As she often does, Julie bought a lottery ticket the other day with the hopes that we’ll win big. Of course, the chances of losing are very high, so I’m guessing we’re not the next millionaires.
But we starting to chat seriously about what we’d do if, suddenly, we a $20 million winning. First, of course, is the decision to take the lump sum, or take the yearly disbursement. At first, I was for the lump sum…then Julie took the point that having the yearly check would mean that if you blew through your cash in the first year, you could be more responsible the next year and not be one of those lottery winners who has to go back to finding a job because they spent all their money on stupid stuff. I agreed. Later, I thought if you had a good financial adviser, she or he would be able to help you structure that lump sum into something that would grow in value and give you enough money to live comfortably for the rest of you life. Nothing over the top, mind you. Just a tidy sum that would give one the freedom to go where you wanted, buy a nice house, maybe a couple of cars, and a few other toys.
After that comes the big question that may plague many lottery winners: “What’s next?” If I didn’t have to work for the rest of my life, what would I do with myself? Well, travelling around the world in slow way sounds really appealing (i.e., just plunking down in a country for a month and taking time to really explore the place).
The other realities are income taxes (almost 50% goes to that), insurance, and property taxes. Then there’s the whole gifting family money. $20 million sounds like a lot of money (and it is), but after factoring in all the money that goes to taxes, insurance, accountants and even lawyers (remember: you’re paying people to help you create a structured nest egg), there’s not a lot of money left to give to others. You might be able to give maybe $10,000 to 10 family members, but after that, you can’t do much else because you won’t have any more money for yourself.
See? It gets complicated, doesn’t it. I guess it’s kind of like what The Notorious B.I.G. once said: “Mo money, mo problems.”