You can imagine spending $11 million a year? Or even $1 million? I mean, I can imagine some one-off large purchases like a house, but I can't see my annual outlay otherwise going much more than $250-500k depending on number of kids.
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You can imagine spending $11 million a year? Or even $1 million? I mean, I can imagine some one-off large purchases like a house, but I can't see my annual outlay otherwise going much more than $250-500k depending on number of kids.
If could get a 50% uplift on my annual salary I'd feel quite rich. In fact since most of my salary goes on fixed costs like mortgage etc a much smaller than that uplift would dramatically increase my disposable income.
I don't usually buy lottery tickets, but I did this time...after it reached the $1.5 BILLION mark. Why not? When one ticket is the price of a gallon of gas, or a few tickets cost the same as a Starbucks coffee, it's almost stupid NOT to give it a go.
I think the worrisome part is that "poor" or low-income people are the ones building the lottery pot, gambling part of their meager income on a regular basis, for the hope of "winning" a better life. It's different for horse racing, or car racing, or cards -- where the owners/players have to fork out a lot of their own money first, and there's a degree of skill involved before people can buy $2 tickets to get a piece of the pie.
It is literally and mathematically stupid to give it a go. The higher the amount, the lower your odds.
Unless the payout exceeds the amount paid in then it was not stupid to "NOT give it a go".
With a rollover that's theoretically possible but I doubt it was relevant, especially after taxes are considered.
On the acuity vs lump sum
It would depend how it is taxed, if taking the lump sum would drive the income for the year in to some ridiculous tax bracket then yeah annuity is the way to go. If this is not the case,taking the lump sum is a better decision. For instance taking a lump payment of 900,000,000 and investing it in to 30 year government bonds at 2.8% annual interest (I believe that is what you can get on the US 30 year old bonds today) you will generate overall better return. Further you retain flexibility as you are able to sell the bonds should you need to do so. The only reason to take the annuity in most cases is if you don't trust yourself with your money.
That only works if you don't spend the money.
Most analyses seem to have concluded that it's probably better (given currently valid assumptions about taxation etc) to take the lump sum and invest it, even if you give yourself a fairly generous allowance.
"You can imagine spending $11 million a year? Or even $1 million? I mean, I can imagine some one-off large purchases like a house, but I can't see my annual outlay otherwise going much more than $250-500k depending on number of kids. "
This part is really easy, when you have this sort of funds at your disposal you will try the things you would not think of trying before like wine at 20k a bottle and hell you might like it. Your wife will probably want clothes and likely new ones every year before you know it you'll have accounts with major modeling houses like Hermes for several million. Renting a top class chalet for a few weeks in Megeve will cost a 100k in top season, A trip to Dubai top hotel will set you back even more. Sure maybe you will not change your life style and continue to live as you do now, there are people like that. But I don't really see why if you can afford it.
Really don't get you, Asmodian. I have zero interest in most of the things you mention, and I doubt my wife would either. We *would* spend more money than usual on housing, and we *would* probably take a nice vacation every 6 months or so. But my definition of a nice vacation is probably on the order of $10-20k for a week. Re: housing we'd spend a lot - probably several million - but we don't need anything beyond that, just enough to have a comfortable home in the neighborhood of our choosing. Any more would just be a waste.
I suspect that we would splurge on some luxuries, of course, and I'd definitely pay people to do some of the annoying work I currently do - e.g. laundry, cleaning. But all of this is at most adding a few hundred thousand dollars a year to our current spending. Beyond that, I'd save/invest the money and give some to charitable causes I support (I'd probably also help out some of our family to eliminate their e.g. mortgages).
Fortunately I have one or two things I'd like to do that would help me spend any amount of money, should I wish to: scholarships and grants and nice trips for students in Bangladesh and the same for struggling families in Sweden esp. immigrants. But, for my own personal use? That's tough. After buying/building properties, setting up funds for descendants and relatives etc and a few champagne-soaked caviar-laden eastern European orgies, my rate of spending would probably decline sharply. Overpaying for wine and clothes wouldn't give me pleasure. Rather, it would annoy and disgust me even more than wiping my ass with $100 bills every day. The ginger doesn't like high fashion and there's only so much she can spend on gardening every year.
What I just can't figure out is whether or not I'd keep working. I know the ginger would probably devote much or all of her time to pro-bono work. I generally love my job too much to think I'd quit or even work much less than I do now.
Yeah, same here. This amount of money is just so insanely high :p I like luxury but not too extravagant, like you say, I'd like a nice house, but what I consider nice and luxurious wouldn't be multimillion dollar houses. Helping out family and some friends, sure, but on these figures even that wouldn't make a dent. Might get more into film production though, that's always fun, and is supposed to earn you back your money :pQuote:
Originally Posted by wiggin
I'm willing to assume that most people say "Oh, I'd just do this and this" but massively underestimate their ability to do that.Quote:
Originally Posted by wiggin
Meanwhile, some of the co-winners of last week's Poverty Hunger Games took their ticket to NY to parade it around talk shows without informing their state lottery commission that they were winners. They also called into work and quit their jobs. Again, with the physical ticket and without declaring themselves to the state gaming commission. :bored:
I'm disappointed by the lack of vision shown by forumites here. :o
There's really only one thing I could do with silly money like this.
1. Hire a team of funds/investment/asset managers and accountants
2. Spend a while investing, developing a massive international portfolio that generates still sillier money over a long-term
3. Add development and project managers to the team once the portfolio is established and mature
4. Travel the world seeking worthwhile causes and development projects to invest time and money in; research programmes, community programmes, scholarship funds, education and poverty alleviation in the poorest regions, disease control and research, future tech.
"Really don't get you, Asmodian. I have zero interest in most of the things you mention, and I doubt my wife would either. We *would* spend more money than usual on housing, and we *would* probably take a nice vacation every 6 months or so. But my definition of a nice vacation is probably on the order of $10-20k for a week. "
Sure you don't and the poor in India will probably say that a nice vacation for them is a few hundred dollars a week. Once you have a billion dollars at your disposal the horizons change ad you start looking at different options available to you. Sure you can have a great vacation for 10k a week,that's about what my new years in Megeve cost me this year, but you can have a better one for 100k, and if you no longer have to worry about money why choose the cheaper option. (assuming of course that the more expensive option is better which is not always the case i will be the first to admit). Its like buying pcs when I was a student I bought a mid range components and built the pc myself, since now I don't have to worry about price of a pc and would rather spend the time on something else I buy from Falcon North west and choose the best components for my needs. This is small scale but the more money you have the more your "interests" expand. Like you say that a house will set you back a few million and that sounds great i would love to be able to afford something like that but if you have a billion wouldn't you look at something worth say 10 or 20 (the houses that cost more are usually too big for my taste but if you have a big family why not). House worth 20 million will mean that you will have 980,000,000,000 at your disposal vs. 997,000,000,000 if you bought one for 3, I don't see a major difference in terms of money left but having looked at some pictures I definitely see the difference in the houses. Most people will at least try some of the more expensive things with that kind of money and chances are they will enjoy at least some of them.
I think you overestimate how much a few hundred million dollars can buy. Your kind of approach eats up most of your (additional) investment returns with wealth management costs, and the overhead on the kind of charity you're suggesting is substantial. Much more cost effective to give money to existing charitable organizations a la Gates or Clinton or whatever you like.Quote:
Originally Posted by Timbuk2
I've always felt that 9 figures is an awkward amount of money to have. $10 million is enough to make sure your family never really has to worry about money. Billions of dollars means you can truly transform the world, either through entrepreneurship, political/social change, or philanthropy. In between, however, is the category of 'more money than I can spend, but not enough to effectively change anything'. Then it makes sense just to give money to organizations that share your priorities.
I think there's a point of diminishing returns with consumption. Most people in the middle class/upper middle class have pretty dramatic improvements in their lives/experiences with increasing income - their marginal dollar buys a lot of extra luxury (in contrast, while the marginal dollar is theoretically even more valuable for the poor, their lives are still pretty shitty even after that extra dollar of consumption, so it doesn't feel like it helps all that much). This is where the person who can buy the large/more comfortable home, or the more comfortable car, or the better electronics, or the nicer airplane tickets - all of these materially change your experience with relatively small additional expenditure.Quote:
Originally Posted by Asmodian
When you get to the very wealthy, though, the additional consumption that can be bought for that marginal dollar are generally not changing your experience all that much, but are rather 'positional goods' - they are valuable because other people don't have them, not because of their intrinsic value. Positional goods are essentially meaningless for me. I see absurd consumption as, well, pointless. Yes, my idea of 'absurd' consumption is has a pretty high threshold - as I suggested, spending $500k a year seems eminently doable to me, even though that's out of reach for all but the richest people on the planet. But there's so much room above that threshold that we're talking about, and I have little interest in it.
You yourself alluded to this - you're not interested in an enormous super-expensive mansion because you simply don't need the space. What's the point of a big empty house when you could live in perfect comfort and luxury for a substantially reduced price? This is my view for most ridiculous consumption. I just don't see the point in spending the money when there are so many better uses to which it could be put - I could become an angel investor, or fund a company of my own, or go into hard core philanthropy. The utility to me of these uses for the money far outweighs the utility from a positional good or the like.
Wait, guys, I got it. Buy Detroit.
Not sure I buy wiggin's explanation of things, since he's the guy waiting for a million dollar house in order to do his own laundry at home. ;)
That sounds like a mischaracterization of the Jewish dream :o