!! I am NOT the winner of the Powerball! It just got me thinking.. !!
Say YOU did win the $50 mill, how would you go about safely securing your money?
Given that banks can only guarantee $900k (total BS), what would you do with it? (Assuming a long term plan of living off the interest / dividends)
Would you invest behind a trust? Would you buy bullion and stash it under your bed? Would you buy up all the units in a new building?
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Mother's day is tomorrow fellas
THE comment for everyone seeking financial advice on this site.
Well can almost be used for every opening question on this forum :)
I thought if banks can only guarantee 900k, then put into 50mill/900k banks?
the problem is if you win 2million you wont know what to do so you waste it.
Reality is that could be better then advice from financial advisors etc when they realise you have 50M..
The Ozbargain way
i would secure it tightly so it does not blow away when its windy
i would place all the cash in my bath tub and use https://www.ozbargain.com.au/node/306770 to lock others out the bathroom
I'd put it all on black…
Once its on black, you'll never get it back.
Okay red then.
Put half on each :)
Based on the perhaps safe assumption that Sydney is not a property bubble, invest in Sydney houses in good school catchments.
Then in a decade or two, repeat.
Nah get it all out in cash and put it under my mattress
Just get rid off the mattress completely and sleep directly on the cash as a mattress?
so Draxxx sought financial advice after winning powerball jackpot last night "haven't seen draw at this stage"
Let me just work out my commission for providing consultation services and advice lol
They hold the majority of money and pay you the time value of $50 million over a balance of x years
Bikies
I'd buy Eneloops… lots of Eneloops.
Endlessloops.
but seriously if you did or it was one of your family or friends all the best to you all.
Warren Buffet always said 70 / 30 bonds / shares i think
he seemed to get it right
This is not a Buffett teaching at all. Buffett and Ben Graham looked at returns on bonds to determine the margin of safety they required in determining the price of shares they would acquire. He never advocated fixed asset holdings like that.
Wtf no he didn't?
sorry he was talking about heading to retirement
WB Quote:
When you get closer to retirement, that’s when we would suggest moving to something more like a 70/30 split, shifting down into a 50/50 model portfolio well into retirement.
sorry i had the bonds shares the wrong way but his quote was his quote not mine
i also said "i think" happy to be corrected
Apparently they want to open a restaurant…where disadvantaged people don't pay. Money will be gone within a few years if that's true/actually happens…
where disadvantaged people don't pay.
I have the disadvantage of not having 50 million dollars.
I'm sure we'll here about it on ozbargain first
would be smarter to have a restaurant where the profits go towards helping the homeless etc (ie a total non profit)
He said he's going to open a restaurant and share it all with his family & friends.
All pretty bad ideas if you ask me. Hence my question.
Indeed, he'll probably be dead by the end of the year.
He will probably hear from long lost relatives living in Timbuktu then!
Winning the lotto can be very bad for you. Case in point:
I would still risk it though.
Yikes! I guess we all believe we can do better, but I guess practically all of us won't get to test that.
That's it. I guess these people let it get to them. My understanding is that most lottery agencies offer
financial advice and therapy/workshops to cope with this change. I was kind of hoping to see serious responses.
Obviously if I won I'd seek professional financial assistance. But in the end you still decide what to do with it.
And while shares are the most likely investment, it's hardly bullet proof. One recession and you're back to scratch.
The investment side is tractable, even if you invest it in a stable option you will still have more than enough to last your life. The biggest problems will be with family, relatives, friends and "friends".
Personally if I won I'd use the money to live better, but I suspect I will still not be able to tolerate waste, e.g. I wouldn't hail a taxi to go around the block, or pay full price when I can get a discount. The bargainer in me dies hard.
I'd also give away part of it to my favoured causes. There's only so much you can do to please yourself, but there are limitless ways to help others.
@Draxxx:
^ This. Tell no one. Heck you could even go on working to keep the illusion going. When you go on holidays, fly 1st class. No one needs to know except the missus & you.
@Youfah Mizzum: I actually thought if I won I might not even tell the missus, or at least severely under exaggerate the size of the win. I know I am far better at being frugal and saving for a rainy day then she is, a few safe investments to ensure should everything else go tits up we have a sizable backup to live comfortably on.
@Draxxx: Yeah likewise, but I'll still visit OzBargain and tell jv because jv wouldn't believe me anyway.
One word, Murica
All these hard luck stories have in common that they take place in the US. In almost all states in the US a winner cannot remain anonymous, laws state they must come forward publically.
I'm sure there are a few examples of Australian lotto winner going bad, most likely those than came forward and had their photo taken with a giant cheque.
The biggest lesson is stay anonymous. If you have a job (unlike this fellow), keep quiet a few weeks, then quit pretending you have another job, maybe tell relatives it is work from home or freelance as you don't go into an office every day. Spend your money slowly and wisely. Tell everyone your new "job" requires travel if you want to go overseas a lot. Give up social media. Keep quiet, live your life well, donate to charity generously.
This guy from Western Sydney has at least not talked much to the media, but its going to be hard, everyone that knows an unemployed male in their 30s is going to be looking out for someone suddenly splashing cash about.
this is true but in the end of the day it is your money and you dont have to give a cent to anyone if it was me i;d keep quite but if everyone knew i'd only give a bit of money to immediate family.
I'd certainly give nothing to 'friends' i think the key is to take a long holiday so people forget about you get rid of facebook and that shit you dont need to show off because that is what invites the leeches.
i never understood the whole i gave money to my mates BS sure you might shout a big night out for drinks to throw a party but that would be were the buck would stop for me. If wanted to ride in my new lambo im happy for you to hop in but there isnt a chance in hell im buying you one just because im rich.
You wouldn't look after your mates if you had 50 mill? That's rough… and a party to rub it in?
I'd certainly look after mates that I've had since childhood. Maybe a few 100k or buying a house or setting them up with a business to run or something.
You mean everyone who wins the lottery is going to die?! Oh no!
• Broden: $50 million. 2017. Eneloop Land. As of 2017: Filed for bankruptcy after stocking up on Eneloops.
This is a extremely small list though. You have to compare it to every single Lotto winner over $1 million and then get a percentage of those actually having a bad outcome. Like srsly how does winning the lotto really have a direct correlation to committing suicide, filing for bankruptcy, crashing a car. The only ones that "might" have some sort of correlation would be getting targeted for winning the lotto and getting sued getting a share of the Pot. All the other bad endings are basically due to people doing stupid things regardless whether then won the Lotto or not.
http://psycnet.apa.org/journals/psp/36/8/917/
It turns out that winning the lottery makes you happy… for a while, then you get adapt to it and revert to roughly your baseline happiness.
Funny how most of these are all Americans.
in america, they give away the name of lottery winners to the public (tv, newspapers, social media)
Risk it and you'll be the next in the list.
There are many cases of people losing it all after a lotto win.
I would say the common theme to those who lost it all is the fact that they were poor (pun intended) with money management before the win. After the win, they are still poor with money management, just they think that they will never run out of money and spend like no tomorrow.
I work in a financial planning practice, one of our clients won the lottery ($1m I believe), the fool didn't advise us of it and instead invested in some high risk scheme with a mate of a mate. One sharemarket downturn later, money is all gone. House also gone too. Poorer than before the win.
He is still a client of ours, but these days we help him with Centrelink and claim hardship on his super.
Where's the statistics from people who won in the 21st century?
these are all americans you listed, which makes sense.
Win and live a life of quiet, inconspicuous generosity. Work part time. Never talk to relatives or friends about money.
I see all of these are from the USA, interesting. To be totally fair though if you did win and the first thing you did was hire a bunch of top notch lawyers and told literally no one (apart from mum/dad/partner and kept it at that), should be alright I would say. As long as you're careful about not being too flashy
In fairness i think Thomas Strongs death had little to do with him winning the lotto and more with him shooting at cops
Note that these are all in the US - where winners are given no anonymity. If I won, I'd just keep quiet about it. Not even telling my wife.
http://images6.fanpop.com/image/photos/36700000/Uncle-Scroog…
https://cdn-images-1.medium.com/max/800/0*fxy30JgcG2pjUtSh.j…
Build a Scrooge McDuck money bin!
I would spread my risk :
1) Deposit a quarter of it in bank TD's. Spread them across every bank in Australia you can find.
2) Put another quarter in government long term bonds.
3) Start buying shares in blue chip companies or unit trusts (use dollar cost averaging to reduce risk).
4) Buy some property.
I will not :
- Start a business because they take up a lot of time and I have more money than time now. And the business will fail if you don't tend to it.
- tell anyone of the win.
- start showing signs of my new wealth.
- stay in Western Sydney.
- start an Entourage.
Just to clarify this further as I cannot edit it now.
My goal would be to create generational wealth. I want to be comfortable, I want my children and their descendants to be comfortable.
Points 1) and 2) above are mainly about keeping the capital safe (of course it cannot guarantee against a complete collapse of the whole financial system). Points 1) and 2) also can generate an income stream but will take time to mature.
Points 3) and 4) should also be 'safe' investments but are much more exposed to market forces. They are higher risk ,but have a potential for higher yield and will produce dividends and rental income.
With the above, the hope is you can maintain a net worth of $50m and just live off the income derived from that capital.
Even if the returns were say 3% (overall) that is still $1.5m pre-tax income.
Thanks @tsunamisurfer. Perhaps I should have been more concise in my question, but creating 'generational wealth'
was kind of what I was trying to define by "securing" your wealth.
maybe invest in gold bullion as well
100% on the do nots list.
I'd add in
Buying all the units in a new building is the worst thing i have ever heard, you are basically paying a huge premium. You are better off buying the land and building yourself.
I'd probably hire an advisor.
But, if I can't get trustworthy advice, I'd do something like this:
Let's say I spend $10M on the house and invest $40M in the fund, which returns 5%pa (or more), that's an annual income of $2M.
I think I can survive on half that ;) so I'd set the fund to re-invest 50% and live the good life, never ever having to do any damn thing I didn't want to.
Invest $40M with 5% interest rate return, omg ! You can do much better than that :)
Right, my 5% was a pessimistic estimate. The fund I mentioned has averaged a touch over 8%pa after fees. You can of course do better, but probably at a higher risk. Sydney houses won't continue growing at 20%pa forever ;)
Invest in properties, turns 40M to 400M in 10 years :)
Sure. Good luck with that over the next 10 years. Maybe if the lottery prize also included a time machine.
I honestly would probably give the bulk of it away. Managing the consequences of $50m would be too much hassle. I'd probably keep $10m, maybe less, and work with that. There's only so much stuff you could own. I'd find more satisfaction knowing all that moola did some good ie. I'd buy needed hospital equipment, give to a no-kill animal shelter, sponsor scholarships, stuff like that.
ETA: On thinking this through more, I'd definitely want a little beach house.
tsunamisurfer has the idea right.
Aside from the obvious, (pay off the mortgage, get a decent but not luxury car, have a holiday for a few weeks). Then -
Spread the risk on non-risky (well, comparitively non risky) investments.
I'd personally go for a few beachside properties or near-to-CBD as they always seem to keep pace with overall property rises.
Take out a few managed investment funds, maybe in a wrap portfolio allowing changing funds a few times a year.
I'd also massively up my contributions to worthy charities. They'd be tax deductions because of the next point…
Keep working to keep the brain occupied & the illusion of normality.
DONT TELL ANYONE, aside from wife. Not even the kids. They might blab.
"beachside properties"
…Global Warming
Buy a boat too, simple
I'd go around and build new developments then sell those apartments! :)
I think its very hard to resist the temptation of keeping low profile. But that is very important.
New friends and new enemies will arise. But there are lot of slow yielding but safe investments like gold, bonds, land, Blue chip shares, Deposits and Tax Accountant. Spread the eggs in different baskets.
Opening a business without any experience leads to wastage of money and builds ego.
I was thinking may be continue job for some time before making investments and also way to save money from excess taxes.Build a trust fund for future generations to have stable life on condition that they have good lifestyle or else not eligible for getting benefit from trust else.
on a side note may be will take insurance policy in case of accidental death too?
The wife you think? Better not tell her then… ;D
Nigerian scam prince Draxxx
I think it would be difficult to remain unchanged by such a windfall. With money no object:-
It's only a short step to getting a cleaner coming in, then perhaps a gardener to maintain your new yard, then perhaps a housekeeper to do the washing, and a little cooking, and pick up the kids and run a few errands like groceries. It won't be long until they are buying your clothes and laying them out in the morning for you to put on.
Before you know it you're pretty much an adult toddler, and your kids will grow up with this lifestyle - imagine what they'd be like!
I've heard stories of people winning the lottery and living it up only to go bankrupt later on. I guess they over did it and ended up worse off financially than before the win.
last i checked they dont lump sum these amounts as a payout.
Where does it say that?
I've never heard that and why would they do that?
Tattslotto have a game where you get $20k a month for 20 years, is that what you are thinking about?
many years ago they did lumpsum payouts but someone in their family got kidnapped for ransom so the story goes. so they made a change to incremental payouts so the story goes.
they may have changed it back if thats the case.
You can choose. Either lump sum or spread over x years.
Source: know someone who works at nsw lotteries.
Invest in property.
Some really nice advice here on a reddit thread: https://www.reddit.com/r/AskReddit/comments/24vzgl/you_just_…
Read /u/blakeclass's comments. If I paste it here then it will be a great wall of text. Enjoy
Seems large amount of the downfall is propogated because none of the winners remained anonymous. So if you win a lottery your name has to be released?
In the USA it has to be released in most states. Not in Australia though.
$50 million can buy 625 $80,000 high yield investment vehicles
I would seek advice from strangers on the internet.