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So what can you do with $7,500,000?

Topic closed. 19 replies. Last post 8 years ago by larry3100.

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Entertaiment Capital
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April 19, 2006
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Posted: March 8, 2009, 1:56 am - IP Logged

 I mean...after tax and all the deductions.

 It's a lot of money. But as a jackpot prize it's kinda modest. But you are set for life.

 People have different opinions but I think the pie is a bit small to share with others. I have parents and two sisters. (and a whole bunch of relatives.) Relatively small jackpots less media spotlight. But some people are obsessed with chasing lottery winners, no matter how small the prize is. Fortunately hundreds of people in LA county share the same first and last name with me. As long as I don't get photoed I will be relatively safe.

 So let's say I am supposed to give 10% of the prize to my parents. And 2% of the prize for each sister. Then I am left with $6,450,000. Not bad.

 The problem is that housing in LA is still expensive. I really want to live in Pasadena. But new (and big) houses are at least 1.5 mil. That's too much.

 A modest sized houses in Inland Empire is about $300,000. If I buy ten of them and become a landlord, that would be nice. The monthly rate for such house is about $2000. Of course I will have to pay taxes and I'll have other sources of passive incomes. And I intend to give monthly living expenses to my parents. I guess I'll be left with $10,000 after tax and parents. After buying rental properties I am left with $3,450,000. A modest house in Pasadena costs about $750,000. I am left with $2.7 millions. I'll be using the rest of the prize for nestegg. Some in CD. Some in bond fund. Some in money market. I have no intention to touch the nestegg.

 But I'll have to pay property tax for houses every year. I really can't enjoy GOOD life. I still need a job for grocery money and self-esteem. And I can't even dream about fancy cars. I guess I'll have to stick with my 2008 Camry.

 70% of jackpot winners go broke because they have no knowledge about handling money. And having $20~30 millions won't make you secure if you are a big spender.

    DC81's avatar - batman39
    MI
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    August 31, 2007
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    Posted: March 8, 2009, 4:55 am - IP Logged

    You're missing a lot of other taxes and other costs that likely would make you go broke with this kind of plan. Especially the gift tax in giving away a combined $1,050,000 to your parents and sisters would mean you'd be paying out about $449,100 on that alone thanks to the "wonderful" 45% gift tax (unless it's lower now and yes I deducted $13,000 exception for each) so that would leave you with $6,000,900, so if you plan this it'd be best to get it in writing and notarized now. I could go on, but it's late, even later (thanks daylight "savings" time) but IMO with what you have there you'd be really setting yourself up for trouble so you might want to think about it a bit more. I'll share what I'd do later and if need be go into more detail, though I'm sure many others here could point out the things you're missing and the potential and likely problems that would lead you to probably going broke if you were to follow through with something like this as you've written it.

    You can't predict random.

      Pogo's avatar - wfl
      NC
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      Posted: March 8, 2009, 6:48 am - IP Logged

      I would stick it all in a money market account, which you can still find floating around earning 4% on 7.5 mil would net you 75,000 in cash quarterly... If you want to get a lil crazy then put some of the money in the brazilian stock exchange which is very stable and would make you a stable income through dividends - either way I wouldn't spend the principal until I get into retirement... Good Luck on the big win, God Bless - Pogo

        time*treat's avatar - radar

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        Posted: March 8, 2009, 7:24 am - IP Logged

        Depending on how and where you want to live, yes, 7.5 mill can leave you short. People with much more have gone broke.

        As for me, having tenants (and all the headache that goes with them) is not on my to-do list.

        In neo-conned Amerika, bank robs you.
        Alcohol, Tobacco, and Firearms should be the name of a convenience store, not a govnoment agency.

          ThatScaryChick's avatar - x1MqPuM
          Idaho
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          November 21, 2007
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          Posted: March 8, 2009, 8:02 am - IP Logged

          My close family members (mom and sisters) and I could do very well on 7.5 million and have a comfortable life.

          "No one remembers the person who almost climbed the mountain, only the person who eventually gets to the top."

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            August 17, 2007
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            Posted: March 8, 2009, 8:10 am - IP Logged

             I mean...after tax and all the deductions.

             It's a lot of money. But as a jackpot prize it's kinda modest. But you are set for life.

             People have different opinions but I think the pie is a bit small to share with others. I have parents and two sisters. (and a whole bunch of relatives.) Relatively small jackpots less media spotlight. But some people are obsessed with chasing lottery winners, no matter how small the prize is. Fortunately hundreds of people in LA county share the same first and last name with me. As long as I don't get photoed I will be relatively safe.

             So let's say I am supposed to give 10% of the prize to my parents. And 2% of the prize for each sister. Then I am left with $6,450,000. Not bad.

             The problem is that housing in LA is still expensive. I really want to live in Pasadena. But new (and big) houses are at least 1.5 mil. That's too much.

             A modest sized houses in Inland Empire is about $300,000. If I buy ten of them and become a landlord, that would be nice. The monthly rate for such house is about $2000. Of course I will have to pay taxes and I'll have other sources of passive incomes. And I intend to give monthly living expenses to my parents. I guess I'll be left with $10,000 after tax and parents. After buying rental properties I am left with $3,450,000. A modest house in Pasadena costs about $750,000. I am left with $2.7 millions. I'll be using the rest of the prize for nestegg. Some in CD. Some in bond fund. Some in money market. I have no intention to touch the nestegg.

             But I'll have to pay property tax for houses every year. I really can't enjoy GOOD life. I still need a job for grocery money and self-esteem. And I can't even dream about fancy cars. I guess I'll have to stick with my 2008 Camry.

             70% of jackpot winners go broke because they have no knowledge about handling money. And having $20~30 millions won't make you secure if you are a big spender.

            That's why you consult with a financial advisor when you win......

              savagegoose's avatar - ProfilePho
              adelaide sa
              Australia
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              Posted: March 8, 2009, 10:29 am - IP Logged

              even  chosing a financial planner is a minefield. there are fee for service finance planners and comission based finance planners, you can imagine the comission on 7.5 mill, when shady investment plans have to offer finance planners larger cuts to get them to use/ recomend them.

               

              ideally u wan t a fixed fee financial planner, who rebates any commisions. or one who earns a set rate like 1% of any profit. and also no comissions.

              sorry im really agaisnt any advice that gives the adviser a commission, as its biased towards them planning their retirement on your money , not your retirement.  a lot of institutions offer the 1st session as free, and you could go to very many of them, with a story of i have X mill to invest, and see what they come up with. you could prob see 10 or so and by then get a good idea of what common themes are running in their advice.

               

              heck you could stick the money somewhere safe, and study finance planning while it earns u interest and get some idea of how to spend it safely.

              once you have it, dont be in a hurry to lose it. theres many more years and scammers out there who will help you with that part. even tell family, you are only giving them the max allowable gift ea year 14k or what ever somone said. while " you sort out a plan " Im sure most people wouldnt begrudge a 14k bonus ea christmas. and if they do see how they like non.

               

              now is prob the most dangerous time to win a lot of money what with the printing press at the fed running 24/7 and banks being bailed out left right and centre. $7.5 mill would be great, but for me id think the hard part has only just started yeah winning it was hard keeping it dsafe is going ot be a full time job. and if you dont treat it as a full time job, there are people out theres whose full time jobs are trying to swindle it from you.

              but maybe im just a pessimist.

              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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                Entertaiment Capital
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                Posted: March 8, 2009, 4:12 pm - IP Logged

                You're missing a lot of other taxes and other costs that likely would make you go broke with this kind of plan. Especially the gift tax in giving away a combined $1,050,000 to your parents and sisters would mean you'd be paying out about $449,100 on that alone thanks to the "wonderful" 45% gift tax (unless it's lower now and yes I deducted $13,000 exception for each) so that would leave you with $6,000,900, so if you plan this it'd be best to get it in writing and notarized now. I could go on, but it's late, even later (thanks daylight "savings" time) but IMO with what you have there you'd be really setting yourself up for trouble so you might want to think about it a bit more. I'll share what I'd do later and if need be go into more detail, though I'm sure many others here could point out the things you're missing and the potential and likely problems that would lead you to probably going broke if you were to follow through with something like this as you've written it.

                 That's not really a problem. Group claim form allows people to share the prize with other people as co-winners.

                  GamerMom's avatar - tails

                  United States
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                  Posted: March 8, 2009, 5:05 pm - IP Logged

                  even  chosing a financial planner is a minefield. there are fee for service finance planners and comission based finance planners, you can imagine the comission on 7.5 mill, when shady investment plans have to offer finance planners larger cuts to get them to use/ recomend them.

                   

                  ideally u wan t a fixed fee financial planner, who rebates any commisions. or one who earns a set rate like 1% of any profit. and also no comissions.

                  sorry im really agaisnt any advice that gives the adviser a commission, as its biased towards them planning their retirement on your money , not your retirement.  a lot of institutions offer the 1st session as free, and you could go to very many of them, with a story of i have X mill to invest, and see what they come up with. you could prob see 10 or so and by then get a good idea of what common themes are running in their advice.

                   

                  heck you could stick the money somewhere safe, and study finance planning while it earns u interest and get some idea of how to spend it safely.

                  once you have it, dont be in a hurry to lose it. theres many more years and scammers out there who will help you with that part. even tell family, you are only giving them the max allowable gift ea year 14k or what ever somone said. while " you sort out a plan " Im sure most people wouldnt begrudge a 14k bonus ea christmas. and if they do see how they like non.

                   

                  now is prob the most dangerous time to win a lot of money what with the printing press at the fed running 24/7 and banks being bailed out left right and centre. $7.5 mill would be great, but for me id think the hard part has only just started yeah winning it was hard keeping it dsafe is going ot be a full time job. and if you dont treat it as a full time job, there are people out theres whose full time jobs are trying to swindle it from you.

                  but maybe im just a pessimist.

                  I agree.  I can't ever imagine finding a straight financial planner once everyone knows you won millions.  They will all know you are nieve and ready to pounce.  Suze Orman puts her $25 million in municipal bonds.  Since she is the ultimate financial planner I would follow her lead.  probably half in munis and half in CDARs.  It's not like I would be wanting to make more if I had that much money, just to live off the interest, really. 

                   

                  I guess i'm a pessimest too.

                    edge's avatar - waveform

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                    Posted: March 8, 2009, 5:09 pm - IP Logged

                    allocate 99% in gold and the platinum and burry deep underground (no banks!), as de-flation will soon change to galloping inflation like no tomorrow... (dollar printing machines have already kicked in a second gear)

                    ab actu ad posse valet illatio - from the past one can infer the future

                      Elizabeth03's avatar - cat anm.gif
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                      Posted: March 8, 2009, 5:46 pm - IP Logged

                      First, I would get far away from the people trying to mooch money off of me, then I would go Hyper somewhere and relax and rejoice in the reality that I acquired all of that money, then I would pay off impending bills, and then travel to places I have wanted to see for years..Party

                        CowboysFan's avatar - Cowboys
                        Sunny California
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                        Posted: March 9, 2009, 12:46 pm - IP Logged

                        I live a simple life and would continue to do so.  I would just buy a new car that is good on gas mileage and I would also buy a condo. $7.5 million dollars could easily last me the rest of my life and the only thing that would change is that I would go on 2 nice vacations a year.

                          savagegoose's avatar - ProfilePho
                          adelaide sa
                          Australia
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                          Posted: March 12, 2009, 10:18 am - IP Logged

                          I live in australia and hows prices haven't crashed here yet. Yes pwoplw are still paying $300k for a slum, but our prices dont seem to crash like in america. anyhow; I was just thinking about if i won 1 mill i couldnt even become a slum lord! theres maybe  houses cheap enough to get for $200k so that would be 5 house, rent would be nearly $200 a week ea. more like $180 so less than a k a week.

                           

                          now i would have 5 house to maintain and tennants to keep an eye on. i spose close to 50k a year income would be ok , but i bet expenses would cut into that rather hard. so in aust. $1 mil wont make you a slum lord.

                          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

                            grengrad's avatar - nw rogue.jpg
                            Raleigh
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                            Posted: March 13, 2009, 9:45 am - IP Logged

                            DC81 Especially the gift tax in giving away a combined $1,050,000 to your parents and sisters would mean you'd be paying out about $449,100 on that alone thanks to the "wonderful" 45% gift tax (unless it's lower now and yes I deducted $13,000 exception for each) 

                            The first $1,000,000 you give in life is exempt.


                            savagegoose  even  chosing a financial planner is a minefield. there are fee for service finance planners and comission based finance planners, you can imagine the comission on 7.5 mill, when shady investment plans have to offer finance planners larger cuts to get them to use/ recomend them.

                             ideally u wan t a fixed fee financial planner, who rebates any commisions. or one who earns a set rate like 1% of any profit. and also no comissions.

                            I agree completely. That said, there are a lot of smart people on here (like myself) who invest in the market and would be able to give good free advice as a starting point to anyone on here that wins.


                            savagegoose heck you could stick the money somewhere safe, and study finance planning while it earns u interest and get some idea of how to spend it safely.

                            Also, a good idea.


                            savagegoose now is prob the most dangerous time to win a lot of money what with the printing press at the fed running 24/7 and banks being bailed out left right and centre.

                            Completely wrong. Everything is priced very low, volatility is very high, and there are more opportunities for a savy trader or investor than there have been at any point in the last 25 years. I could write a plan to make 10% a year for the next 5 years on a back of a napkin. Heck, I am up 10% this week. The hard part is finding someone knowledgeable who is also trustworthy.


                            No disrespect to you, but Suze Orman is a horrible source for investment information. You could only do worse by following Jim Cramer's Mad Money.


                            edge allocate 99% in gold and the platinum and burry deep underground (no banks!), as de-flation will soon change to galloping inflation like no tomorrow... (dollar printing machines have already kicked in a second gear)

                            Gold is a hedge against inflation, but not a long-term investment. It will be a great short term investment once the economy picks up, but on a time horrizon of anything longer than 3-5 years, it is probably not a place to keep your money. I  have 5% of my net worth in gold, incase the sky falls.

                              CowboysFan's avatar - Cowboys
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                              Posted: March 13, 2009, 11:48 am - IP Logged

                              Thank you Grengrad!  Everyone thinks that Orman and Cramer are the only two people in the world to listen to when it comes to investment information. I can't stand either of them.