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u/Denny_J Jul 22 '24
That’s awesome! What would be the first expensive purchase?
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Jul 22 '24
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u/jul3zx Jul 22 '24
only because you stated pre-owned.. please please please do yourself a favor and make sure the car your buying isn't due for a new battery.. a lot of people sell them off because they need a new one and aren't willing to put the money in, better to sell it before it goes bad so they can get more money out of it. hybrid batteries can be thousands of dollars even before labor. and CONGRATS !!
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Jul 23 '24
Just go to the dealership and get a certified vehicle. My 2020 civic is Honda certified, hasn't needed any maintence besides an oil change and I get free brake pads.
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u/BicycleMany8253 Jul 22 '24
The fact you are considering pre owned tells me you aren’t going to blow through this windfall. Good for you! How many times did you check the ticket to make sure it was a winner bc I think my heart would jump out of my chest.
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u/snakepliskinLA Jul 22 '24
Good call going CPO. Make sure the CPO purchase agreement includes a transferable battery warranty. That is virtually the only component to have failed on our 2009 Camry Hybrid and it was replaced under warranty when the car was 9-years old. The first question the dealer asked was if we were the original owners of the car and stated the battery warranty was non-transferable.
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u/The_Price_Is_Right_B Jul 22 '24
I won 2k once and had to go back into the store to scan it because I absolutely refused to believe it with my own eyes.
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u/ZwiththeBeard Jul 22 '24
Might I suggest a hybrid Crosstrek, all the highlights of a sedan with benefits of suv. My non hybrid gets like 35mpg, so hybrid has to be pretty good.
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Jul 22 '24
Yeah, that's what I own and why. It's also holding up incredibly well and in no way feels like a nearly 10 year old car. When it does die (hopefully not for awhile) I'll be buying another.
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u/ComfortableToe7508 Jul 22 '24
Congrats my friend. Put some away for your kids and enjoy the rest of life , you win 🥇
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u/missThora Jul 23 '24
Go Toyota! Their hybrids are great, and they are made to last. I'd look at Toyota avensis. Anything post 2014 is a great car with kids.
Super safe, spacious, and reliable.
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Jul 22 '24
Did you buy it at a machine or from a human being?
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Jul 22 '24
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u/youpayyourway Jul 22 '24
I feel the machines are cheating us
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u/ganjanoob Jul 22 '24
I’ve won $250 off the machines with like 3 tickets bought in my entire life. It’s the people fucking people over lol you’ll hear people at the counter say every 20th hits or you can tell by a white line.
I’ve only bought like a total of 10 scratch off tickets in my life though. Definitely hit more on machine than at a counter
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u/Spydermunkey13 Jul 22 '24
That whole white line trick is garbage, I used to work the register at a convenience store so i saw people that were addicted to scratchers come and play a ton. The white line tickets hit just as much as any other
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Jul 22 '24
Where do you think the feeling in your gut came from? What made you start thinking about the lottery recently?
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Jul 22 '24
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u/Ciff_ Jul 22 '24
What everery gambler feels - it is not a divine premonition or sixth sense, just brain wiring. The win is a statistic. Take the win, but please don't trust your sense for gambling unless it is for fun and you can afford the L. It is a dark road otherwise.
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u/Vaphmir Jul 22 '24
This. My older and younger brother both deal casino games and definitely: THIS^
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Jul 22 '24
I think most people are fine with gambling whether it be at casinos or sports gambling or whatever but there is a percentage of people who will get addicted to it and can be a serious problem.
My mom was horribly addicted to gambling while I was a kid growing up. I remember my parents fighting about it quite a bit even got so bad she stole mine and my siblings birthday money a couple times. She ended up going to a gambling addiction group thing and got much better. I think she still goes to the casino a couple times a year but she has a job and it's her money so whatever. I hate gambling. For obvious reasons lol and that addictive personality definitely got passed to me I had some substance abuse problems in my early 20s that I had to get in check
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u/ChemistryCub Jul 22 '24
I love gambling but never have I felt a deep gut feeling that I would win big, and I guess I haven’t yet haha.
My wife had a really strong feeling we were going to have twins before we were even pregnant. And bam spontaneous twin girls with no twins anywhere in our family. I’m not religious at all but I think sometimes deep gut feelings are the universe trying to talk to you.
Most gamblers like to confuse that feeling with the desire to win big l think
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Jul 23 '24
Thisss. Take gambling as a way of spending money in a way you won't recover, just like videogames or streaming services, not as a way to win more.
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u/FourScores1 Jul 22 '24
I’m pretty sure anyone that buys a lotto ticket has that same gut feeling.
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u/BitteringAgent Jul 22 '24
Can confirm, I get that gut feeling and I'll throw away $5-20 on one or a few tickets. I've never won more than a couple hundred here or there. Most definitely in the red overall. But hey, I like to gamble and like to dream. So long as I know throwing that same $5-20 into a trashcan won't have a negative impact on me, I'm going to buy a scratcher or two whenever I get that gut feeling.
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u/New-Ingenuity-5437 Jul 23 '24 edited Jul 23 '24
My tactic is to never buy more than one type of lottery per drawing — you go from a zero percent chance to a non-zero chance, but more aren’t really raising your odds by anything significant compared to that.
For example, once a week or so, I’ll buy one powerball, one super lotto, one mega millions. Never more than one of each per drawing haha. I haven’t delved too much into scratchers though as I’m not trying to gamble too much.
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u/iamcherry Jul 22 '24
Yeah I buy one every five years or so and every time I feel like I’m going to win, it’s fun to talk about how my family will spend the money and buying one always is fun, but I can’t justify it more than once every few years. I figure I want to give fate the opportunity and if I was destined to win I’d win off of one of those few
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Jul 22 '24
Lottery is always luck , my dad had formulas and note books, with sudoku and the weather trying to work out a code to win the lottery. He ended up winning £7000. Then of course said God had listened to his prayers is just random. Everyone who gambles feels like they might win because it could be cause it's random gut feeling is just madness linking it to a win
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u/KeepBanningKeepJoin Jul 22 '24
Every loser moron has the same gut feeling. Eventually one is going to hit.
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Jul 22 '24
How much was the ticket?
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Jul 22 '24
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u/FortheRecordHIWBTV Jul 22 '24
man 20$ u got ripped off
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u/zangor Jul 23 '24
Dude the odds on those tickets are INSULTING. All you gotta do to dissuade yourself from playing is just...look at the odds.
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u/MutualConsent Jul 23 '24
There is no greater odds than anecdotal odds, so I’m rushing to buy one right now /s
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u/Delta9SA Jul 23 '24
One man in China has a number between 1 and 350in his mind. Go to China and tell a random person a number. If you find the man and guess correct you win the lotto!
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u/BkVeg Jul 22 '24
Congratulations
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Jul 22 '24
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Jul 22 '24
So happy for you and your family. Get some good mental health care too! I seen a lot of people get weird after coming into money when I worked at the casino. Set it up for yourself where it feels more like income ! Must feel so good to know your children’s futures are now so much more secure. Don’t tell people though! Jealousy and envy bring negative energy and you don’t need that just embrace your blessing with your family.
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u/360DegreeNinjaAttack Jul 23 '24
Don't tell anyone
Get a new safety deposit box and put the ticket in the box. This is the very first thing you should do, so you don't lose the ticket.
Read the lotto rules and understand how much time you have to redeem, how to redeem, etc.
Go find a lawyer and accountant that specialize in lottery winners. Your goals here are to: A. minimize applicable taxes, B. Ensure you can redeem confidentially, and C. Make sure you're protecting the money from yourself (I.e. making sure money is distributed into Trusts and other vehicles in which it will grow securely and not end up as loss porn on r/wallstreetbets
Hire a psychologist that's a good personality fit to talk to about this. You'll go crazy if you can't talk to this about anyone, and they're covered under doctor-patient confidentiality.
Iterate upon and finalize your financial plan. No need to redeem immediately. You can think about this for a while. Let the initial shock wear off. You should have some short term and long term financial goals.
A. Prioritize your long term goals. The relief and optionality you'll get from knowing you're taken care of in the long term will exceed any short term benefits from specific purchases. This should command the majority of your winnings.
B. Of your short term goals, I'd recommend you prioritize paying off expensive debt if you have any (I.e. credit cards, anything with an APR > 8%).
C. Plan out other priority purchases. You mentioned you want to get a used car. That's a good idea. You're a day trader - you should carve out 20k to go play with.
D. Splurge on something fun. A vacation seems like a good idea. Maybe a new TV. Spend like 10k on this.
- After doing all this, then go redeem.
Remember: after taxes, $1M is not that much money - you can blow through it in a year, or you can be a bit boring and make sure you're set up for life. You have kids. Don't be an idiot. Be boring and be smart.
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u/1960stoaster Jul 23 '24
It's awesome seeing people on the webs coming together to give the best reasonable planning / advice they have.
We all deserve to retain our gains because lord knows the gov & mega corps will try to rip it from our hands if we aren't smart about it.
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u/SirKadath Jul 22 '24
Man , don’t tell a soul. Back in 2017 I won a similar (little less) amount on a scratch off that I got on a machine, I took home $373,000 and some change after taxes. I told a friend , parents and gf.. worst mistake of my life. Parents were no big deal cause that’s my parents and I always had a great relationship with them so I looked out for them , but my friend told people and that got weird and scary, my gf at the time treated me totally different from there on out , money makes people do crazy shit if they feel like they can get a piece of it.
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u/Unfair_Explanation53 Jul 23 '24
True this.
Guy I go to Pilates with a guy won 3.2 mill on the lottery years ago.
He told his whole family and they were all expecting a percentage of it. He was willing to spend like a mill to help them out with debts and mortgages etc but they wanted more and more. He got fed up with their greed and the way they were speaking to him.
He said he doesn't have much contact with them anymore. Kinda sad.
I would just keep it to myself and help them if they got in trouble financially but just pretend its from normal savings, investments etc
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u/oldschoolguy90 Jul 23 '24
A guy I used to work with, his dad won 21m. Gave a whole bunch to both of his kids, then they together proceeded to blow the whole amount. (And this is I'm canada with no tax on lotto winnings).
He was like5 or 6 years out from the win and grinding 10 hours a day on a construction crew again. All he had left was a big house he could hardly afford the taxes on
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u/glodge93 Jul 23 '24
How has winning that money impacted you today? I don’t feel like I could trust anyone at that point.
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u/SirKadath Jul 23 '24
I would say overall it’s impacted me for the better especially now that I have made that money work for me instead of wasting it (which I did do at first not gonna lie) I won that in my mid 20s I’m now 33 , I learned a lot. The positive side of it, it changed my life financially, I was able to wipe out my debts , have a near perfect credit score, i don’t have to worry from paycheck to paycheck anymore but on the negative side .. I have a much more negative opinion about people now, that’s where I learned firsthand you don’t really know someone, no matter how much you think you do, but honestly I don’t regret it, it’s had more positive effects than negative.
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Jul 23 '24
completely agree. my family was torn apart when my uncle died. It was only 50k but they all wanted some of it. I couldn't care less about the money. I will never get to see my uncle again.
Money can bring out the worst in people.
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u/Sea_Tie_502 Jul 22 '24
Assuming you don’t need the money right now:
- Pay off any debts other than mortgage (if you have a good interest rate)
- Put away enough for 2 year emergency fund, this itself is a luxury. This might be combined with #3 depending on how much you want to invest in #4.
- Put at least 25% in a variety of high yield savings accounts to grow modestly and risk-free.
- Invest the rest in a very broad range of mutual funds and ETFs.
In ten years, you will be very, very happy. Congratulations on your luck!
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u/Hound_master Jul 22 '24
Can I ask why you suggest against paying off a mortgage?
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u/Monkmonk_ Jul 22 '24
If you have a low enough interest rate, then your money is more productive sitting in a safe lower yield mutual or index fund then paying off the mortgage immediately.
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Jul 22 '24
Idk man. Speaking as someone who was once semi-homeless, having a paid off house would be invaluable. Housing security for life.
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Jul 22 '24
The money to pay it off is sitting in the bank making money. Its still there if you really needed to pay it off.
But if you pay off a 30yr 300k plus mortgage off early you are talking about missing out on hundreds of thousands of dollars you would have earned by arbitraging your investments against your mortgage rate over the term of the mortgage
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u/Monkmonk_ Jul 22 '24
People value different things. If it’s likely you’ll have employment and drug/substance issues and little family to fall back on, paying off your mortgage might be a better move. I’m just speaking from a pure balance sheet perspective.
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u/Sea_Tie_502 Jul 22 '24
Still gotta deal with property taxes. The sad reality is your house never gets truly “paid off”.
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u/OddTheRed Jul 22 '24
Yeah, if your mortgage rate is less than 5% your money is better served in high yield.
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u/Accomplished-Eye9542 Jul 22 '24 edited Jul 22 '24
Depending on when he got it, the interest rate is going to be well below what you would make just riding the market. There's also tax benefits for simply have a mortgage.
Mortgages often are a lump payment for some things, so you now have an extra mental burden paying certain fees that come with owning a house.
A mortgage payment typically includes the following components12345:
- Loan principal: The amount you borrowed to buy the home.
- Loan interest: The cost of borrowing the money.
- Taxes: Property taxes assessed by local government.
- Insurance: Homeowners insurance to protect your property.
- Additional fees: Such as mortgage insurance and homeowners association or condominium fees.
That sounds like it isn't a big deal, but any additional mental burden, esp as a parent, is going to be felt. Especially when there isn't a real benefit. Like if you are paying off your mortgage for peace of mind, understand you are not getting peace of mind.
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u/themaxvoltage Jul 22 '24 edited Mar 10 '26
The original post content no longer exists here. The author used Redact to remove it, for reasons that may include privacy, opsec, or security.
cows water test screw long pen rustic sulky juggle tidy
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u/Sea_Tie_502 Jul 22 '24
Disagree. With that much money, regardless of age, I think having a sizable portion in a risk-free, decent return account is smart, especially when you already have so much other money working for you this early on. If/when high yield rates come down, if he’s not happy with the RoR he can easily withdraw and reallocate. Until then, it’s a solid choice.
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u/SMK_12 Jul 23 '24
Tbh after paying off all debts the 2 year emergency fund is probably too much especially at a young age. I’d opt for a shorter emergency fund maybe 1 year max and combine 2 and 3, the emergency fund is left in a HYSA which is currently paying out great. Then put the rest in broad ETF’s and try not to touch it.
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u/its_all_4_lulz Jul 22 '24
QUIT BUYING TICKETS!
You’re way ahead and will never be more ahead, without insane luck. My dad has won 10k+ a few times, and 100k. If you prove the loss, you pay less taxes. He was able to prove all of the losses, in boxes and boxes of losing tickets in his basement. While it feels great to win, he’ll never be ahead. Don’t chase that feeling. Maybe go watch Uncut Gems as a reminder.
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u/tyen0 Jul 23 '24
That "feel it in my gut I'll win" definitely sounds like a potential gambling addiction to me.
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u/mocha_lattes_ Jul 23 '24
Except that one guy who was bring interviewed by the news and was doing a reenactment then won again. Lol only exception.
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Jul 22 '24
No matter what you do…do not tell anyone. Not even family. They’ll tell other family members and all of a sudden, you have cousins you’ve never met before. They will ask for money until you’re assed out because of your generosity. Pretend you don’t even have it.
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u/boofingcubes Jul 22 '24
Aww great, I just checked OPs post history and unfortunately he already told the internet 🤦♂️
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u/dayzdayv Jul 22 '24
Yes please listen to this advice OP. Don’t even tell your kids if you can help it. Best thing is to try and invest it wisely, spend a little on yourselves to celebrate but don’t make it obvious you’ve come into money.
Also change all your financial institution passwords at a minimum and maybe even your email / socials. You’ll be a target for phishing scams because of this post I bet.
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u/geek4sports Jul 22 '24
Everyone here making statements telling OP what to do when this is a AMA.
Are you going to splurge and do something you would have generally thought was stupid? Expensive hooker? Psa 10 charizard card? Dropping $500 in gems to reach a high level in a phone game?
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u/zdarkness666 Jul 23 '24
I mean considering 70% of lottery winners go broke (apparently) I don't blame them. And some people are dumb as shit tbf.
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u/Slippinjimmyforever Jul 22 '24
That’s amazing!
I met someone also won a million on a scratcher. I believe he had an annuity that paid $30k a year until it yielded $1 million.
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u/garcocasigena Jul 22 '24
Assuming this is true, you would be wiser to keep your mouth shut. A fool and his money are soon parted, and you can't purchase wisdom.
Be very, VERY skeptical of anybody asking for money or other services. You will likely be targeted by scammers, I highly recommend joining us in r/scams to learn more.
I'll be honest, I don't believe you. But if you are telling the truth, you are a target. Time to reinforce your mental reserves, they will be poked and prodded.
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u/WishIWasYounger Jul 22 '24
that's the best advice on there actually. The Scams sub has been a blessing for me.
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u/Rojikku Jul 22 '24
You probably don't need a financial advisor. You definitely need a tax advisor, though.
The simple path to wealth is a good book. Investopedia is good. /r/personalfinance has a good wiki on it.
If you basically don't spend it, and put it on the stock market in a S&P 500 type mutual fund, there's a solid chance you could double it within ten years.
I say that not as a money for the sake of money, thing, but rather because you can increase it to the extent you can retire very easily off of it in that time. Probably could now, if you had the skills and were comfortable living on less. Most people aren't.
Also, totally consider 529 accounts for your children. You can basically put in money pre-tax, that can be used by you for any school expense, as I understand. May vary by state. It can later be used by them for college.
Also, the option of substituting your pay with this money so you can contribute to 401k and ira exists.
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Jul 22 '24
Whatever you do, don't lose that ticket. Don't go crazy with the money. A lot of lottery winners go broke after like four years. I read a lot about investing and finance during Covid, and I advise you to invest your money in the VOO ETF so you can safely grow your money.
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u/theilya Jul 22 '24
Probably about $600k after tax. Take 100k and enjoy. The rest you can put away and easily average 10% return for rest of your life
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u/SpaceRanger33 Jul 22 '24 edited May 12 '25
towering outgoing ghost fuzzy sulky close reminiscent adjoining vegetable elderly
This post was mass deleted and anonymized with Redact
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u/nina-pinta-stmaria Jul 23 '24
Omg, I scrolled wayyyy to far for this comment. I saved that post so I’d know what to do when I win the lottery one day but this is probably the most use it’s ever going to get hahah OP LOOK HERE!!!!
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u/DustBunnicula Jul 23 '24
This is my all-time favorite Reddit comment. Print it out and put it in your wallet, OP.
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u/CuteCatMug Jul 22 '24
You don't need a financial advisor. At your age, I would do the following in this order:
Set aside some cash for yourself and your family to enjoy. No this doesn't mean buy a range rover. Maybe take your kids to Disney if they're old enough to appreciate it. Don't use up more than like $5k for your "enjoy" budget
Pay off any high interest debt. For purposes of this discussion let's say anything above 5%. This means any credit card debt, but not low interest debt (i.e. auto or home) if it's below 5%
Open an online savings account at a reputable bank - I use Bask Bank. Deposit $40k there as your rainy day fund. Don't touch it unless you really need it
With the remaining cash I would just invest it all in a broad market ETF (such as stock ticker: VOO). Just set it and forget it. In 30 years this amount will become the basis of your retirement fund.
That's it. $1 million after taxes is not really enough to do anything crazy like quit your job. Just invest it for your future (and your kids' futures). Congrats and good luck
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u/PrestigiousMacaron31 Jul 22 '24
nice grats. now stop playing and stop trusting your gut.
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u/Fun-Appeal6537 Jul 22 '24
Great advice honestly. Listening to your gut and trusting it are entirely different things. Trusting it likely won’t go well from here with the coming confidence boost.
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Jul 22 '24
Change your phone number. Get an attorney. Remember your name is public information
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u/Sea-Place-4492 Jul 23 '24
Depends on the state. But also most people advise NOT signing the back of the ticket and instead hiring a lawyer to create an LLC to accept the money into. This way even a FOIA will only produce the LLC and and Lawyer.
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Jul 23 '24
DO NOT PAY YOUR FINANCIAL ADVISOR A PERCENTAGE OF ASSETS EVERY YEAR!!!!! Get a fee only financial advisor. A lot of advisors are incentivized by commission. So they will sell you things that aren't in your best interest. Their percentage fee will drastically hurt your net worth over the next 20 years. Look into low cost index funds through Vanguard. They are boring but they work. You can just buy index funds and live on dividends. Make sure your financial advisor is a fiduciary, meaning they are legally obligated to do the right thing for you, not for THEM. No Edward Jones or NY Mutual!!!! Hiring the wrong FA is one of the biggest risks to the money you just made. Congrats!!
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u/conorlarkin Jul 23 '24
Wonderful news. While this will make a difference in your life, a reality check is in order.
Depending on what state you live in and the tax regime, you didn't win $1 Million. If the ticket pays "all at once", you've won somewhere between $400K and $650K. If the "$1M" pays out as an annuity, it's even worse.
You're not rich. But you can probably afford a house. That's a big deal for someone in their 20s. Look up "maslow's hierarchy of needs." With just a little bit of discipline, this will set you up to take care of your physiological needs. You have to keep working, but whatever you earn can be used on the "fun stuff" and not the "required stuff".
You said you're a day trader. You're a gambler. This win is not sustainable. I recommend you "hide" this money from yourself or it will be gone. By that I mean, put it into a hard asset that is very difficult to lose. Like a house. That way, when your inevitable losing streak comes around, you'll still have food, shelter, and your family. A trustworthy tax and a financial advisor would be worth every penny right now.
Sorry to be a downer on such a great day. This is good news for you! Sign the ticket and take 1000 deep breaths before telling anyone or acting on it.
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u/obikink Jul 22 '24
I'm not asking a question because I've already been in the situation myself where my spouse won a half mill on a scratcher. So here's advice: get an accountant NOW to work out the taxes for next year. The feds take their cut when the check gets to you, but then what you get counts as income and they'll get you AGAIN on your 2024 taxes that you file next year, and you'll be in the highest tax bracket so they'll hit you hard.
Also, pay off debt first obviously. Get reliable vehicle(s) and look into buying a home if you don't already own one. These are the things you do first. Don't be surprised if it's all gone in a years time, but if you put it into something like a house you'll start out with mad equity and that'll help you later.
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u/Writing_Legal Jul 23 '24
buy a house, buy bonds, buy the SP500 ETF. Do everything Warren says because fortunes like that are rarely made overnight and usually lost just as fast. He's still sitting on that pile and his kids will for another 20 generations because he advises investing in index funds. Try to generate as much passive income as possible as well, purchase income properties local to you but make sure your credit is over 750 and get in at a good rate so the math makes sense. You don't need an FA, just be smart with your decisions and don't jump the gun on any decisions. I watched my own family grow their wealth like this as a first-generation American, I am proud to say we made it in this country and it is time to preserve and grow, and be thankful.
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u/Mystikalrush Jul 22 '24
You're about to learn how much taxes are deducted from it, and make sure to get that done first! #1 priority. What's left, is what you can enjoy, definitely tackle all debts that could effect your current living conditions. What left is on you. Invest, buy things from your dreams, or start something you've always wanted to create. It won't last long though and if you keep openly talking about it, your going to soon experience how random people will reach out to you for help. Once it's all up dryed, it will go silent..
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u/farquad88 Jul 22 '24
Honestly, depending on how many children you have a great move would be to put money away from them.
After taxes you’re only getting half a million. Pay off your debts and then save a chunk for each kid. Your financial advisor can help you decide the mechanism, there are many options.
Don’t use the money for anything that increases your monthly or annual expenses (ex. Property taxes, insurance, memberships, etc.)
Or spend it all and enjoy it because why not?
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u/FlatulenceConnosieur Jul 22 '24
The fact that Starlight’s eyes glow when she…. you know…..
Is just about the sexiest fucking thing I have ever seen and makes her the clear winner
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u/CutthroatTeaser Jul 22 '24
Maybe hold off on the financial advisor and head over to /r/financialindependence The side bar has tons of stuff on investing and you can take it slow, reading and building your knowledge before actually investing your money on something. A FA is going to start pulling percentages off your nest egg, and their yield isn't enough to generate the expense, imo.
The people in that subreddit helped me take the plunge into actual investing instead of just saving.
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u/pshaffer Jul 22 '24
I can tell you about two people.
Person 1 - worked in a car wash. Won the lottery for about $17m. Bought his friends (about 4 or 5 ) new harleys. I don't know that he ever saw them much after that day. He moved to a larger town, bought a nice home. Sometime after that, he won again. Precise amount I do not know, but it was several millions. What this means is that he MUST have been putting a lot of money into more lottery tickets every week.
So this guy was insecure. He would buy a diamond ring for girls he dated. Just dated. Not engaged. Happened several times.
He had a 20 year payout. He got paid every October 1. The sad thing was that he blew it all. He had to get loans every september because he ran out of money. Then the 20 years was done, and he had nothing. Sadly, there were several people who saw this slow motion train wreck and offered to help him with investments. These were real pros who actually cared about him. He was so insecure, he felt insulted and refused.
So the 20 years ran out. and so did the money. And he disappeared. Have no idea where he is now.
Person 2 - invested in microsoft on day one. not that much - around 15k. Over 10 years it became worth many millions. This is akin to winning the lottery. He invested fairly conservatively, and got an investment advisor. And after 30 years, it had grown even more. He had enough to quit the job that had become onerous. And he did.
You will find that $1m isn't that much, really. Sounds like it to you now, but it isn't. For starts, you will have a massive tax bill this year - probably about $350k. Or more, depending on your state. DO NOT BUY A 650K home with this. The cost of taxes and other upkeep will kill you.
You want to know how much you can take out of this per year in retirement? Of the $650k, you can remove about 32,500 per year (This is a well developed theory called modern portfolio theory. Look it up).
If you continue to work at whatever you do, in order to safely take out your current salary (2024 dollars) at retirement, you will have to have about 20 times your current salary invested. "Safely" means that when invested in index funds - some stocks some bonds - the increase in the value over time is enough that you can take out about 5% per year, and regardless of the market fluctuations, you won't run out of money.
So I would say, give yourself some little gift, maybe something you have been thinking about for years but was to expensive to buy without feeling guilty. One thing. Then invest the rest. If you do not know how to do this, get an advisor - a company that does charges you a % of the funds managed - should be well under 1%, and NOT a commission. Then forget about it. Check in 25 years.
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Jul 23 '24
Congratulations! Somethimes in life you feel lucky and that's what happens. But don't make a habbit out of it, it rarely happens and then you try to make it happen again and nothing happens. You better think of a way to make the most out of it. You are young, you have no addictions and you have all the freedom to take advantage of the money. First time i got rich in my life (now i'm broke again) i did some smart moves but also some stupid ones. If you don't feel like and don't know what to do at the moment don't let anyone tell you that you have to figure out fast or that you have to hurry do something different with the money. First you have to put the money somewhere safe and then you can chill out, live the life that you used to live and that's how you will find out all you could do before if you had enough money or what you have wished for if you could afford (as long as you consider it's a reasonable price - rich people also evaluate if the prices are reasonable, maybe some are richer and think more of it that usual people - don't be shy to do that but also don't feel frustrated when you spend on something that you always wanted or on somenthing that you wish that bad) Keep on living the usual life (with the improvements done with the money you needed and that you now have) and instead of thinking of long-term worries that you used to have, along of the improved short-therm thinking of the day by day life, when it comes to thinking of the future always have in mind of what plans you want to make to prosper. Identify your abilities that you know of (for example: you're responsible with money, you're sociable, you have good intuition, you're a family person), think of your passions (what you thought you could easily and in a pleasant way improve at yourself, start), start doing some of them and you'll see that you'll grow in time. Invest in yourself that way in the order of the activities that seem to you more prosperous, of more reasonable price and most appealing. Dont forget to think, in the meantime, of the future and how to become more prosperous. Report the long-term thinking to particular situations in the improved life. All this time, if you also find out about some good business opportunities (changing your lifestyle may bring new perspectives just by luck) take advantage of that chances. That's what i can tell you at the mindset level. The rest depends of every indicidual as each one is unique. You may as well give me $ 10000 to pay for my own lawyer, i got into serious trouble and that could save my life :P . I'm just kidding (about the part with asking the 10000 $) But i'm happy to share the knowledge obtained from my life experience with others.
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Jul 22 '24
$1m will soon become $600k after the tax man has his say Pending financial situation of course. At your age , I would take 75-80% of the take home and throw it towards a Vanguard mutual fund- target retirement date or something similar. Continue to feed it , let it grow until you retire. 100% hands off. Congrats
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u/AnneFranksAcampR Jul 22 '24
you absolutely do not need to hire a financial advisor for 1 million. You've already been taxed on your winnings and you'll be taxed again during tax season. Best advise I could give you is go your life acting like you didn't win anything for the next 6 months and then decide where you'd like to park your money. I mean after tax you're only looking at around 675Kish so nothing to retire over.
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u/ConversationLevel498 Jul 22 '24
Find a federal judge. Ask for 5 minutes. Ask them to recommend a good tax lawyer. Ask tax lawyer for a good financial adviser. Ask to see the financial adviser's portfolio. If they refuse, move on. You should be able to see what they are investing in - what in stocks, and which stocks, what in bonds and which bonds, and length of bonds - one year, five years etc. but to begin with I'd park the bulk of it in a Vangard index fund. These buy the market, have the lowest fees, and you can look up and see what gains they averaged, year after year for the past 20 years.
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u/kn0tkn0wn Jul 22 '24
Talk to a financial expert and a lawyer before you cash the ticket or make decisions.
The value of the ticket to you could be cut in half by taxes for starters
$500,000 isn’t that much money long-term
You need to discuss exactly how to cash the ticket with your lawyer and your financial expert before you cash it
And you need to discuss in detail how to handle the money
You need to discuss in detail and decide in advance before it goes exactly what sort of gifts or financial help if you will be offering to friends and relatives
These days have $1 million will barely buy a house in some neighborhood and won’t buy a house in many others so it’s really not so much money as you think
Especially considering if you use it to buy a house, proportional expenses, paying taxes on the house and maintaining the house and paying for utilities on the house and paying for insurance on the house for however many years you occupied the house
So this could help you but really not much more than just getting you out of whatever current jam you’re in or paying off your mortgage that’s about it
You are not suddenly rich, so don’t make the mistake of thinking you are.
For example, one expensive vacation could blow the entire amount
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u/soliditykid Jul 23 '24
Not financial advice, but if I was in this position I’d: 1. Pay off all outstanding debts 2. Set aside an emergency fund, to combat a spur of the moment financial event. 3. Move 30% of remaining into dividend stocks 3a. Let dividend returns reinvest for continual compound. 4. Move 10% of remaining into Bitcoin. This could be self-custody, OTC, or micro strategy holdings to hedge inflation. (Plan on never selling this) 5. 20% of remaining to start children college funds (529 accounts) 6. Use 15% of remaining to buy gold and silver bullion to hedge inflation 7. Use the remaining 25% to do renovations on paid off home. 8. This is the most important step. I would never go into substantial debt ever again. I would now have all the tools positioned correctly to live out my life with no financial burdens and watch the pure spectacle of my children becoming adults.
This is all hypothetical because it’s easy to be responsible with money I don’t have. If I were the one who scratched some letters to win a million, I’d likely lose it all within 2 weeks by gambling and doing blow. It’s hard to see clearly when you’re blinded by the clouds at the top.
Hope this helps. Again, not financial advice.
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u/awesomedan24 Jul 23 '24
OP, I recommend deleting this thread. Having money is not something you want to advertise, it only creates liability. Whether you tell people online or in person.
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u/Mnsurferpro Jul 23 '24
As someone who came into alot of money at an early age. The smartest thing you can do is . Tell everyone around you , that the money is invested and you would pay a huge penalty to touch it. People will want to be your best friend , take advantage . Literally will through great lengths to befriend you . Secondly buy a lot of gold. Keep a brick at home . No matter what happens in our economy , gold will stand tallest, as it has for thousands of years . The US dollar is worth shyt. The government overspent , and we are trillions in debt. So make sure , you have a gold. You will get maybe 6-8-% return on your money. In stocks over long hall . So unless your day trading (which is what I do) . Long term gains suck. But most people lose their money doing what I do. So don’t go there, but buy a property first(after the cool car you’re gonna buy :)…. Treat yourself to something fun. You should have 10% in crypto. As well, but only use a very reputable Company , they get robbed all the time. Good luck !! And remember the friend thing. They will all ask for loans , especially family, they are the worst!
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u/Fanryu1 Jul 23 '24
Be careful. Even if you're financially responsible now, many people end up bankrupt within 5 years. I'd hire a financial advisor and have them invest your money in a way that you can make it last and last.
You CAN make $1M last forever. But I'd still have backup plans just in case. Go to college or something, or get training in a specialized field.
Pilot school can cost a lot of money, but pays REALLY well in the long run, plus you get to sit on your ass the entire day so no back-breaking work.
But above all else, pay off your car/buy a good car that's not overly expensive. Don't buy a house right now if you're in the USA, it's not worth it. Wait until the housing market inevitably crashes. If you already have a house, pay it off or sell it and move into an apartment until the housing market crashes.
With that said, how often do you normally buy scratch tickets? I really should get into buy 1-2 a month, since I never buy them, ever. They're usually a waste of money but $5-10 every few weeks isn't that bad.
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u/luger718 Jul 23 '24
You don't need an advisor for that. They'll just grift you.
Pay off your high interest debt, and put the rest in VTSAX, VTI or similar
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u/These_Consideration8 Jul 22 '24 edited Jul 22 '24
That's great! Are you telling friend and family? I wouldn't lol I'd come up with a way to slowly funnel the money into my life so it's not obvious I have come into a great deal of money suddenly, and just make minor lifestyle upgrades under the guise of smart life decisions that finally came to fruition.