S/O of Giving your Old One: If you won the lottery....

[Sophia]

Under $50,000 - Blow it all on stuff.  I figure it's not enough to make a lasting change to my life style - it wouldn't pay my mortgage off or anything.  Instead I'd just be able to get some stuff that I've been saving for: new carpets, new countertops, etc.  Plus we'd take a really nice vacation...

You might reconsider applying it to your mortgage.  You could use excel to see how much say 40K towards your mortgage would save you in total on the loan.  I know you haven't really gotten a windfall, but the if you do, remember to run the numbers. 

[Amanita]

I'd go back to school, take fashion design.
I'd buy my own large place- some of my hobbies eat serious space, so a large condo or house would be a must.
Oh yeah, I would move out of this town- I've always wanted to be an NY'er, and with that kind of money I could afford it.

I'd travel more- there's some places I really want to visit, Dubai topping the list.

And lest anyone think I'm a selfish thing, I'd help my family out- give my sister something to help pay off student loans and have some left over afterward, and set up a trust fund for a cousin of mine who has special needs.

[HoneyBee42]

Post taxes:

50k -- retire my debts and start on some of the major projects that need doing around the house (it's my grandparents' house, so I'm staying put, but it's pre-WWII and needs quite a bit of work)

any amount up to 2m--same as above + setting up some funds for the children's college.  I'd probably get all the major projects accomplished.

over 2m--as above + starting my own business (sans debt) + investments

The food bank in the county would get a proportional amount based on how much the winnings were, as would my church.

[CrochetFanatic]

Huge Amount:  Move out of my parents' house, pay off what needs to be paid off, share some with family, and help out a couple friends who aren't doing too well right now.  Probably have my teeth bonded.  Then I would bank the rest and withdraw from society.  Someone once mentioned moving away and changing their name if they ever won, and I would seriously be considering that.  I have a few family members who aren't great with money, and who would either spend it all and come back for more, or complain that what they're given isn't enough.  It's probably best that I don't win! 

[atirial]

There are a few charities and local causes I support who would get a share. Otherwise any amount under £1m - pay off the house, do some much needed DIY projects, invest the rest for income, and keep going as we currently are. Larger amounts? That's trickier. For the really large amounts, it's going to change your lifestyle no mater how much you don't want it to.

In any case, the relatives wouldn't find out if I had anything to do with it. Setting up trust funds for a regular income/care costs for older members is one thing, but certain people would blow any funds they were given almost instantly.

[Snooks]

We got to play this game this morning during the approximately three minutes it took DH to log into his lottery account after he got the email to say there was "exciting news about his ticket".  So what are we doing with our winnings?  Buying a ticket for the next draw because that's pretty much all our winnings covered!

[Winterlight]

And -- as was once said in a commercial -- I'd go to Paris and take only my wallet.

Substitute NYC for Paris and I'm there. Actually, I'd do both!

[magicdomino]

And I'd buy a monkey.

"Haven't you always wanted a monkey?"  (I'm assuming you are quoting Bare Naked Ladies.    )

7. Hire a nanny/housekeeper. I like a lot of housework, but I hate dusting, scrubbing tubs, and a lot of the other little jobs that are just tedious (cleaning baseboards, for example).

This, this, this!  I'll skimp on getting the basement gutted and refinished if I have to, but I'm getting someone in to sandblast this place.

[chigrrl1]

I love the idea of lavishly tipping waitstaff if one had the means to do so.  I think that's such a nice immediate way to make a difference in someone's day.

[MissRose]

I would first of all pay off my credit card and car first.  Then I would buy a modest size home as I do not need a huge mansion but something similar in size to my parents' home would be sufficient (1.5 acres and a 1500 square foot 1 story home). I would of course want to do some traveling to places I've dreamt of like Rome, Australia, and Israel.

I would ensure some of my winnings were invested properly so I could live comfortably.  I would also make a few charitable contributions.

If the sum was very substantial, I would also set aside some money in a trust for my nephew and niece for college.  If they did not choose to attend college, then they could get a small amount monthly so they could not blow the entire sum at once and only after they turned 21 as long as they were either working full time or in the military.

[Virg]

There are several things that I always find when playing this game with others.  The first is that many people have the impression that a large fraction of lottery winners go bankrupt, and that's not really accurate.  It does happen, but it's almost never a case of people not knowing where the money went, it's a matter of making bad investments like starting a  business that doesn't work or buying into some scheme.  Virtually everyone who hits it big and then goes bankrupt loses the money in one or a few big losses.

The second is a misunderstanding of debt pattern.  Virtually everyone I know who talks about winning more than $1M says they'd pay off their mortgage, but most people I know pay lower than average portfolio rate for their mortgage so they'd be better off setting up a fund to pay down the mortgage as normal and investing their winnings.  Because of the first paragraph and stuff like this, I tell everyone that the first step to winning a big pile of money is to figure out which financial professional you'd talk to right after you hang up with the lottery commission.

The third is that once you get over a million dollars, most people lose perspective.  There are many I've seen who think that  a million dollars isn't life-changing, and that $5M is on the edge of life-changing, until I point out that investing $1M at a rate of return around four percent (which is way below an average portfolio), you earn a yearly income of $40,000 with absolutely no penetration of capital (meaning your $1M stake never gets smaller if you take out 40K or less).  With this, $5M would net you $200,000 a year.  Since most of us don't earn anywhere near that kind of money, it would be very easy to make changes like a maid or a new house or quitting your job or whatever at that income level.  Getting paid $40,000 a year just for the effort of getting out of bed in the morning would certainly change my life.  The best example I figured out for this is to show that you could live exactly the same life you live right now, but take a first class trip around the world for two weeks every single year without eating up half of the money you'd earn without shrinking your stake, if you had a million dollars.

So, how does that perspective change things?

Virg

[RebeccainGA]

So, how does that perspective change things?

Virg

My only change is that I might not pay off my mortgages immediately - but then, combined, my mortgages and student loans (my only real debts) are under $200K, so the difference may be small enough (savings in interest paid vs. interest earned) that it wouldn't make sense not to just go ahead and do it.

I'm still very risk averse about quitting my job - the extra money would be nice (and being able to take unpaid time if I wanted to take a month's vacation or something) but the health insurance would be priceless - DP is uninsurable at this point thanks to her cancer and related issues, and that won't change for a little while.

[nuit93]

There are several things that I always find when playing this game with others.  The first is that many people have the impression that a large fraction of lottery winners go bankrupt, and that's not really accurate.  It does happen, but it's almost never a case of people not knowing where the money went, it's a matter of making bad investments like starting a  business that doesn't work or buying into some scheme.  Virtually everyone who hits it big and then goes bankrupt loses the money in one or a few big losses.

The second is a misunderstanding of debt pattern.  Virtually everyone I know who talks about winning more than $1M says they'd pay off their mortgage, but most people I know pay lower than average portfolio rate for their mortgage so they'd be better off setting up a fund to pay down the mortgage as normal and investing their winnings.  Because of the first paragraph and stuff like this, I tell everyone that the first step to winning a big pile of money is to figure out which financial professional you'd talk to right after you hang up with the lottery commission.

The third is that once you get over a million dollars, most people lose perspective.  There are many I've seen who think that  a million dollars isn't life-changing, and that $5M is on the edge of life-changing, until I point out that investing $1M at a rate of return around four percent (which is way below an average portfolio), you earn a yearly income of $40,000 with absolutely no penetration of capital (meaning your $1M stake never gets smaller if you take out 40K or less).  With this, $5M would net you $200,000 a year.  Since most of us don't earn anywhere near that kind of money, it would be very easy to make changes like a maid or a new house or quitting your job or whatever at that income level.  Getting paid $40,000 a year just for the effort of getting out of bed in the morning would certainly change my life.  The best example I figured out for this is to show that you could live exactly the same life you live right now, but take a first class trip around the world for two weeks every single year without eating up half of the money you'd earn without shrinking your stake, if you had a million dollars.

So, how does that perspective change things?

Virg

Well, frankly I would have to have at least 10-20 million won before I'd even consider quitting my job. 

Why?

Because one serious illness could wipe out all that money.  I'd keep working for the benefits alone, but having an extra, say, 40k a year would make things a heck of a lot more comfortable.

[Lorelei_Evil]

There are several things that I always find when playing this game with others.  The first is that many people have the impression that a large fraction of lottery winners go bankrupt, and that's not really accurate.  It does happen, but it's almost never a case of people not knowing where the money went, it's a matter of making bad investments like starting a  business that doesn't work or buying into some scheme.  Virtually everyone who hits it big and then goes bankrupt loses the money in one or a few big losses.

The second is a misunderstanding of debt pattern.  Virtually everyone I know who talks about winning more than $1M says they'd pay off their mortgage, but most people I know pay lower than average portfolio rate for their mortgage so they'd be better off setting up a fund to pay down the mortgage as normal and investing their winnings.  Because of the first paragraph and stuff like this, I tell everyone that the first step to winning a big pile of money is to figure out which financial professional you'd talk to right after you hang up with the lottery commission.

The third is that once you get over a million dollars, most people lose perspective.  There are many I've seen who think that  a million dollars isn't life-changing, and that $5M is on the edge of life-changing, until I point out that investing $1M at a rate of return around four percent (which is way below an average portfolio), you earn a yearly income of $40,000 with absolutely no penetration of capital (meaning your $1M stake never gets smaller if you take out 40K or less).  With this, $5M would net you $200,000 a year.  Since most of us don't earn anywhere near that kind of money, it would be very easy to make changes like a maid or a new house or quitting your job or whatever at that income level.  Getting paid $40,000 a year just for the effort of getting out of bed in the morning would certainly change my life.  The best example I figured out for this is to show that you could live exactly the same life you live right now, but take a first class trip around the world for two weeks every single year without eating up half of the money you'd earn without shrinking your stake, if you had a million dollars.

So, how does that perspective change things?

Virg

Just wanted to quote for posterity.  Great post.


I would do something very similar and donate the balance to charities when I croak, just to infuriate my evil relatives. 

[Hmmmmm]

So, how does that perspective change things?

Virg

My only change is that I might not pay off my mortgages immediately - but then, combined, my mortgages and student loans (my only real debts) are under $200K, so the difference may be small enough (savings in interest paid vs. interest earned) that it wouldn't make sense not to just go ahead and do it.

I'm still very risk averse about quitting my job - the extra money would be nice (and being able to take unpaid time if I wanted to take a month's vacation or something) but the health insurance would be priceless - DP is uninsurable at this point thanks to her cancer and related issues, and that won't change for a little while.

It doesn't change much for me because I had said that less than $5mil would allow the kids to go to college debt free, I'd be able to travel more, and retire earlier.  Since I'm about to have 2 in college, $40k won't even cover their annual expenses.