My response to said age-old question? Read on below.
CURRENT MUSIC:
Barenaked Ladies - "If I Had $1,000,000"
Gordon
Quite fitting for today's entry, if I may say so myself. As one of the most-known songs by the Barenaked Ladies, their silly song on what they'd get with a million dollars is a staple at their live performances.
But what would I do with a million dollars... or more...?
"If you think you can win, you can win. Faith is necessary to victory."
William Hazlitt
(Table Talk: Essays On Men And Manners - "On Great and Little Things")
Hehehehe... that, it does. That, it does. Maybe that's why the ones who achieve the greatest of victories usually have some kind of high-spirited determination. Be it originating from religion or iron will or what have you, it doesn't matter - the fact that they had it in the first place makes them stronger than most others.
Good afternoon, everybody! Here's today's entry for you! May it help you in finding out a little more about myself, and may it inspire you to do... uh, something with your (financial) lives.
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| "I don't know if you've ever seen a hundred thousand dollars - except maybe in the movies. But I assure you: something gets lost in the translation." |
As for me, I have a plan should I ever win the lottery. I normally don't pay attention to it much, nor do I play often (my usual ticket purchase amounts to a rough "one ticket per five months" cycle. Some of my friends will notice me being on some kind of hot streak - maybe numerous consecutive victories in a children's card game, killing sprees in first-person shooters, high scores in some kind of ad-hoc trivia game, or a string of good and/or lucky events in my favor that seem to be amassing on one particular day. Once that happens, someone is bound to be sure to me the cliché reactionary statement, "Maybe you should buy a lotto ticket." Sure enough, I buy one and it doesn't net me anything, but eh - it's alright. Just a buck over the course of five months - no big loss there.
Oh, and in case you're from California and want to know: today the jackpot of the Mega Millions (according to the California Lottery) is at $96 millions dollars.
Anyway, before I get to explaining how this wisely-crafted
Why? Most (if not all) lotteries have two options for a winner to receive his or her jackpot:
- annual installments, or
- a one-time lump sum.
With the lump sum, you actually receive less money. The lottery systems will usually take a cut from the jackpot and leave you with what they call a "cash value" of the winnings (generally around 75% of the jackpot's original worth). Taking today's $96 million dollar prize into account, that's around $72.3 million. From there, taxes will deduct even more than the taxes you'd get from the annual installments, leaving you with a fraction of the original jackpot. I estimated that this higher tax (combined with the lottery program's cut) would leave the winner at roughly 40%. When used to calculate today's jackpot, that would leave the lucky person at $38.4 million.
If it were me, I'd choose the lump sum. Yes, I'm fully aware that you lose out on a lot more of the winnings than the installments, but I have my reasons.
- I live in the present.
I'm horrible when it comes to short-term planning, and even morbidly worse when it comes to long-term planning. Honestly, I'd probably have better luck planning things with $38 million dollars right now than wondering what I'd do with $3.69 million every bloody year. - I'm bloody impatient/stingy when it comes to financial matters. (At least when I pay attention.)
No joke. After a few hiccups in the past, let's just say I've learned my lesson. I'm not willing to place myself in another situation that leaves me in the financial equivalent of "arterial blood red." The lump sum would allow me to get out of the red and invest in a manner that would keep me out forever. The installments would just encourage me to spend, spend, spend before I realize I dug my own monetary grave - all because "I'll get another installment next year." - It's still a LOT of money.
Big whoop on not having all that moolah. I still won; I'm still rich; I still have a plan. That alone would make me happy no matter how much I won. - I cannot enact my lottery winning plan with the installments.
While bigger is not always better, it's nice to see a bigger impact. Plus, I'm only planning on going through this plan once, so I'd much rather perform it with a bigger amount of cash. After viewing my plan, this point will probably make more sense to you. - Better now than never.
Alluding back to Reason #1, there's one big reason (and one of my primary arguments on this reason) why I'd have this $38 million right now rather than wait 26 years for $96 million. Whenever I encounter someone who'd prefer the installments, I simply ask them this simple question: "What if you got hit by a bus tomorrow after you won?" Generally, those who get hit by buses... well, die. Highly likely is the fact that the now-deceased winner has yet to alter/create their will to explain what they'd do with the winnings should they pass on, which means the state repossesses the money and it no longer gets to go everywhere. While that's a theory, there is one more thing to this: I'd be dying with $38 million on my worth with the lump sum as compared to $3.69 million - an impressive 8 figures for the former, a crappy 7 for the latter. When the news reports on my death, I would get to be called a multi-millionare with the former figure, while they'd probably hesitate with the latter. (Yes: even in death, I'll still be famous. *devious grin*)
So, how does this epic plan work? Well, here it is - maybe you'll get inspired by my way of thinking and come up with a plan for yourself should you suddenly wind up with a large sum of cash in your hands. Keep in mind that this can be used for any amount rather than the example I used.
What The White Knight Would Do with His Lump Sum from the California Lottery
(Winnings Used in Computations: $38,000,000)
- 10%: Immediately Blown Off on... Well, Just About Anything
($3,800,000)
Oh, yeaaaaaah. $3.8 mil' is a lot to toy with. Things I'm going to probably blow this off on include (but are not limited to):
- an after-market-modded BMW
a $450,000 crack party- a party with a bunch of friends somewhere
- cosplay outfits and the materials to create them
- a kiddie pool filled to the brim with $1 bills
- vintage World War II weaponry (or contemporary-made working replicas)
- enough vuvuzelas to arm all my friends with one
- 10%: Bill/Debt Payoffs; Checking Account
($3,800,000)
This is an important matter. I get all my bills and debts paid off and leave the rest in my checking account. The remainder will be used for my day-to-day expenses from then on out, being used as if I didn't win at all and that was all the money I had left in my name. Responsible and insightful... which is perfect for planning ahead in life. Clever, ain't it?
- 10%: Used in "Future Investments"; Secondary Checking Account
($3,800,000)
Now, since I've had my fun with the blown-off cash, it's time to be mindful of the future and invest in mine. Things this will be used for include (but again, are not limited to):
- an education to get at least a Bachelor's degree in something of my choice
- an education to get a second Bachelor's degree in something else of my choice
(Yeah. I have this crazy idea to double-major in something. Money just makes it possible. *shrugs*) - a house here in California
(for those that don't know, decent houses in my neck of the woods are around $450,000-$600,000) - routine tune-ups for my vehicles
- insurance
- 10%: Donations to Various Charities
($3,800,000)
I'm not that greedy. Plus, if anything, I'll be choosing what charities get it. It all depends on how generous I'm feeling at the time. But mark my words: needy people will be getting this.
And people say that I'm heartless. And I say that I'm heartless. =3
- 10%: Gifts to Friends
($3,800,000)
When I explain my plan to my friends, their ears perk up at the mention of this part. What exactly do I mean by this?
Well, throughout our lives we've run into many people who we've called our friends. Over the years they come and go, but some hold special places in our hearts and minds for various reasons. Maybe they had your back in a bar fight and got knocked unconscious when a chair meant for you hit their head instead. Maybe they were willing to financially help you out when nobody else would. Maybe they kept fixing up your car free of charge, even though you're sure they've used thousands of dollars and man-hours when they could've been doing something else. Hell, maybe you've been friends with them for a long time and you're the kind of person who just likes giving them random gifts. Regardless of whatever it is, they've made an impact in your lives and made you happier in some aspect.
This is a bit of a "thank you" to those who've done that. I have a pretty impressionable sense of honor flowing in my blood, and I'm one of those people who feels like I owe a debt to the ones who've been friends with me and done things for me most others would not have done. While they've told me that it's nothing, I don't feel that way - not paying the favor back somehow just feels dishonorable.
Of course, who gets this money, and how much exactly do they get? That's entirely dependent on me, and I'm not sharing that information with anyone except the people who've I already marked to receive this money. Kindness begets kindness, and altruistic kindness deserves the highest amount of kindness possible.
Just be careful - I'm usually good on determining if you're just being kind to shut me up and/or gain something back. I know that every act of kindness, no matter how noble, usually has some kind of gain for the person committing said act, but only a few people perform these kind acts for selfish profit.
- 50%: Savings Accounts and Miscellaneous Plans
($19,000,000)
The remaining 50% will "disappear" and they'll just be there, collecting worth and accessed when necessary. The best way to save money, from what I observed: act as if it's non-existent.
Well, if that list inspired you to figure, then awesome - I've made an impact on you somehow. I'll see y'all tomorrow with another entry, so until that occurs: be awesome!
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