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Lottery winner followed careful spending plan

Topic closed. 59 replies. Last post 10 years ago by Road.

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Coastal Georgia
United States
Member #2653
October 30, 2003
1866 Posts
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Posted: February 28, 2007, 7:57 pm - IP Logged

This has nothing to do with the lottery, but I thought some people might find this interesting..at least people around here were surprised.  I just thought of it since we were talking about using old photos. (sorry, but my mind has its own segue system)

My birthday is in March so I received a notice that my driver's license needs to be renewed. In FL your license is replaced every 6 years. (I get a new registration sticker annually by ordering it online or by phone.)  My neighbor went up to the DMV and had to take an eye test and got her photo snapped.  I just took the notice I received in the mail and got online, using the web address on the card.  I typed the confirmation code provided and paid my fee online with a credit card.  2 weeks later I got a new style license with all sorts of holograms and it has my old photo from March 2001 in 2 places and my signature.  I never realized that, when they took my picture 6 years ago, they kept it on file in a database.  Maybe this isn't new, but I was surprised. So that's the way to get your license and registration if you don't want to fight traffic or stand in line.

More good news is that the picture is now 6 years old and in 6 more years (exp date on the new license is Mar 2013) I'll be 12 years older than I was when it was taken!!  LOL

Good little segue, JXP---The picture thing just shows that as we get older, we look the same, so they save the expense and time of taking a new one.

But I bet you have not aged at all in those 6 years !!!

I KNOW I haven't ...  LOL

 

                               

              

 

 

    twisted's avatar - underground
    New Jersey
    United States
    Member #2376
    September 25, 2003
    582 Posts
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    Posted: February 28, 2007, 9:24 pm - IP Logged

    I have a question.  What kind of a system was it where he had to play the same set of numbers for 3 years?  Is that a system at all?  Well it doesn't really matter at this point.  System or luck, he won it either way.

    But this is a great story.  The man is doing exactly what he wanted.  Who are we to judge and criticize what he has done with his money?  Someone will always criticize the way we handle THE WIN (if we ever won).  The guy is on his way to achieve the goal he set for himself and has helped others along the way.  His family is debt free.  His nephews' and nieces' don't have to worry about how they will pay for college.  His family members also get $12,000 a year.  Simply GREAT.  It would have been hard to be cool and composed after the win (he tried to remain anonymous) and think everything through about the future.  Congrats to him.


      United States
      Member #50202
      March 1, 2007
      14 Posts
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      Posted: March 1, 2007, 3:08 am - IP Logged

      hi all,  I Just registered to make a post and hope many more to come.  This story spoke to me because I'm also an avid cyclist.  A 11K bike is a bit much though, Mine costs 11h  and it's more than enough.  It seems the guy rides bikes for the fitness, not because of the environment.  He owns gyms and does a spinning class.  

       

      Number picks/predictions ads are amazing, i can't imagine anyone paying money for them.  there is a free site I refer to and it offers picks on the last six months draws, i've only seen it hit 4 of six on the regular lottery out of 18 different numbers.   Guess it depends on how the numbers fall.  

        Jill34786's avatar - Lottery-006.jpg
        Windermere, FL/Franklin, TN
        United States
        Member #50210
        March 1, 2007
        843 Posts
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        Posted: March 1, 2007, 9:07 am - IP Logged

      • >>$45 million: Safe, low-risk investments such as municipal bonds<<
      • >>$35 million: Aggressive investments like oil and gas and real estate<<
      • "My total net worth right now is at an unofficial value of $128 to $130 million. We've done very well for the first year and a half."

         

        First of all, I am happy that he won and has chosen a wise path to grow his assets but to reach $1 Billion net worth in 12 years, his assets have to grow at a rate of 24% (net after taxes) annually.

        I have a hard time believing his portfolio has grown to $128-$130 million in just a year and a half. Not to be too critical but I have broken down what his current asset allocation would have had to grow to achieve this number. 

        Low risk investments such as municipal bonds currently return 2-3% tax free, let's go ahead and just say 3% to make it simple.

        $45-million @ 3% for 1.5 years compounded annually=$47,050,000

        This means that his $35 million investment in gas, oil, real estate would have to have grown like this:

        Basis: $35 million, 230% return in 1.5 years= $80.5 million, factor in 35% fed tax($29.18 million) and 7.7% Idaho state tax($6.19 million) 

        $80.5 million minus $29.18 million/$6.19 million= $45,130,000 in gains

         

        $45,000,000 basis on muni bonds

        ($  2,050,000 return on bonds)

        $35,000,000 basis for aggressive investments

        ($45,130,000 net gains from investments)

         

        Net total from all investments = $127.18 million

        Add in all other assets and his stated net worth reaches $128-$130 million

         

        I'm sorry but a return of 15-20% for the past year and a half would have been a lot more believable than a whopping 230% return in the same time frame.

          YeeHaw's avatar - Lottery-041.jpg
          New Member
          California
          United States
          Member #43591
          July 22, 2006
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          Posted: March 1, 2007, 12:47 pm - IP Logged

                This whole thing stinks to me.  I remember when this guy won.  I even went back and read his Powerball winner's story to see if it changed.    He used " a series of numbers he's been playing for years".  I find it hard to believe neither he or his publicist mentioned his system???

          This reads like a press release for his lottery system.

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            North Brunswick NJ
            United States
            Member #39013
            May 8, 2006
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            Posted: March 1, 2007, 6:21 pm - IP Logged

            He got his money . Now we can get our.

            Over 267 millions in MEGA MILLION$$$$$$$$$$$$$$$$$$

            Appearing this friday on your favorite lottery station!!

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              Coastal Georgia
              United States
              Member #2653
              October 30, 2003
              1866 Posts
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              Posted: March 1, 2007, 6:40 pm - IP Logged

            • >>$45 million: Safe, low-risk investments such as municipal bonds<<
            • >>$35 million: Aggressive investments like oil and gas and real estate<<
            • "My total net worth right now is at an unofficial value of $128 to $130 million. We've done very well for the first year and a half."

               

              First of all, I am happy that he won and has chosen a wise path to grow his assets but to reach $1 Billion net worth in 12 years, his assets have to grow at a rate of 24% (net after taxes) annually.

              I have a hard time believing his portfolio has grown to $128-$130 million in just a year and a half. Not to be too critical but I have broken down what his current asset allocation would have had to grow to achieve this number. 

              Low risk investments such as municipal bonds currently return 2-3% tax free, let's go ahead and just say 3% to make it simple.

              $45-million @ 3% for 1.5 years compounded annually=$47,050,000

              This means that his $35 million investment in gas, oil, real estate would have to have grown like this:

              Basis: $35 million, 230% return in 1.5 years= $80.5 million, factor in 35% fed tax($29.18 million) and 7.7% Idaho state tax($6.19 million) 

              $80.5 million minus $29.18 million/$6.19 million= $45,130,000 in gains

               

              $45,000,000 basis on muni bonds

              ($  2,050,000 return on bonds)

              $35,000,000 basis for aggressive investments

              ($45,130,000 net gains from investments)

               

              Net total from all investments = $127.18 million

              Add in all other assets and his stated net worth reaches $128-$130 million

               

              I'm sorry but a return of 15-20% for the past year and a half would have been a lot more believable than a whopping 230% return in the same time frame.

              Welcome to the post, Jill34786 !!

               

              I knew someone would figure out this thing. Thanks for the insight...

              DD

               

                                             

                            

               

               

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                NY
                United States
                Member #23835
                October 16, 2005
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                Posted: March 1, 2007, 9:38 pm - IP Logged


                I'm with Jill. I think everything this guy says needs to be taken with more than just a grain of salt. Let's start with what he really started with. The cash value was about $125 million. The top brackets for federal and Idaho income tax were 35 and 7.8%, so unless he had some serious deductions almost all of that $125 million would have been taxed  at a total of 42.7%. The remaining 57.2% of $125 million would only be $71.5 million. He could have made charitable contributions that would lower the tax bill enormously, but that would still reduce his net. He may have gotten a check for $85 million after the mandatory withholdings, but I don't see how he'd net much over $72 million.

                Even if he did start with $85 million, Jill is about right about the return on his investments. Even allowing for not paying taxes until he cashes out, putting $45 million into a safe investment is unlikely to  yield more than $50 million, so he's claiming that  $35 million grew to about $80 million in a little better than a year and a half. Allowing 21 months, it would take an annual return of 60% to increase $35 million to $80 million. That's possible but fairly unlikely unless he was stupid enough and lucky enough to put it all into just 1 or 2 things that  happened to do really well. While there's a chance that he could continue to see overall returns  thathigh and have his billion dollars in 10 or 12 years, taking that kind of risk is also a great way to lose most of the money he has in aggressive investments.

                Some of his story sounds like he's a  level headed guy who  isn't likely to get into real trouble, but it also sounds to me like the guy has some sort of agenda he's working on and step one is to pile it pretty deep. 

                  Avatar

                  United States
                  Member #10720
                  January 23, 2005
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                  Posted: March 2, 2007, 12:51 am - IP Logged

                  The thing I need to figure out is what algorithm he used. He hinted that he took the 15 numbers that came out the most in the last 6 months, which is a very basic frequency count, and maybe he used one of those balanced wheeling systems, as even with his system you would face huge odds to match 5 out of 15 plus the bonus (? out of ?)...

                  I grabbed an old data file from 2005 and tossed in a special PB loader into my big program and tested for that drawing. It was 39-24-05-28-07 Powerball: 36. The only high numbers were the 05 and 07, the other 3 blend in with many others. The 05 & 07 also came out in a recent previous drawing at that time. I will endeavor to determine how the other numbers were predicted, including the Bonus Ball, and hopefully I can apply it for Saturday. I invite any of you to do the same and compare notes.

                  Finally.. his joy comes almost entirely from how much money he can accumulate. This is fine for him but if it were me I'd have picked Annuity and put 1/2 in safe investments each year and the other (up to) 1/2 to enjoy or to invest some of that more aggressively. it would be like hitting a 10M lottery every year for 26 years! I'd like to know also how he assembled a financial team, are these from a corporation or just his smart friends? (he could have asked the advice of Hillary Clinton, she turned $1000 into $100,000 or something like that!)

                  IF one really wanted to give someone a large amount w/o limit all they would need to do is leave it in your SUV in a briefcase and tell them where it's parked!

                    SirMetro's avatar - center
                    East of Atlanta
                    United States
                    Member #6191
                    August 11, 2004
                    1389 Posts
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                    Posted: March 2, 2007, 9:06 am - IP Logged

                  • >>$45 million: Safe, low-risk investments such as municipal bonds<<
                  • >>$35 million: Aggressive investments like oil and gas and real estate<<
                  • "My total net worth right now is at an unofficial value of $128 to $130 million. We've done very well for the first year and a half."

                     

                    First of all, I am happy that he won and has chosen a wise path to grow his assets but to reach $1 Billion net worth in 12 years, his assets have to grow at a rate of 24% (net after taxes) annually.

                    I have a hard time believing his portfolio has grown to $128-$130 million in just a year and a half. Not to be too critical but I have broken down what his current asset allocation would have had to grow to achieve this number. 

                    Low risk investments such as municipal bonds currently return 2-3% tax free, let's go ahead and just say 3% to make it simple.

                    $45-million @ 3% for 1.5 years compounded annually=$47,050,000

                    This means that his $35 million investment in gas, oil, real estate would have to have grown like this:

                    Basis: $35 million, 230% return in 1.5 years= $80.5 million, factor in 35% fed tax($29.18 million) and 7.7% Idaho state tax($6.19 million) 

                    $80.5 million minus $29.18 million/$6.19 million= $45,130,000 in gains

                     

                    $45,000,000 basis on muni bonds

                    ($  2,050,000 return on bonds)

                    $35,000,000 basis for aggressive investments

                    ($45,130,000 net gains from investments)

                     

                    Net total from all investments = $127.18 million

                    Add in all other assets and his stated net worth reaches $128-$130 million

                     

                    I'm sorry but a return of 15-20% for the past year and a half would have been a lot more believable than a whopping 230% return in the same time frame.

                    I think you overlooked one very powerful form of investing when considering "aggresive" style investments. This is commonly referred to as Hedge or Option trading.

                    Option trading (Hedge funds are a bit more complex, but use similiar concepts) are a powerful tool in one's investment technique to rapidly increase one's value. A simplistic example would be this, you purchase 100 shares of a stock for $10 per share. Then you sell a Call Option of $15 for $1 per share (profit of 10% spread over 3 months). Now, if the stock value does NOT reach $15 by the end of the option life, you get to repeat the process up to 4 times a year. Now, your pulling off a whopping 40% annual return (even higher if the stock price continues to increase during the year) from your original investment

                    $1,000 <-- Initial Value of 100 shares of stock at $10 Share

                    1st trade  $100 <-- Value of 1 Stock Option (100 shares at $1 per share)
                    2nd trade  $100 <-- Value of 1 Stock Option (100 shares at $1 per share)
                    3rd trade  $100 <-- Value of 1 Stock Option (100 shares at $1 per share)

                    Stock value increases to $15 or so a share

                    4th trade  $150 <-- Value of 1 Stock Option (100 shares at $1.50 per share)

                    Net Annual is $450 for a whopping return of 45%, not allowing for dividends or increased value of the stock

                    Now, the stocks he doesn't option trade with will reduce his annual overall return down to the low to mid 20% range. So, you see, his idealistic goal is very feasible. Also, if he has the right kind of trust account setup, the taxes are deferred.

                    And, just in case you were wondering, about 15 years ago (just prior to me making a lot of really stupid financial life decisions) I had transfered my 401k monies from a Company I was working for to a Stock IRA account. The monies initially transferred was $14,800 (and some change, dont recall the exact figure). Over the period of one year, I generated well over $17,000 from that money (and yes again, due to a lot of really stupid and probably inappropiate decisions, I have none of it now) utilizing the method I just illustrated above. Had I had more monies available at the time, I think I could have had even greater returns because I would have had a larger pool to work from.

                    All said and done, in the end, the right approach to investment and the proper management, one could easily double their value over a short period of time. And as I like to say, an open mind does lead to some interesting oppurtunities.

                    Sir Metro

                      CCHS13's avatar - chi jpeg.jpg
                      Illinois
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                      Member #46704
                      September 23, 2006
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                      Posted: March 2, 2007, 9:32 am - IP Logged

                      Nice story.  I have a question for anyone out there that can answer.

                      How in the hell can one pay all of those taxes at the time of winning

                      and still be taxed depending on how much money one chooses to give away

                      What is going on in this country?  You cant do what you want with your money

                      even after you have paid the "income tax" ?   

                      Men Lie Women Lie Numbers Dont

                        Jill34786's avatar - Lottery-006.jpg
                        Windermere, FL/Franklin, TN
                        United States
                        Member #50210
                        March 1, 2007
                        843 Posts
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                        Posted: March 2, 2007, 9:46 am - IP Logged

                        Thanks for the welcome DD.

                        I had occassionally peeked my head in on this forum in the past couple years but just recently decided to sign on.Smiley

                          Jill34786's avatar - Lottery-006.jpg
                          Windermere, FL/Franklin, TN
                          United States
                          Member #50210
                          March 1, 2007
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                          Posted: March 2, 2007, 10:22 am - IP Logged

                          Hi Metro,

                          I understand what you're implying as I also trade options using a variety of strategies. I allocate roughly 10% of my assets toward options as I feel it is inline with most seasoned traders.

                          Obviously, if someone were to start trading with something in the $25k range than that allocation may very well be 50% if not more.

                          I just can't see this MM winner investing most of his $35 million in options, perhaps $3 million but that would still be an incredibly large amount. Let's assume that even if he had a hedge position such as a front month strangle on Diamond trust (DIA) even purchasing 500 contracts of the Mar 123 call/121 put which were selling for $1.20/$1.05 respectively this morning, that itself would "only" be an investment of $112,500 before commissions.

                          25 position similar to that would yield a cost of roughly $3 million which would be fine if the open position is liquid but there are many thinly traded options that rarely exceed volumes of 1000 contracts or more.

                          While it is certainly attainable to achieve annual returns of 1000-2000% trading options, those are usually in the minority with total assets under $100k.

                          If Brad Duke's portfolio continues to grow at it's current rate (net 62% every 1.5 years) he would be worth in excess of $473 Billion by age 59!Eek

                           

                          Jill

                            justxploring's avatar - villiarna
                            Wandering Aimlessly
                            United States
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                            November 5, 2005
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                            Posted: March 2, 2007, 10:26 am - IP Logged

                            Nice story.  I have a question for anyone out there that can answer.

                            How in the hell can one pay all of those taxes at the time of winning

                            and still be taxed depending on how much money one chooses to give away

                            What is going on in this country?  You cant do what you want with your money

                            even after you have paid the "income tax" ?   

                            If you type "Gift Tax" in a search engine, you'll see lots of articles on this same subject.  In fact, if you use the Search feature on this board and type the words "gift" and "tax" you'll also find lots of interesting comments like yours.  The IRS site defines what can be considered a tax exempt gift.

                            I totally agree with you, not only about the gift tax but the inheritance tax.  Forget the lottery for a minute. Say you work hard your whole life and put away money to give your children and grandchildren a better life.  You die and leave $5 million and, even though you always paid your income and property taxes, your heirs have to pay taxes on what you had left when you died.  (which is why it really should be called a "death tax")  That's why it is so important for people of means to make sure their estate has been well managed.  Not only money is taxed, but any property or items of value.  Once you reach the maximum lifetime gift level, you can pay as much as 45% additional gift tax above & beyond your income tax.  (It was even more a few years ago, but has been decreasing.)

                            There are lots of ways to get around the $12,000 annual limit without cheating, however.  A savvy estate planner or attorney should be able to offer valuable advice. So to answer your question - No, you can't just do what you want with your money.

                              Jill34786's avatar - Lottery-006.jpg
                              Windermere, FL/Franklin, TN
                              United States
                              Member #50210
                              March 1, 2007
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                              Posted: March 2, 2007, 10:58 am - IP Logged

                              Just for kicks, I crunched the numbers in the event  Brad Duke were to allocate 100% toward aggressive investments which has already returned 230% in the past year and a half.

                              Within 9 years, he would be worth in excess of $167 Billion while reaching $25.714 Trillion by the age of 59.  That would certainly make both Bill Gates and Warren Buffett seem inferior.