On Winning the Lottery and Not Being Extravagant

The Power Ball Lottery was up to 314 million dollars last Saturday . . . and someone won it. At least only one ticket with the correct numbers had been sold, in Indiana.

So what will the government get? About half? I know that gift tax is now 45%, but this isn't a gift. Well let's just assume the the taxes owed will be 50%, for simplicity's sake. So the lucky winner will get 157 million dollars, if they choose to take it as a lump sum. If they choose the pay-out over 25 years . . . well it gets a little complicated here. It's not straightforward, like dividing the amount won (314 million) by 25 (12.56 million) and getting that amount each year, then paying taxes on it. I'm not exactly sure why it isn't done that way, but I bet it's because the winner, somehow, in some way, is getting screwed. But then, it's not a fair world, is it?

What would you do with 157 million dollars? I know what I would do. I would help out family and a few friends. Nothing extravagant, but enough to make their lives comfortable in their old age. The younger ones would have to all get college degrees and work for a while before getting enough from me to make their lives "comfortable." Then I would pick certain charitable organizations and help them out. But I would do my research as to which such charitable organizations actually do the most good for the money.

As for me, I would retire to a few acres in the country. Again, nothing extravagant. I grew up as a simple farm boy. I'm self-educated, but far from stupid. I'm well past the "party-till-you-drop" phase of my life and I've never believed in conspicuous consumption. And I am more concerned about quality of life, not quantity of things. Oh, don't get me wrong. I would travel, some. But mostly I'm a homebody. I would have a vegetable garden, some chickens, a couple of pigs maybe, and a milk cow. And I would set my little farm up to be energy independent, using solar and wind power to run everything . . . and I would have all the latest electronic appliances that I wanted. I would have all that and be financially secure.

Now, I'm sure that some of you out there would think about making some types of investments, to make sure the money lasts. But I turned 60 this year and even if I only got basic savings account interest, about 3.5%/annum, I would still be making 10,990,000 dollars a year. I think I could accomplish all that I wanted on that pittance. I'm also sure that I could get a higher interest rate without having to worry about doing any fancy investing. And that would leave the principle intact. If I ever felt it was necessary, I could always dip into that principle without worry . . . if I wasn't extravagant.

I live in California and we don't have Power Ball, but we do have Mega Millions and Super Lotto. As of this writing, the jackpots were 250 million and 86 million, respectively, with the cash values being 146.2 million and 47.6 million, also respectively. With the smaller jackpot, should I be so lucky to win it, I would probably have to adjust how I use it, but I think I could still accomplish most of what I would like to do for my family, friends, and charities, and myself and still have a sizable amount of money left over. The idea, of course, is not to be extravagant.

So, each Tuesday and Saturday I buy my "one and one" quick pick tickets for Mega Millions and Super Lotto, and hope. After all, there was only one winning ticket sold for the recent 314 million dollar Power Ball Lottery jackpot, and the winning numbers didn't look all that different from many of the ones I get with my quick picks. Who knows? It could happen. All I know is that, eventually, someone wins the jackpot, and you can't win if you don't play. That's kind of like life. You can't win if you don't play . . . and it pays not to be extravagant . . . well, at least not too much for too long.