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if you won, how would you invest it?

Topic closed. 23 replies. Last post 10 years ago by justxploring.

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spy153's avatar - maren

United States
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December 15, 2005
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Posted: June 20, 2006, 8:24 pm - IP Logged

If you won a jackpot, how would you invest the money? Large pot and small?

voir-vous dans mes reves!Cool

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    Amarillo/Austin
    United States
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    April 25, 2003
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    Posted: June 20, 2006, 9:23 pm - IP Logged

    I just finished an investment course sponsored by Success Magazine.  They recommend covered Calls and Puts for maximum leverage  and greatest safety.

    Spent $1,800 for the course.  Hope it works out.

    Orangeman                                                  Drum

     

      spy153's avatar - maren

      United States
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      Posted: June 20, 2006, 9:49 pm - IP Logged

      good luck and thanx for your reply. I was thinking something safe. are mutual funds safe you think?

      voir-vous dans mes reves!Cool

        guesser's avatar - Lottery-017.jpg

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        June 16, 2006
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        Posted: June 20, 2006, 10:54 pm - IP Logged

        6 million after taxes low-volatility securities, and other dividend or interest-paying instruments, locked away that I can't get to for the rest of my life (almost like a blind trust), and 'live off of' the interest that earns.

         

        50% of what's left I'd blow/waste on things I've always wanted to do, like spend a month in Hong Kong on Chinese New Year, and all kinds of exotic travel, the other 50% I would endow scholarships, and other non-profit organizations I wish I could give more to.

         

        I would NOT immediately go buy a multi-million dollar house in South Beach or Phoenix, or Hollywood, or Vegas, or Trump Tower, etc., I'd still live simple as far as my surroundings are concerned.  Except for my 3 Ferraris and an add-on 6 car garage (3 wide and 2 deep).

         

        I get a kick out of people that say they would buy a palace in South Beach (Miami), a penthouse in NYC, a house in Scottsdale, a house in Tahoe, a 2,000 acre ranch in Montana, a house in San Francisco, a condo in Hollywood.........

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          New Member
          Springfield, MA
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          June 15, 2006
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          Posted: June 20, 2006, 11:01 pm - IP Logged

          I'd give some money to my parents, buy a simple house that's big enough for about 30 domestic cats, buy a decent computer for computer chess, buy a simple inexpensive car that's less than 3 years old, and put the rest of the money in a bank to collect interest slowly. 

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            New Jersey
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            September 4, 2005
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            Posted: June 20, 2006, 11:24 pm - IP Logged

            I'd buy a lot of foreign securities, in diverse countries.

            I'd invest some money here, but most of it abroad.  I think the dollar's going to get killed, big time.  Except for some short term emergency funds, I'd minimize the amount of liquid holdings here, but maybe buy some small farms, if the prize were large enough.  I'd also invest in my business, but not all of it.

            I'd pretty much live exactly as I do now, but pay off my house, and fix a few things. 

             

              bellyache's avatar - 64x64a9wg

              United States
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              March 18, 2005
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              Posted: June 20, 2006, 11:41 pm - IP Logged

              Savings, investestments, Buy a few simple things at the beginning.

              Dance like no one is watching.

                lottaloot's avatar - AvatarZ56
                Redford/MI
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                January 18, 2004
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                Posted: June 21, 2006, 9:11 am - IP Logged

                I'ld invest in both CD'S and S & B's. 

                Get a new car for the children, my mother & myself along with a modest home for each of us.  (nothing fancy but paid for)

                Get my husband a nice little Lake home with a nice little boat

                Then I would bank anything that's left.

                L ttaL   T

                  SirMetro's avatar - center
                  East of Atlanta
                  United States
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                  Posted: June 21, 2006, 10:26 am - IP Logged

                  Mutual funds are perhaps the safest investment vehicle for an average person who doesn't want to spend the required time to investigate the individual stocks. The primary advice I would offer regarding mutual funds is the following;

                  1) Stay with NO-LOAD funds. Why pay when there are lots of funds to chose from that perform well without robbing you when you put your money in or take it out.

                  2) Buy the funds direct. Again, why pay commission fees to buy something a quick phone call can get you for nothing.

                  3) Buy funds that match your lifestyle and way of thinking. If you are a conservative person who just don't care for risk, stay with the growth (& income) funds. Avoid the Biotech, overseas and emerging funds unless you have a stomach to accept both risk and possibility of your investment going to zero.

                  ===================

                  For those who are looking at "Covered" put & call options, again, be prepared to investigate the stocks you are looking at. Having a "Covered" option means you have to OWN the stock you are selling the option on. For those who do not quiet understand, perhaps the following will help;

                  1) Put Option - This allows you to sell the right to somebody to sell a stock to you for a preset amount of money. To have it covered means you have set aside enough funds to cover the total cost of the purchase should the Put be excercised. Otherwise, you will find yourself in a huge world of hurt. Upside is, if the stock continues to rise in value, nobody will excercise the right because who wants to sell a stock for less then it's worth? Downside is, if a stock takes a dive, you might find yourself paying $50 for a stock worth only $2 !!!

                  2) Call Option - This allows you to sell the right to somebody to purchase stock from you for a preset value. A covered Call means you currently own the stock you are selling the Call on. This is perhaps the safest and most profitable investment vehicle one could use to exceed an annuall 10% return on investment (or more). The upside is, if the stock stays below set value until the option expires, you get to pocket free cash. The great part is, you can keep doing this each time the option expires and is not excercised. Also, if you sold the option for $5 a share and the option is at $20, you still get the $20 plus you KEEP the $5 as an added bonus (making the stock worth $25 to you). Downside is, if the stock skyrockets to $100 a share and you sold the rights for only $50, you lose out on the huge jump. Side note: this very seldom to almost never happens to such an extreme, however, stocks can move enough to force the option to be excercised.

                  3) Excercised - This is the process of option owner buying (call) or selling (put) the stock at the preset price. Also, options expire 3 months after they are wrote. This means, you have to maintain the funds or stock for no less then 3 months. There are other options that last longer, but those are typically done by large investment companies and I suggest that you do not tie-up your funds for that length of time.

                  4) Options - A single option is equal to 100 shares of stock. You can NOT sell a fraction of an option. If you do not have 100 shares of stock, do not plan on using options. Also, stocks are typically bought and sold in lots of 100 (or divisable by 100). Odd lots generally are expensive and most brokers will not cut you any discounts for buying odd size lots. 

                  5) Covered - This means you have either the stock (for calls) or cash (for puts) to cover the total value of the option.

                  ================

                  When it comes to the stock market, due dilegence is required. If you fail to do the research, do not expect to keep your investment. The stock market is NOT like the lottery. Most stock downfalls are preanticipated. If you heard it on the news, the stock market has already reacted. Getting in on the tail in of a rush will only end up costing you money instead of making you money. For those who are looking for the safest individual stocks, my suggestion has always been this to my friends. Go to your pantry and open it up. Look at the brand names you see in there. Sure, McCormick may be a dull investment, but it's one that has consistently grown an average of 5% plus per year with little to no drops. IBM on the other hand is currently worth $78 to $79 a share. Sad part is, those investors who had this same stock in 1993 would actually be showing a LOSS because around that year, the stock went as high as $115 a share. The stock has NEVER split or given anything more then about a 2% dividend to the investor. For me, 2% just is not worth considering.

                  For those of you who are safety concious, look for growth stocks that also pay dividends. Utility companies fit this bill very well, but they also tend to drop in value around the spring time and rise in the winter, unless it was a warm winter.

                  =============================

                  Now, to answer the orginal question as to how I would invest the money. First, the win would have to be over $500,000 for this to apply. Anything less would go towards bills and home repairs.

                  This investment idea is based upon an after-tax win of no less then $1 million. I would set-aside 10% for various charities. Another 20% would be set-aside to pay off the bills and do home improvements. I would invest 60% into growth and income stocks. These stocks would have to pay out a dividend of as much as 2.5% and show an average annual growth of 7.5% (and yes, there are many that fit this bill). Stocks typically pay the dividend quarterly, so I would spread the monies across a minimum of 3 stocks to insure dividend income for each month. The remaining 10% would be used for trading stock options and dabbling in higher risk investments that offer huge rewards (anything over 50% return on investment). And uhmm, yes, I have spent many years fine tuning this day dream so that one day, I will make it a reality, with or without a lottery win.

                  Sir Metro

                    spy153's avatar - maren

                    United States
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                    Posted: June 21, 2006, 10:55 am - IP Logged

                    Thank you all for your replies. I see I am not the only one who has pondered this most important question more than once.

                    sir metro, you will be a millionaire with or without a lottery win.... if and when you begin investing your money. So, basically, I am right to consider mutual funds and small things like commodities? I want the absolute safest way to guarantee a growth over time. I don't want to have to continually keep check on it. Yelling sell this, buy that... I want to stick it in something safe to grow some more money.

                    btw, I'm not even sure of this part to begin with.... do you HAVE to invest your money? I mean, I know they just don't let you stick the money in the bank. It doesn't work that way to my understanding. The bank is going to ask you where you want to invest it.

                    voir-vous dans mes reves!Cool


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                      Posted: June 21, 2006, 11:03 am - IP Logged

                      Regardless of the jackpot, if I win the lottery, I take cash value and buy house first.

                        SirMetro's avatar - center
                        East of Atlanta
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                        Posted: June 21, 2006, 1:37 pm - IP Logged

                        Thank you all for your replies. I see I am not the only one who has pondered this most important question more than once.

                        sir metro, you will be a millionaire with or without a lottery win.... if and when you begin investing your money. So, basically, I am right to consider mutual funds and small things like commodities? I want the absolute safest way to guarantee a growth over time. I don't want to have to continually keep check on it. Yelling sell this, buy that... I want to stick it in something safe to grow some more money.

                        btw, I'm not even sure of this part to begin with.... do you HAVE to invest your money? I mean, I know they just don't let you stick the money in the bank. It doesn't work that way to my understanding. The bank is going to ask you where you want to invest it.

                        First, stay away from Commodities (also called "Futures") unless you would like a few tons of pork bellies delivered to your door. Seriously, commodities are NOT for the timid investor and there are a ton of rules and requirements (including financial minimum limits, check with SEC for current rules). I suggest that you stay with a really good mix of no-load mutual funds.

                        Second, NO, you do NOT have to invest a single penny. The only reason Banks push to get you to invest your money is to insure that you keep your money tied up at their bank for a long period of time. This gives the Bank more money to lend and helps make the Bank stronger. Also know this, Banks only insure the first $100,000 of ALL your money combined. Not per each account, but per each social security number. Most Brokerage accounts insure up to the first MILLION per social security number. So by spreading around a few for different reputable Brokerage firms will help you insure some of your wealth. Know also, investments are NOT insured. If it dives, you lose, it is that simple. BTW, I thought the story that follows was kinda cute and is representative of a typical Bank's attitude (edited for language):

                        A crusty old man walks into a bank and says to the woman at the window, "I want to open a d@%n checking account."

                        The astonished woman replies, "I beg your pardon, sir. I must have misunderstood you. What did you say?"
                        "Listen up. d@%n it. I said I want to open a d@%n checking account now!"

                        "I'm very sorry sir, but that kind of language is not tolerated in this Bank."

                        The teller leaves the window and goes over to the bank manager to inform him of her situation. The manager agrees that the teller does not have to listen to that foul language.

                        They both return to the window and the manager asks the old geezer, "Sir, what seems to be the problem here?"

                        "There is no d@%n problem," the man says. "I just won $200 million bucks in the d@%n lottery and I want to put my d@%n money in the d@%n bank."

                        "I see," says the manager, "and is this b$*#$h giving you a hard time?"

                          Uff Da!'s avatar - InCelebration 001.jpg
                          Washington State
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                          Posted: June 21, 2006, 7:56 pm - IP Logged

                          I'd probably put enough money for the first two years in something liquid and reasonably safe liKe bank CDs or money market funds.  The next two or three million I'd probably put in no-load mutual funds, as I'm comfortable with them.  If the win was larger than that, I would likely seek out and get the advise of a financial advisor before making further decisions.  At this stage of life, though, I really would not want to put my money where I had to keep close tabs on what was happening.  I want to spend the rest of my golden years

                          PLAYING!

                          Dance

                            guesser's avatar - Lottery-017.jpg

                            United States
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                            Posted: June 22, 2006, 12:19 am - IP Logged

                            Thank you all for your replies. I see I am not the only one who has pondered this most important question more than once.

                            sir metro, you will be a millionaire with or without a lottery win.... if and when you begin investing your money. So, basically, I am right to consider mutual funds and small things like commodities? I want the absolute safest way to guarantee a growth over time. I don't want to have to continually keep check on it. Yelling sell this, buy that... I want to stick it in something safe to grow some more money.

                            btw, I'm not even sure of this part to begin with.... do you HAVE to invest your money? I mean, I know they just don't let you stick the money in the bank. It doesn't work that way to my understanding. The bank is going to ask you where you want to invest it.

                            What you should do is put the money in several different banks - probably dozens of them - because each account is FDIC insured only to $100,000, but I think it is being upgraded to $200,000 soon.

                            You would open one account under your name, one under your spouse's name, one under your name/spouse name, and one under spouse name/your name, to have 4 different insured accounts at each bank.

                             

                            Next, buy SAFE stocks or mutual funds that pay a consistent dividend, you don't need a stock that goes up and down like a yo-yo. Put enough in these funds where you can live off the interest for the rest of your life.

                             

                            Then, blow the rest, endow some scholarships at your high school, pay for a new gym or library, endow new computers, give to the Humane Society, give to whoever your heart desires........

                            You deserve it.

                            I deserve it. (If I win it).

                            I have never seen an armored car in a funeral procession.

                            You can't take it with you.

                            Enjoy it. 

                              1977's avatar - flower2
                              st. pete
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                              Posted: June 22, 2006, 12:27 am - IP Logged

                              Most people that come into money-big money make the mistake of trying to find ways to make more money with high risk deals. Play it safe--a little real estate ,some mutual funds,a IRA  and enjoyed the money.