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For some lottery winners jackpot is a 'nightmare'

Topic closed. 53 replies. Last post 12 years ago by Maverick.

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Posted: November 19, 2004, 4:31 pm - IP Logged

The reason they give for not giving anonymity is the public would suspect an inside job or scam in winning, which is reasonable especially in a state where gangster Whitey Bulger "won" the lottery. But I don't see why they have to announce the name the second the person claims the prize, except for their own selfish publicity purposes. Why not give 2 years before making the name public, and then only giving the name and location where the ticket was bought, with no current address or other information given. This would give people a chance to get used to the money and move, get unlisted and have everything set up. And it would still let the public know a real person won it.

Quote: Originally posted by golotto on November 19, 2004







If more states would allow the option of total anonymity for jackpot recipients, it would give them the cushion of protection they need following the life-altering dvent. Anonymity would provide one with the time to carefully make decisions and seek prudent advice in many areas including long term finances.

Since this basic privacy option is not given by most states, I agree that one who happens to match the numbers must make every effort to protect themselves with the first and most important step being an unpublished phone number. Also, immediately following ticket validation, consider taking an extended road trip for a week or two. I like the idea posted earlier of going exclusively with a new cell phone account and completely eliminating your home phone access except for internet use. This will allow you to contact the people you choose for financial advice. For the time being, give the new cell number to only those who must have it.




    8Ball's avatar - 8ball
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    Monroe/Michigan
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    Posted: November 20, 2004, 9:11 am - IP Logged

     I agree with everything I've read but what should be addressed is when most people purchase lotto tickets some use monies they cannot spare in hopes of "winning the big one" and become addicted to the game and lose everything even BEFORE they win! These are some of the same people who have won the lottery! I think if you purchase tickets wisely that you can manage the money wisely and have the foresight to hire the right people to insure your future.You are dicussing cases where only the ones that fail are addressed,What about the rest? Not everyone who has won has done so terrible and most people are not so foolish.It's all about gambling addiction and it's aftermath.

      Maverick's avatar - yinyang
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      Posted: November 20, 2004, 3:31 pm - IP Logged

      From what I seen in NY I notice the winners are not in a pic holding that giant check until say about 6 months after the ticket was brought in. I look at www.nylottery.org.

        DoctorEw220's avatar - alien helmet.jpg
        Yinzer Country, PA
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        Posted: November 20, 2004, 3:41 pm - IP Logged

        i've noticed that as well, with a few exceptions (phin suy- won $128 million mega millions jackpot). a lot of them choose to wait a while before claiming the ticket. also, new york has had 2 mega millions jackpot-winning tickets that have gone unclaimed. some people take too long, or lose the ticket.

        I've redone my website.  Go to www.dr-ew.com.  I kept a lot of the old stuff, and I've added some new stuff.  Look for more new stuff in the coming weeks.

          Maverick's avatar - yinyang
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          Posted: November 20, 2004, 3:47 pm - IP Logged
          Quote: Originally posted by DoctorEw220 on November 20, 2004


          new york has had 2 mega millions jackpot-winning tickets that have gone unclaimed. some people take too long, or lose the ticket.



          Now that is a topic even better than lottery rigging & losing your winning millions. If thats not from merely losing the ticket, then i say those people are simply fools. But one should not even get close to losing a ticket as it is... NEVER NEVER NEVER.

          You know i wonder if maybe they figured they'd cash it in when they REALLY needed it, & then after the deadline lo and behold, they find out theres a deadline lol... omg!

            four4me's avatar - gate1
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            Posted: November 20, 2004, 3:52 pm - IP Logged

            I don't know but when you win a lot of money on that 1 dollar purchase. It's like common since goes out the door. The high you get from winning all that money can drive people to do the strangest things. I imagine many people get very buy happy. They start buying everything they never could afford. Many people might think of buying things as an investment. Thinking that if for some reason they needed money they could sell off the stuff they bought. If you never invested in a portfolio before you won you probably won't after you won. Surprisingly a lot of people don't trust banks or the people who might handle their money. And since they won a lot of money for only the one buck the say what the heck it's only money. And end up blowing it all.

              Maverick's avatar - yinyang
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              Posted: November 20, 2004, 3:56 pm - IP Logged

              Thats true. I guess some people just dont think of protecting themselves & their winnings. Well i hope we at least learn from their loss.

              I'll be a cheap-ass now, & a cheap-ass when i win a jackpot lol!

                four4me's avatar - gate1
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                Posted: November 20, 2004, 4:17 pm - IP Logged
                I'm fairly sure if I won around 10 million clear after taxes. I would spend about 2 million right of the top. New house or houses. One on the east coast one on the west coast New furnishings for those houses. All new clothes and necessary belongings. Upgrade to new transportation. All this would come real close to 2 million. Insurance for everything including the wife and kids. Yea 2 million easily spent. Set up a real good portfolio invest in stocks and bonds. A trust for the wife and kids. Tie up loose ends. Then an all expense long term paid vacation.
                  DoctorEw220's avatar - alien helmet.jpg
                  Yinzer Country, PA
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                  Posted: November 20, 2004, 4:39 pm - IP Logged

                  if you won $10 million,you'd spend $2 million right off the top paying the taxes.

                  I've redone my website.  Go to www.dr-ew.com.  I kept a lot of the old stuff, and I've added some new stuff.  Look for more new stuff in the coming weeks.

                    four4me's avatar - gate1
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                    Posted: November 20, 2004, 5:16 pm - IP Logged

                    I won around 10 million clear after taxes.  open eyes first please

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                      Columbia City, Indiana
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                      Posted: November 20, 2004, 8:27 pm - IP Logged

                      Four4me:

                      I hope you will accept this in the spirit in which it's intended, and the following should not be construed as a personal attack.

                      The scenario you've outlined for yourself is doomed to fail from the outset. Let me explain what I mean:

                      You've won an 18 or 20 million dollar jackpot (depending on the state's tax structure), and now you have a cashier's check for 10 million and change. You've already planned to spend $2 million on houses, cars, clothes and insurance for your family, so now your win has been essentially reduced to $8 million in cash.

                      Let's say, by some miracle, you don't have any cost overruns in constructing your new homes, and that no family member suffers any catastrophic illness, so you now invest the remaining $8 million in tax-free municipal or government bonds, which currently yield about 1.8% (if any investment counselors or brokers are reading this, please correct me if this is not the current yield). This will pay you roughly $144,000.00 per year, every year that you leave the principal (the original $8M) intact.

                      After spending two million dollars in the first year, will you have enough left over to live for one year while your investments mature, without having to dip into the principal again? Will you be able to pay your living expenses, insurance premiums and property taxes and still have enough left over to maintain your new lifestyle on $144,000.00 a year for the rest of your life? 

                      This is the point I was trying to make in my last lengthy post:

                      Don't spend - invest.

                      Let's look at the same scenario, but with one minor change. Let's say everything happens as outlined above, except that you DON"T spend $2M. Instead, you decide that, since you've never had that much money before, you're just going to sit on it for a year and then decide what to do. So, you put all ten million into the same municipal bonds and, at the end of the 12-month period, you now have $10,180,000.00. That extra $2M just earned you another $36,000.00, tax-free, which is more than many people make slaving away at their jobs for a year. See? The more you spend, the less you make in interest; when you spend a million, you're actually spending (one million) + (eighteen thousand) x (the number of years you have remaining in your lifetime). If you live another forty years, that $2M you spent could have earned you another $1.44M in capital gains. Now, you realize that you can take the $180k, buy a pretty decent house AND a new car, and you still have all of your $10M, so you can do it again next year. And the year after, and the year after that...

                      Provided that you don't spend a dime of the principal, you'll always have that money. I think that's what happened to these "stupid" people (I used the quotes because that word seems to come up a lot in the responses to this thread); they decided to spend "just a little," and then again, "it only costs $25k," and so on, until it was all gone. Personally, I would stop short of any name-calling, because one of the names in that article could easily have been mine. Actually, I'm thankful that I didn't win a jackpot when I was 25 or 30 years old, because I would probably have been in the same boat as these people. Back then, I didn't have the experience or discipline, nor the understanding of finance and global economics I enjoy today. I still have a great deal to learn, but writing government manuals, booklets, reports, pamphlets and brochures for various agencies gives me the opportunity to study figures and stats that ordinarily would never occur to me.

                      Ironically, it was while preparing an outline for a pamphlet about problem gambling that I stumbled onto this:

                      In order to attain a minimum personal income of one million dollars per year, after taxes, you'll need to win a jackpot of roughly $80M. Here's how it breaks down:

                      If you choose the cash option, you'll receive approximately 55% of the advertised jackpot, which comes to $44,000,000.00. Regardless of your state's withholding (Indiana withholds 28%), you'll end up paying 30% to 32% in federal taxes on your original win. Incidentally, the reason most states require you to claim your prize within 180 days is because, that way, you don't qualify for the lower, (federal) long-term capital gains rate. However, during the second and subsequent years, you will qualify for the lower rate, which, if I'm not mistaken, is now capped at 15%. Okay, back to our story. We'll use the lower tax rate of 30%, so the government will take  $13,200,000.00, leaving you $30,800,000.00 (Depending on whether you see the glass as half-full or half-empty, you've either been ganked out of fifty million dollars, or you've just won thirty million). Now, you either earmark the $800k for living expenses, or leave it with the principal and invest it all in boring, dividend-paying stocks. Blue-chips usually pay a good dividend, and you're looking for one that yields at least four or five percent. If you keep the $800k and invest the remaining $30M at 4%, you would receive $1,200,000.00 per year before taxes. You can do the math for your state taxes, but the federal long-term capital gains tax, at 15%, would leave a net income of $1,020,000.00, or one million, twenty-thousand dollars per year, and you still have your original thirty million, so you're now making a million a year.

                      It's fun to dream, and who among this motley group hasn't fantasized about what it must be like to pay cash for a new house and car? Sometimes dreams come true, but the problem is that a reality check soon follows. Speaking for myself, I have only empathy for the people who lacked the skills to hold onto their new-found wealth. Their financial misfortunes cannot be construed as a measure of their intelligence since, without sound planning, the same could easily happen to any of us. To be perfectly honest, I don't know that it couldn't happen to me; I've never won that much money, so how can I possibly know how it would affect me, or my judgment? 

                      "There but for the grace of God go I..." John Bradford wrote these words, sometime around 1510, on seeing a group of prisoners being led away to their executions. He was a 16th century holy man, but he was saying that any one of those men could have been him, had his own life taken a different course. He compared himself to criminals, realizing all the while that his life, or anyone's life, might easily have come to the same end as the condemned, had circumstances been just a little different. Back then, most men of the cloth believed they were chosen by God Himself to preside over their congregations; it was a calling, not a conscious choice, to enter the church.

                      We can all take a lesson here. Rather than saying, "Boy, those people really define stupidity," let's all have the good sense to realize that we have no clue what it's like to have that much responsibility. We won't know until and unless we win a jackpot. If it was only one person who lost his millions, I would gleefully join you in calling him Stupid. But the fact that there were several, indeed many, people who suffered the same fate, I consider the story a warning to be heeded. It's easy to speculate on what we think we would do while we're still dreaming of instant wealth, but then, we don't have a check in our hands.

                      That makes a big difference.       

                           

                       

                       

                      Come, Pinky; we must prepare for tomorrow night...

                      Jim

                        Maverick's avatar - yinyang
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                        Posted: November 20, 2004, 8:40 pm - IP Logged

                        jim695, can i hire you when i win a huge jackpot?

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                          Columbia City, Indiana
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                          Posted: November 20, 2004, 8:49 pm - IP Logged

                          Maverick:

                          If you need some technical data written up and organized in a dry, boring but concise manner, then sure, I'll work for you. If, on the other hand, you're looking for someone to clean your pool or to give you financial advice, then I'll have to pass, since I'm not qualified for either position.

                          Come, Pinky; we must prepare for tomorrow night...

                          Jim

                            Maverick's avatar - yinyang
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                            Posted: November 20, 2004, 8:54 pm - IP Logged

                            lol@clean the pool.. nah, a technical data write-up would be niceThanx

                              four4me's avatar - gate1
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                              Posted: November 20, 2004, 8:54 pm - IP Logged

                              JIm: I agree with this

                              Don't spend - invest.

                              Let's look at the same scenario,

                              Although I haven't broken it down as well as you have. I thought about this scenario on more than one occasion. And since I'm approaching my mid fifties. I opted in my mind to go the route I stated above. If it were any less than 10 million. I would possibly take 250,000 to 500,000 and make some living changes. Then invest the rest, while it matures and live off the principal. Not to difficult a task for me since I live on a fixed income anyway. If I were to win big I would definitely sit down with some money pros and go over every possible money making possibility. Including investing in some small franchise that would bring in some extra capital to work with.

                              Having seen and known some of these blankety blank lottery winners in my area I kinda got some ideas not to go the route they did. Some are back to work a few are on skid row. Having spent till it was all gone.

                              Some are doing ok others continued working for a few years while there investments grows. Waiting for the ultimate vacation of a lifetime while enjoying an early retirement. It helps to know the value of money and what it can do for you if invested correctly.

                              Thanks for your reply you gave everyone something to think about including myself