Teddi,
Going back to your original posting. The house purchase is depending on how much you win might and depending on your budget in the future. Lets say you take home a 50 million dollar cash option win of which Uncle Sugar taxes his 40%(yeah yeah I know it's 39.6% right now) plus any state taxes(if applicable)...so for sh*ts n giggles you walk away with ohhhhhhhhhh 26-28 million after all the taxes and lawyers fees,etc etc............The main thing is the nest egg for future financial gain
Now let's address 2 main issues. (1) where do you want the main bulk of that cash for your financial nest egg to live off the rest of your lives ? Something that gives you 3 ? 4? 5% divendends I trust ?..okay, now(2) how much do you want to want to have out of the $26-28 Million to have as the nest egg ?? Let's saaaay you want to also want to help out family n friends and a few choice charities, maybe set up an alumnist scholarship...don't forget the house......
You decide on the million dollar home and a few toys....So after all your fun and sharing that you are planning on doing, STILL ...that nest egg is your baby that has to be addressed before any major purchase or assistance to others.
This is just my humble opinion...I would suggest you set aside $20 Million to get that 3-5% interest/dividends....3% of 20 million is 600K..not too shabby, 4% is 800K..NICE..but 5%, now that's some MOOLAH,,, sweeeeeet !!! I will take it....buuuuut, here comes Uncle Sugar & Auntie State for there hands in the newly acquired cookie jar...You know that you are still in the very top bracket of 39.6% as far as taxes are concerned(unless you give it away to charities,etc etc). Move to a state with no state income tax or dividend tax
Well shoot taxes on 600K arent too terrible right ? Lets look and see shall we ? $600K-40%- Auntie State's(lets say 6%) tax rate.net profit around $324K+/-..OOPS, gotta pay my accountant and investors fees,drop another 20-30K on them,now I am down to about $295-300K.....on $800K ?..take home after taxes,financial gurus and accountant, etc etc is about $400K or a few thousand over that....on 1 Million ? after taxes and fees you get $510K......
Would you need to worry about spending ???....not too much, but you can't go hog wild and start buying properties and investing in friends businesses, vacations,cause you still have property taxes and maintenance on that $1 Million + dollar mansion, family gifts, health insurance.a new car every 4 or 5 years.who knows, maybe you also bought a lakeside cabin or Condo some place ?? more property taxes and upkeep and costs taken out of you profit.....Do you want to worry about your credit rating ??? I wouldn't, but then again I can control my spending habits. The question is, can you if you won this amount ?
So when it's all said and done, even a $20 million dollar nest egg producing 5% still requires a budget.
Just my 2 pennies worth