What's the safest way to invest huge lottery win?

[eljefino]

Originally Posted By: bdcardinal


I have always wanted to own car dealers. That way I could have a business that had benefits and would have something to do all day. Preferably Ford dealers, but I would consider the other big 3 or some German, maybe British makes. This would also allow me to have my own realm which I could run with my usual obsessive compulsive micromanaging nature in a dictatorial but yet somewhat kind leadership style.


+1, this is also a somewhat popular option for actors and pro athletes. (Vanilla Ice owns apartment buildings in Florida!)

I know my work has been up for sale/sold a couple times in my tenure there. But I wouldn't buy that operation! All my effort wouldn't fix the industry's structural problems.

But it's easy to find and buy a floundering car dealer. Lots of dead wood one can clean out. You don't have to tell anyone you're rich; get a job as a salesman/ clerk/ mechanic before you buy the place so you can get to know the people and politics.

Then when you get the keys, you can offer employment to the cream of the crop and right the ship. Easier than firing someone later.

You could also find some middle weight industry like a shoe factory in a small town somewhere and effectively rule the town. Go on rambling speeches over the company loudspeaker like Monty Burns.

 

[Vikas]

I have a feeling that Patman is actually holding a real winning ticket right now. Who else would be so worried about before hand on what to do after winning a lottery ticket?

Come clean Patman!!!

- Vikas

 

[GROUCHO MARX]

Originally Posted By: Pablo
Dude.

$20Meg?





Start there. This isn't about a job, a business, an investment, a way to get rich right away.....because I can tell you from my life experience the most money I made is with stuff I KNOW about.


Pablo, did you not see my post about spending it on booze and women? Booze always first as it can't fleece you like a woman. This is investing in what I know and Patman should get to know.

Invest first in a new phone number.

 

[dwendt44]

I'd be careful about giving any money to an insurance company.

Some of their 'investment' products are the worst available.

 

[PandaBear]

If you have 20M you can take on a lot of risk to make even more.

You probably only need to preserve 5M in ultra safe stuff that guarantee your living expense, then the remaining 15M can be in high risk high reward investment that you have an advantage on (knowledge of a particular field or industry, etc).

 

[Drew99GT]

Considering how much money I make now and the frugal lifestyle I enjoy, I could live til I was probably 10,000 years old on just 20 million in cash without investing a dime of it.

Seriously; you could live quite handsomely with 20 mill in cash and not invest ANY of it.

 

[morris]

heres my idea. THE FIRST thing to do is go to the other side of town rent a apartment under a different name. open 2 or 3 saving accounts at a reg bank. then open 1-2 accounts at an investment firms like edward jones.

 

[Hallmark]

Originally Posted By: Patman
Originally Posted By: Hallmark
Originally Posted By: Patman
Note I said GUARANTEED investments...


With that caveat, you have absolutely eliminated any reply except this one.

Thread closed.


But there are guaranteed investments out there, like high interest savings accounts, bonds, GICs, etc.


High interest savings accounts? $20,000,000 would require 200 accounts of $100,000 each at CDIC insured banks at interest rates that likely wouldn't keep pace with inflation. What an accounting/tax liability nightmare.

Bonds? Where on this planet are there bonds issued by any entity that GUARANTEES against calls, default, and duration/interest rate risks?

GICs? Not GUARANTEED. The principal is at risk if the bank defaults.

 

[dwendt44]

Don't know about Canada's lottery, but here in the U.S. you only get about 45%-50% of the 'cash' option after taxes.

The 28/30 year payout would help that a bunch, but you are still at the top rate for taxes. You not only get the whole jackpot but it's spread out over time and the taxes each of those years has offsetting exemptions and deductions, etc.., that result in more favorable results for you.

Taxes are figured on/at 'single zero', IIRC. So you may get a refund at years end either way.

 

[Hallmark]

Originally Posted By: Patman
I've been playing the lottery here every week since I was 16...


If you had won before reaching the age of 18, you would have encountered a great disappointment. There's no gambling payouts to any minor in ON or any of the other provinces.

 

[Patman]

Originally Posted By: dwendt44
First, take the yearly payout of you have that option.



Our lotteries don't work that way here, when you win the jackpot of $20 million, that's exactly what you get, a check in the amount of $20 million the very same day you go into the lottery office with your winning ticket. We pay no taxes on our winnings, and they don't try to divide the jackpot up into 25 annual payments either.

 

[Patman]

Originally Posted By: Vikas
I have a feeling that Patman is actually holding a real winning ticket right now. Who else would be so worried about before hand on what to do after winning a lottery ticket?

Come clean Patman!!!



Nope, I only wish! I figured it's better to ask now and then I'll be prepared ahead of time!

I only got two numbers on tonight's draw, but if nobody won tonight then next week it goes up to $30 million! Even better!

 

[Patman]

Originally Posted By: Drew99GT
Considering how much money I make now and the frugal lifestyle I enjoy, I could live til I was probably 10,000 years old on just 20 million in cash without investing a dime of it.

Seriously; you could live quite handsomely with 20 mill in cash and not invest ANY of it.


True, but it would be better if I could just live off the interest and then be able to pass on that money to my son when I'm 6 feet under (then he hopefully wouldn't waste it all and could in turn pass it on to his kids!)

 

[Patman]

Originally Posted By: Hallmark


If you had won before reaching the age of 18, you would have encountered a great disappointment. There's no gambling payouts to any minor in ON or any of the other provinces.


I actually did win some money before I turned 18, and just had my parents claim the prizes (I won $100 in the old Wintario lottery, and $80 on 649) I actually do have very good luck when it comes to winning stuff, last year I won just under $7000 in cash in a few different contests I entered online.

 

[crinkles]

I would ... buy a small farm in a special place for us, a good comfortable vehicle, and a good truck/ute. run a few cows, chickens, and veggie patch. Build a small open plan cottage, with wood fireplace.



Say I have $18m left after that spendathon as a conservative estimate. then invest the restas follows
$10m in guaranteed deposits paying interest (can do pretty well in Australia)
$5m in a bond fund
$3m in index mutual funds.

Who cares if you lost the $8m? And more likely than not you'd at least get dividends even if the capital fell.

 

[Mr Nice]

Off Topic:

Has any BITOG members have a sit down talk with their parent(s) and discuss how their assets/property/money/investments will be divided upon their inevitable death ?

Its best to have this talk and not rely on a will to prevent any trouble in the family.

Sometimes an inheritance is like almost winning the lottery.

 

[Kestas]

Originally Posted By: Pete591
Originally Posted By: hattaresguy
Problem is most people don't know how to handle it.

First thing to do would be to disappear for 6 months because all your "friends" and "family" will be looking for money. Let them know you are not a bank and they can go pound sand.

Next would come all the investment "advisers" trying to be your friends.

It can be done but the mentality is so different that you would essentially have to learn overnight, that's why most lotto winners are broke in a few years.

First thing would be to seek out a good investment adviser, with the help of someone who has a lot of money. For the time being your probably better off putting most of it in T bills and sitting until you know what to do with it.

Oh and no you cannot run out and buy a new car and house, save that for latter. Pay yourself a salary, say $300k a year and that's all you get for awhile.

On the plus side $20m is a decent chunk, you should be able to get a solid 10%-15% ROI on that once you know what your doing.

My brother knew a guy who won the lotto 25 years ago when 4 million was a lot.

-Everybody knew his business. Phone never stopped ringing. Everybody wanted his money because they felt "entitlement".

-Then he went on a spending spree. $200,000 for a Cigarette boat and the lifestyle. Untold cars and too much for a home. Lost the rest in bad investments. Now in significant debt.

Winning the lottery is instant fame. Look what happens to movie stars who can't handle fame and fortune.

A guy like Warren Buffett who is a multi-billionaire drives a 1970 Lincoln and lives in a $60,000 home he bought in the 1960's. He does not buy a lot of "new stuff" because he said they cause him problems. He likes to dine out and has lots of friends and he selects his charities well. He does not buy friends and nobody suckers him. Could "we" do this?

If it were me and I won 300 million I think my second wish would be to join the Federal Witness Protection Program for me and my family. The world is too transparent now with the internet.

These are probably the two most sober posts in this thread.

Oilbabe plays the lottery. I queried her about what she would do with the winnings and how she would handle it. From talking with her I understood she would be one of those saps who can't say no to family and friends, and end up in the poor house after it was all over.

 

[hattaresguy]

Originally Posted By: Patman
Originally Posted By: hattaresguy
Oh and no you cannot run out and buy a new car and house, save that for later.

Given my current living situation, I would want to buy a house IMMEDIATELY! After splitting with my wife last year I've been renting a townhouse with my father, and it's not the lifestyle I want at the age of 41, I want to be out on my own ASAP and so if I was sitting on $20 million there is no way I wouldn't buy my own house right away!

Well you can and should for the tax write off if your renting. But not a $5m or even a $1m house.

Take the $300k you would be paying yourself with, figure out what you can afford well within that and purchase it.

A few years down the road when the money is smartly invested and generating a good return you can take some of the profits and purchase a more extravagant home if you wish.

That's how to do it. But hardly any lotto winners do.

Problem is most lotto winners think like poor people:
Money is something you earn, or in this case they win, than they spend it, and repeat.

A rich person would earn, reinvest, spend part of the return on investment.

That's why lotto winners are broke in 5 years, and wealthy people tend to stay wealthy.

 

[hattaresguy]

Originally Posted By: morris
heres my idea. THE FIRST thing to do is go to the other side of town rent a apartment under a different name. open 2 or 3 saving accounts at a reg bank. then open 1-2 accounts at an investment firms like edward jones.


Nah its easy to operate and if your name isn't in the paper even totally hide the fact that you won. All you need to do is put the money in a trust and don't put your name on the trust. Than use the trust to buy and sell stuff and pay you. People with assets never have anything in their names, its all tied up in companies or trusts.

Even your house you could put it in an LLC with other properties and have the mailing address be a PO box or your attorney's office or whatever. That way even if someone tries to look up your address in the city property records they won't find it.

If you come into that kind of money you want to get everything out of your name.

You don't want to put that kind of money in a regular bank in your name, the bank will come to you and want to invest it and that can be a bad thing.

 

[tonycarguy]

It's not just a matter of figuring out where to safely park your money, but it's HOW to. You see, investing $100k is different ballgame than investing $10 million. For instance, FDIC insurance only covers $250k so you wouldn't just stroll down to a regular bank to open a $10mm CD. There are safe ways to park $10 million in cash, such as CDars, but they are not things that most people would know about offhand. You would have to do research or hire a financial advisor who specializes in ultra high networth clients