Fairly often the people I work with throw in on a lottery pool, usually I am the only hold out. It’s not that I can’t spare the $5 or $10 to enter that keeps me from doing it, it is more my aversion to the lottery, to monopolies, to partnerships, and to found money. With that being said it is still kind of fun to think about what we would do if we won a large lottery jackpot. What I find even more fascinating that what I personally would do with the money is seeing what other people would do with theirs. It is amazing how creative people can be when thinking about what they would do if they won.
My Disliking of Lotteries:
The first problem I have with lotteries is math. I certainly am not implying that the people who play the lottery are bad at math, I think most just don’t care because as I mentioned above, it is fun to think about what it would be like to hit it big, and $5 is a small price to pay. When it comes down to it though, the odds are ridiculous. The odds of winning Tonight’s mega millions lottery jackpot with a $1 ticket are 1 in 258.9 million. As Mr. Burns would say “hmmmm… $1 for eternal happiness…….I think I’ll be happier with the dollar.”
I’m not a fan of monopolies, especially monopolies ran by the State. If I were to start my own lottery, sell tickets, and hand out a multi-million dollar jackpot, I would be hauled off to jail. I don’t think that is right, and therefore I have no desire to hand over my money to the State.
As much as I don’t like monopolies, I REALLY don’t like partnerships. I think partnerships are a quick way to lose your friends. There are several stories about lottery pools turning bad when they hit it big, either from there being a thief in the group, someone who feels they deserve more or contributed more (and maybe they did), and outsiders who simply feel jealous towards the group…I don’t like partnerships for buying houses, for going into business, or for aiming for a jackpot.
My final criticism with the lottery is that it falls into the category of “found money”. People by nature are not well equipped to handle found money and the vast majority who do run into it do not treat it with anywhere near the respect they would had they earned the money. Found money has a way of leaving those it found very quickly, and often with destroyed friendships and family relations in its wake.
So Now What Would I Do With A $100 Million jackpot?
Well… $100 million isn’t really $100 million. If you take the lump sum payment (which I would) it is $64.2 Million. With about half due to taxes, I would clear $32 million, which is still more money than I could see spending in a lifetime.
What I wouldn’t do:
First of all I wouldn’t tell anyone. The second it becomes public knowledge, you get “friends” and long lost cousins coming out of the woodwork.
I wouldn’t quit my job either. I might cut back on travelling for work, but I would still work.
I would not give my kids a free ride. Although this is enough money to ensure my children and grandchildren would never have to work I would hate for my kids to grow up with an entitlement mentality. I would provide funds for their education but they still need to earn a living.
I wouldn’t move to a bigger house. I have all I need right here and have no desire to live in a mansion. Most of those places come with crazy high property taxes and heat bills too. I love the house we have and the land it sits on.
What I would do:
I think this tops the list for most people, but I would pay off my house, and my mother in law and sister in law’s houses. I would then buy a small adjoining parcel of land to my property. All of these items combined wouldn’t crack $200,000. This move reduces risk and monthly cash flow requirements.
I would earmark $50,000 each for my boys and my nephews for college. This may not cover the whole thing, but it would take out a huge chunk. Total cost $300,000. Since most of them have several years before college investing the money would most likely result in more than they will need.
Perhaps Mrs. C. would quit her job. With a yearly cost to cash flow of between $10,000 and $20,000 I would peg the day 1 dollar cost at $150,000.
I would upgrade Mrs. C.’s vehicle to a newer van. $15,000. She currently has a 2004 and I think we could get her into a 2010 or 2011 without attracting too much attention. I would then wait a year or two and upgrade my car to a Tundra, I would get one about 10 years old, which would set me back around $10,000.
I would check off some home improvement items: Fencing, paved driveway, bathroom remodel, and new cabinets…$50,000. Paving the driveway would be the most expensive part of this whole project.
I would keep 3 years of expenses in cash, $100,000. I know this isn’t spending money, but it would allow us to not sell invested assets when the market is down.
I think that covers everything I really want to do and I still haven’t hit a million! perhaps it’s lack of imagination. I would keep around $3 million invested, which even at a 4% withdrawal rate would provide us with $120,000 of income per year (which is way more than we would spend in a year). The remaining $28 million I would most likely give away towards a few charitable causes:
- The eradication of Polio and Guinea worm disease to be a small part of a great achievement in mankind’s history.
- Our Pediatrician’s office: Our local pediatrician does an amazing amount of work to improve our community and has helped my family through so much. He serves mostly low income families and runs a bare bones operation.
- Lory’s Place: Lory’s place is a group forum for people who have lost loved ones. Mrs. C. started attending last year when her sister passed away.
So here’s the big question: What would YOU do with $32 million in cash? Would you buy a mansion and a yacht? Would you quit your job? How would your life change?