Simply for FYI purposes. Let's say you win the jackpot. What would be your immediate, short-term, and long-term activity
Obviously hiring professionals is likely a good idea to guide a novice. My question is who should a jackpot winner hire. A tax lawyer, a financial advisor, an accountant, some hybrid of the above, or none at all. When it comes to money.....in order to avoid getting ripped off......what should be the going rate/retainer to pay these professionals. A one time flat fee, a commission-based rate, an annual salary, or more incentive/tax reduction based approach? Basically what is a good process and decision making process in choosing the folks that are gonna be entrusted with your funds?
Next....is the step to find ways to lighten your tax burden. Obviously winning the jackpot stands to put you into the top fed income long-term tax bracket which is hovering around 35%. Add in your state portion and that becomes quite alot of money that Uncle Sam will receive. For pure informational purpose, what is the best way to lighten the burden? Any general ideas and tips?
As a devout religious man...I plan on contributing 10% to my church. Likely that would be considered a charitable contribution. Would this noble act aid my efforts to soften my own personal tax burden?
I plan on gifting amounts to immediate-close family members(siblings, parents, etc.). I think the gift tax exclusion allows one to give 12,000 per person per yr. I am fully aware of the gift tax advatages and disadvantages.
Perhaps I am too conservative or cheap....but I am not necessary the spending fool. I want my winnings to last.
If I shall ever win.....my plans include finding suitable financial insitutions. I would be a fool to deposit all my money into one bank. Perhaps researching a min. of 5 sound banks and a solid investment firm. Then investing part of my winning(40%) in money market account and CDS. These conservative savings provide a safe 5% annual return of interest that is more than enough to provide for my needs until retirement.
Then with 50% of my winnings I take a more daring but still relatively safe investment growth strategy. A diversified mutual fund portfolio with limited stocks on the low-end. Given the low economy we are in right....given time and past history shows a likely bounce and comfortable capital gains with stable dividend yields.
Then with the remaining 10%. Perhaps this is how I spoil myself and my family. Pay off debts. Secure housing and land. Vehicles and vacations to enjoy life. Checking account and source of revenue for necessary expenses such as food, utilities, and bills.
How would you all rank my rather simple strategy. Not bad for a 25 yr old SINGLE man with no children......right? What would you all do different? Just for fun.
What are your plans? Discuss :)