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POWERBALL CREATES WORLD'S FIRST BILLION-DOLLAR JACKPOT

Topic closed. 567 replies. Last post 11 months ago by AbsolutelyFun.

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Posted: January 11, 2016, 7:53 pm - IP Logged

There are three episodes listed for Saturday morning. Love that show. I particularly like the story of the youngest jackpot winner in Florida's history. After the deposit was made to his account, he said he spent the whole afternoon calling the bank's automated system, listening to his balance, hanging up, repeating. I could see myself doing that.

By the way, with ~6,900 banks in the U.S., and assuming we go back to $100,000 FDIC insurance, we're getting really close to not having enough banks to put the cash payout in. Something to think about.

That's a darn good point.  A darn good one.

    ecnirP's avatar - prince symbol_black-mini.jpg
    Farmington Hills
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    Posted: January 11, 2016, 8:00 pm - IP Logged

    Don't know if you got a reply but only the cash option locks you in to what the taxes are now. Annuities are subject to any changes in tax laws. You can expect that taxes will continue on their upward trajectory on federal and state levels. Actually, there doesn't even have to be a federal increase for you to pay more. Doesn't even have to be a statewide tax. Just has to be a tax on lottery winnings as one state has already done recently. Annuities always fall within that snare.

    Top Federal Tax Rate (Married Filing Jointly - mostly) for the Past 30 Years (and a few other reference points). Just in the past 30 years the top rate has ranged from 28% - 50%.

    2015 39.6%
    2014 39.6%
    2013 39.6%
    2012 35.0%
    2011 35.0%
    2010 35.0%
    2009 35.0%
    2008 35.0%
    2007 35.0%
    2006 35.0%
    2005 35.0%
    2004 35.0%
    2003 35.0%
    2002 38.6%
    2001 39.1%
    2000 39.6%
    1999 39.6%
    1998 39.6%
    1997 39.6%
    1996 39.6%
    1995 39.6%
    1994 39.6%
    1993 39.6%
    1992 31.0%
    1991 31.0%
    1990 28.0%
    1989 28.0%
    1988 28.0%
    1987 38.5%
    1986 50.0%

    1981 70.0%

    1964 77.0%

    1963 91.0%

    1953 92.0%

    1945 94.0%

    Have a look for yourself at http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-brackets

      Groppo's avatar - cat anm.gif

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      Posted: January 11, 2016, 8:20 pm - IP Logged

      Top Federal Tax Rate (Married Filing Jointly - mostly) for the Past 30 Years (and a few other reference points). Just in the past 30 years the top rate has ranged from 28% - 50%.

      2015 39.6%
      2014 39.6%
      2013 39.6%
      2012 35.0%
      2011 35.0%
      2010 35.0%
      2009 35.0%
      2008 35.0%
      2007 35.0%
      2006 35.0%
      2005 35.0%
      2004 35.0%
      2003 35.0%
      2002 38.6%
      2001 39.1%
      2000 39.6%
      1999 39.6%
      1998 39.6%
      1997 39.6%
      1996 39.6%
      1995 39.6%
      1994 39.6%
      1993 39.6%
      1992 31.0%
      1991 31.0%
      1990 28.0%
      1989 28.0%
      1988 28.0%
      1987 38.5%
      1986 50.0%

      1981 70.0%

      1964 77.0%

      1963 91.0%

      1953 92.0%

      1945 94.0%

      Have a look for yourself at http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-brackets

      I have learned more about how taxes work, in this thread, than anywhere before. I mean it has all "clicked" so to speak.

      I wish to thank everyone, especially our host Todd, for making it all possible.

      For now, should I win, which won't happen, I shall elect the option for Cash!

      (then i can go around, once again, with loads of cash in my pockets. But it's ok, as i rarely leave the house.)

        larry3100's avatar - larry icon2.jpg
        Redwood City,California
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        Posted: January 11, 2016, 10:47 pm - IP Logged

        I see posts about " What if someone were to try to purchase all the different possible combination of numbers to win the Powerball game?, " well that would take days if not forever doing it, for sure. But let's assume the Lottery Headquarters makes an exception to the way it is done now, as I said, and the Lottery Headquarters says " Okay, we'll take the $292 million by cashiers check, to cover all the possible combination of numbers to win the game." well, you would get a lot of people upset about that. Well, on the other hand, you can see, there might be a few others in the game too that could win and the person who put out the $292 million would lose a good chunk of that investment in the game. I believe it's a good idea to do it this way, give a rich guy who has a lot of money, to take that chance. We have a " Win " Win " in the lottery, the game is over in no time, the Lottery Headquarters wins, and the people who play the game wins. Thank God.

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          Posted: January 11, 2016, 10:52 pm - IP Logged

          would take $584 million as tickets are $2 each

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            Posted: January 11, 2016, 10:53 pm - IP Logged

            Just love all the comments

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              Posted: January 11, 2016, 11:30 pm - IP Logged

              I purchased a bunch of PB tickets today at Safeway after waiting in line for about 35 minutes.  People were buying in excess of $100 in tickets from the machine and they were excited.

              Banana

                Groppo's avatar - cat anm.gif

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                Posted: January 11, 2016, 11:38 pm - IP Logged

                I purchased a bunch of PB tickets today at Safeway after waiting in line for about 35 minutes.  People were buying in excess of $100 in tickets from the machine and they were excited.

                Banana

                .

                Do you live in Beverly Hills, Ca?

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                  Posted: January 12, 2016, 12:08 am - IP Logged

                  .

                  Do you live in Beverly Hills, Ca?

                  Nope.....

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                    KCMO
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                    Posted: January 12, 2016, 1:20 am - IP Logged

                    I see posts about " What if someone were to try to purchase all the different possible combination of numbers to win the Powerball game?, " well that would take days if not forever doing it, for sure. But let's assume the Lottery Headquarters makes an exception to the way it is done now, as I said, and the Lottery Headquarters says " Okay, we'll take the $292 million by cashiers check, to cover all the possible combination of numbers to win the game." well, you would get a lot of people upset about that. Well, on the other hand, you can see, there might be a few others in the game too that could win and the person who put out the $292 million would lose a good chunk of that investment in the game. I believe it's a good idea to do it this way, give a rich guy who has a lot of money, to take that chance. We have a " Win " Win " in the lottery, the game is over in no time, the Lottery Headquarters wins, and the people who play the game wins. Thank God.

                    No one would actually do this because at the current pot you are still guaranteed to lose money. 

                    You spend 584 million to buy 292 million combos. 

                    You take the immediate lump sum....which is 868 million dollars. 

                    Say you only have to pay fed tax, and you live in a state where they don't tax any income/lotto wins. 

                    You are left with 524 million dollars in winings. 

                     

                    Congratulations to just spent 584 milion dollars to get back 524 million dollars. It would've been easier to just write a check for $60million dollars to the IRS....lol

                     

                    Oh and by the way this assumes you are the ONLY winner...which obviously other people will play too...so imagine if you had to split it with 1 or 2 or 3 other people......in which case you will lose over 100million+ dollars.

                      JAMORA's avatar - ladyclover
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                      Posted: January 12, 2016, 2:20 am - IP Logged

                      $868 million...that's it....no 1.4 bilion exists , yet....IF you take the annuity, they'll gladly pay you in payments while the interest and taxes fluctuate for 30 years...LOL How do they get away with this lie of 1.4 billion? LOL! $500 million of that number DOESN'T exist!

                      "Don't waste time, it's the stuff life's made of..."

                        joshuacloak's avatar - Money Swim-uncle-scrooge-mcduck-35997717-677-518.jpg

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                        Posted: January 12, 2016, 2:49 am - IP Logged

                        $868 million...that's it....no 1.4 bilion exists , yet....IF you take the annuity, they'll gladly pay you in payments while the interest and taxes fluctuate for 30 years...LOL How do they get away with this lie of 1.4 billion? LOL! $500 million of that number DOESN'T exist!

                        JAMORA is right in spirit. Anyone thinking about taking the annuity is falling for something we call the money illusion.

                        The 1.4 billion annuity is misleading as it doesn't exist beyond the cash amount they can pay you right now folks.

                        You need to stop thinking about “1.4 billion” and start thinking about true earnings power if you invested it by yourself.

                        All, the lottery does is take nearly the full cash jackpot and invest it into a government bond on your behalf. So the question becomes can they earn more than you in the free market?

                        The core issue is the federal interest rates are deceptively low. They can't earn jack crap for you at the moment compared to the free market. IF federal interest rates were normal and not low then we would have a true debate on our hands.

                        However, there is no debate when one option is far above the others. The cash option is kind of like how Donald Trump's polling numbers are so far above everyone else's numbers LOL.

                        You could earn far more by taking the cash jackpot. Paying the full tax bill of 39.6% on the cash jackpot and investing it all yourself in the free market. To prove my point. I walk you through it. Let us say I am the only winner.

                        868,000,000 Cash won.

                        If I was to take the annuity they would give me $21,072,009 of the cash right away to use now and invest the rest of it or "846,927,991" in case they would invest in a government bond to be paid out over the next 29 years of my life.

                        So am going to take that 846,927,991 part of the cash they would have invested in a government bond for me and do it myself.

                        First off: 846,927,991 Max fed rate of -39.6% = 511,544,506 (half a billion to invest is just absurd.)

                        Alright, so am going to invest this amount in the free market. Only the most profitable and safest stock market investments will do. (No high-risk bets allowed here folks.)

                        So am limiting my investments to say the likes of Coca-Cola - Nestle - Hershey, McDonald's - Exxon Mobil - etc.

                        Now say I will earn 4% the first year easy in dividends alone. ( 4% is very conservative) That is 20,461,780 million.

                        Now some of you will see the 2nd annuity payment amount is 22,125,610 and go: Hahahaha the annuity is earning me FAR more than you Mr. cash option guy. I would laugh right back at you annuity people. First off, my tax rate is now different to the annuity option person.

                        You're sure paying 39.6% for all the payments for next 29 payments (or whatever the rate changes too in that time period) I changed all my future rates over to the current lower rate of 23.8% max on all investment income. Yes, really your dividend income is taxed at a lower rate. Am playing the really long game here.

                        Annuity 22,125,610 -39.6% = 13,363,868
                        Cash 20,461,780 -23.8% = 15,591,876

                        Mr. Cash has over 2 million more to invest the next year.

                        Now for the really amazing part. For you see while I only got around 15m back from the corporations that year. 15m is not all true earnings from my new ownership.

                        They didn't send out all the "earnings" per share. The dividend they send out is only a part of the story.

                        They earned much more money than they sent out to you as a general rule. So they reinvested the profits back into the business on your behalf.

                        If you never sell and just hold on to really great companies. You will watch your dividend go sky high along with watching the company's total earnings go over the top in the coming decades.

                        Take a great company like Hershey: (If you love chocolate you love owning this company!)

                        Let's look back on recent history and see how the dividend paid out to owners grown over the years.

                        Let's use time jumps of 5 years...
                        What a single share paid out in total dividends that year:

                        In 1997: 0.32
                        In 2002: 0.6302
                        In 2007: 1.135
                        In 2012: 1.56

                        You see my point, right?

                        Your dividend income will go up a lot if you own best corporations and just hold on to them forever. You can't lose when owning the highest quality companies in the world.

                        Plus sense you would have never sold your "shares" in the companies. The cash keeps coming forever. There is no end date to the ownership unless you sell your ownership! The cash dividends are forever people! Hell, you could leave the stock to your grandchildren even.

                        Speaking of which, the numbers get beyond shocking when you own great companies for like 50 year plus range. (Generation wealth.)

                        Just thinking what I could turn half a billion investment into in 50 years is mind blowing.

                        It has been fun just doing the math on this jackpot size. I play the lottery for the entertainment value and this billion dollar jackpot is worth price tag of 2 bucks to dream this big.

                        P.S. When investing your money always remember "Murphy's Law" If there are two or more ways to do something, and one of those ways can result in a catastrophe, then someone will do it.

                        So don't be that complete and total moron you read about on lottery post news reports who lost everything. Avoid risk at all cost. If you can earn more than 4% the first year, but the road is with "risky" companies DON'T DO IT. The Coca-Cola Company will sure around in 30 years. Hell, Nestle has been at it for over 150 years!

                        No bees, no honey.

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                          Posted: January 12, 2016, 4:52 am - IP Logged

                          Monday Greetings To One & All ....

                          Perhaps this has been mentioned already -- the annuitized jackpot is currently $ 1.40-billion, and the cash option jackpot is $ 868 million.

                          Based on those figures, if the annuitized jackpot reaches at least $1.613-billion by the close of ticket sales on Wednesday, then the cash option jackpot would be worth at least one billion $$ -- before the taxman comes calling of course.

                          TRIVIA -- According to older editions of the Guinness Book of Records, the late billionaire J. Paul Getty once remarked "If you can count (all of) your millions, then you're not a billionaire".

                          PREDICTION (strictly unscientific) -- there will be 32 Grand Prize winners, and 149 2nd prize winners. Beyond that, I know nothing.

                          Thanx-A-Lot, Best of Luck and Please Remember to Always Play Responsibly,

                          Frank-0-Sport 16

                          I respectfully disagree that there will be 32 Grand Prize winners. My prediction is either it rolls or 1 to 3 Grand Prize winners.

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                            Posted: January 12, 2016, 5:56 am - IP Logged

                            Dallas Mavericks owner Mark Cuban, who knows what it’s like to suddenly become incredibly wealthy has some tips (some practical and some philosophical) for the winner or winners.

                            • Hire a tax attorney first.
                            • Don’t take the lump sum. You don’t want to blow it all in one spot.  (I don't agree with him on this one. The opposite of not taking a lump sump is taking the annuity)
                            • If you weren’t happy yesterday you won’t be happy tomorrow. It’s money. It’s not happiness.
                            • If you were happy yesterday, you are going to be a lot happier tomorrow. It’s money. Life gets easier when you don’t have to worry about the bills.
                            • Tell all your friends and relatives no. They will ask. Tell them no. If you are close to them, you already know who needs help and what they need. Feel free to help SOME, but talk to your accountant before you do anything and remember this, no one needs 1m dollars for anything. No one needs 100k for anything. Anyone who asks is not your friend.
                            • You don’t become a smart investor when you win the lottery. Don’t make investments. You can put it in the bank and live comfortably. Forever. You will sleep a lot better knowing you won’t lose money.

                            But don’t take this as a suggestion from Cuban that you should spend a lot of money on lottery tickets. The odds (one in 292.2 million) will continue to be remote no matter how many tickets you buy.

                            “It’s OK to spend 2 dollars for entertainment value,” he said via email. “If you have 10 dollars go to a Mavs game.”

                             

                            Dunno about the don't invest money comment.  I say invest a portion of it and keep a nice pile for those really rainy days.

                              savagegoose's avatar - ProfilePho
                              adelaide sa
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                              Posted: January 12, 2016, 6:40 am - IP Logged

                              I like that last post.  as to the annuity option. you cn practice ot messing up and if you blow it all you only have to wait a year to try again ad you get 29 more times till you really are broke.  Also like the no one needs $1M

                              2014 = -1016; 2015= -1409; 2016 JAN = -106; FEB= -81; MAR= -131; APR= - 87: MAY= -91; JUN= -39; JUL=-134; AUG= -124; SEP = -123; OCT= -84  NOV=- 73 TOT= -3498

                              keno historic = -2291 ; 2015= -603; 2016= JAN=-32, FEB= +12 , MAR= -86, APR = -77. MAY= -48, JUN= -29, JUL=-71; AUG = -52; SEPT= -43; OCT = +56 NOV = -33 TOT= -3297

                                 
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