed until those options are sold, for example.

[julia reyes]

100% guaranteed bonds, how do those look like and how would those work?

[julia reyes]

An annual return of 5%, but on what kind of investment product? Would a high income earner be given the same advice as a lottery winner with the same amount of money?

[julia reyes]

What if they wanted to take some of the money out of fidelity? Would their money continue to grow?