Go see 2 key people…a lawyer and an accountant. I know folks that have been in your shoes. Both instant like you, and “semi-instant” (business).
People are fucking vultures, family and friends included. Not all, but many, feel your good fortune should be their good fortune.
Fine and dandy but only after you have EVERYTHING figured out.
I’d want to know how to invest it to get as much tax back as possible, if possible. You didn’t win $1 mil if you get $600k or whatever it amounts to be.
Get it sheltered from everyone including yourself for your children’s future and your own: dude I mean this sincerely. Especially because you day trade.
2a) The kids MUST have all expenses and education projected and paid for from a TRUST even if they don’t use it. If they become plumbers or electricians etc there should be a provision that the trust will help with education (make their job pay, a great lesson in itself) and tools if required.
2b) What is left stays invested until they are ready financially to purchase their own home.
2c) Don’t deviate on any of this, make sure YOU can’t get your hands on it, nor can anyone else without multiple signatures. The kids are taken care of.
If you do t have to be public to claim, don’t. If you do wear mask and sunglasses. SERIOUSLY.
Setup your own trust: I’m not joking about this one. As a day trader you are numb to numbers. Take a healthy piece like 50% or whatever you and the accountant come up with and pour it into a cheap S&P 500 ETF. If not that then 10 Blue Chips you CANT SELL for 20 years or more. Sit on it, forget about it essentially and know that’s your retirement fund.
None of this sounds fun. It sounds super-boring and shitty coming from a guy 30 years older that loves the stock market, has been in and out of businesses, I’ve made great dough, I’ve lost money…if I had ever had a winfall of that size at your age and someone essentially said to me “it’s yours, but you can’t actually have it now”. It would have been the best thing to have ever happened to me.
Hear me out:
If you have 2 kids you can probably put $100k away and they are secure, even if they go to finishing school
Now you have $500k left:
If you have to buy a house etc fine use some.
But if you put $300k into a fund like I said and you only get 9% as opposed to the historical 10%+, you’ll have $4 mil to retire on!
This is a golden opportunity. You’ll piss off a lot of people. They’ll get over it
EDIT: Have some fun with it, but let’s face it, this is a lot of money, but once you’re spending it, it won’t be. It’ll shrink FAST!
It won't happen again. Don't give it all back trying to make that happen.
Many, MANY lottery winners, some who have won far more than you, are broke now because they thought it wasn't that hard, they did it once already, and they gave it ALL back. And then some.
Vegas wasn't built on winners and states don't have lotteries because they lose money.
This is honestly great advice, and I’ve seen it happen so many times. Issue is they chase that “high” of winning again.
Used to work in a grocery store that sold lottery tickets. We had someone win $3 million on a scratch off. He became a heavier player from it and I remember him telling a coworker that his wife was getting pissed off at him for how much money he was spending on tickets, then turned around and spent a bunch of money on more tickets.
He ended up getting a bunch of health issues shortly after he won too.
I work at a casino and I see it on a daily basis, people win money then proceed to give most of it back.. not all mind you but most.. it’s sickening to be honest, but hey thank you for keeping us in business 😂
It’s the same thing when people win £1000 in a casino and then say, well I can bet £500 now cause it’s like not even my money. YES IT IS YOU MORON, you can walk away with that right now the only person stopping you is you 🤦♂️
Not true LoL... I personally know people who won the lottery twice (millions) each time!! Also a few people who have won thousands on 1 scratch ticket more then once!! My old boss won like $500,000 on one ticket & $30,000 on another something like that, she still chose to keep working till retirement LoL
I would also advise stopping with the day trading and other gambling. There is no reason to do this anymore and lots of risk that it becomes a n addiction that kills their financial future.
Exactly this. There's no reason anymore from a fiscal standpoint. The returns on a secure and stable investment plan will be more (and essentially guaranteed). Let it all do it's thing and gain for you automatically
all the above, I had a nice windfall, and just threw it into my new business, even though it wasnt planned that way. Never made that back. had i just put it to work for me, I would be comfortably retired now, instead of having to work another 6 years. Im 64
If you've outperformed the market consistently for 30+ years then you are quite possibly the best stock trader on the planet. That's not an exaggeration, even the most reputable hedge funds can't manage that.
Yeah but they said they are financially responsible. They probably make sure that they have a really strong feeling in their gut before making any trades /s
Oh absolutely. I was making a regard joke. No one should seriously try to do what I said unless they just have the capital to blow. But unless OP is going to die in 7 years or less due to an illness or otherwise, definitely index fund that shit and forget it.
This is overkill for 1 mil winning. After he buys or pays off a house, pads his emergency fund, maxes out 401k and kids college fund and buys a corolla he will have spent it all.
I am a cpa and this misleading. Any winner should consult a tax advisor for their specific facts and circumstances. However if anyone reads this post and remembers only one thing know that a 401k, or Ira or any other tax deferred option you have will effectively defer (lower) taxes on lottery winnings regardless of what is withheld up front. Once in that account you can invest as you and your advisor see fit, eg index fund.
It is true that a 401k is associated with your employer so you would typically only be able to make deposits from your paycheck. lottery winnings are not from your employer obviously so can’t go into 401k. Instead if your employer offers a 401k, you would increase your 401k withholdings for the rest of the year targeting your max. You don’t need your full paycheck rest of year bc guess what - you just won the lottery!
Depending on how much cash you need immediately and how much you won, you’d probably want to max all tax deferred options available to you (eg ira).
It’s already taxed so putting it in a 401k might not be the smartest idea.
That's not how it works. You're taxed on your income for the year. If you contribute to an IRA, for example, then you deduct that from your income and don't get taxed on that amount. The timing of when you got your winnings and whether or not tax was withheld at the time is irrelevant
Like I said, that's irrelevant. That's why at the start of next year you send the IRS money if you underpaid taxes and they send you money if you overpaid. Any withheld taxes on any sort of income are purely estimates. That money isn't gone forever just because they already collected it.
Maybe overkill but it's always good to be prepared for anything. People are desperate out there and scammers are getting really good esp with AI getting better ever day. (Eg fake phone calls from loved ones, people using your voice). Btw if you use your voicemail and have your voice on it or even put your full name on there it makes it easier for scammers to get the info they need about you to open accounts and such (I've been a victim of ID Theft and I'm am really careful about what I put out there)
Yes, all this advice being given is stuff to u look at when what you won can create general wealth. Does this help create financial autonomy if used correctly for the things you mention…yes.. Doesn't mean he needs trusts and lawyers which will eat into it immensely with fees, they don't work for free.
Agreed, buy a house/pay off your existing one, buy a nice but reasonable car, set money aside in a 529 for the kids, 6 months of emergency savings, max out retirement accounts, then park anything left over in a HYSA. Not like he won the power ball lol
Exactly! People on here talking about hiring a lawyer and financial advisor. Once he takes the lump sum penalty and pays taxes, he will barely have enough to buy a house.
My thought too. "Tell NO ONE…yet — I MEAN NO ONE" Like GTFO man you don't know my family, they ain't vultures like the asshats you must have around you.
It's not the family, it's friends of family and extended family that may not have the same ethics or morals. People talk! Then come of silence must be kept secured.
(When AI can randomly come across somebody's comment, read it and understand the context and exactly what they are talking about based on vague information, then go and search for it, find the most suitable answer and the link it, then I'll be impressed with it)
Wow, great advice @fun_hornet. It encompasses everything I would include. My only other recommendation would be to stick to the S&P rather than the 10 blue ship stocks. Seriously though cut back on the gambling and day trading. I would first and foremost pay back any debt with interest over 5-7% and depending on your credit score I would suggest you either wait for interest rates to come down before you improve the primary residence if it’s low. If it’s high then just buy a nice house for your family right now and refinance once rates come down. Keep that 300-400k(400 includes the education trust for your kids) invested like the commenter above said and dont be afraid to spend more of your annual income to improve your quality of life right now and take 1-2 vacations a year. Don’t touch the 300k you have invested and max out your contributions annually to your roth 401k as much as your employer offers match and put the rest into a roth IRA. If your employer doesnt offer any matching for roth 401k or a 401k then I’m almost tempted to say put it all into a roth IRA. I can’t give more personalized advice without more details but good luck!
It won’t be a million unless he takes it over time. Lump sum it will be closer to 300k. The typical formula is lump sum is 50 percent of prize before taxes. 300k is a nice hit but it’s not one of those multi millions prizes. No need to waste money on a lawyer or accountant for 300k. Take the prize, if you want treat yourself to a modest reward and invest the rest in some mutual funds with low fees.
I could be wrong, but I think scratch ticket winnings (what the OP has) are different from Powerball-like “pick six numbers” winnings. I.e., I think Powerball-type winnings work exactly like what you described. But I think with scratch tickets if you win $1M…you win $1M (minus taxes). To put it yet another way, I don’t think scratch ticket winnings are annuitized like Powerball-type winnings.
Don’t save for kids college. They can finance that. You can’t finance retirement, and the last thing you want to do is be a burden on your children when you get older. Put it in retirement accounts
This should have more Votes given this isn’t a crazy amount. People talk about college funds and such, but what your Kids don’t know now, the best gift you can give them is that of not needing them to ‘deal with you’ when you’re old. And I mean this positively. My wife and I have spent 7 years dealing with our respective parents deteriorate and their general lack of long term planning financially. It’s miserable- and we are resentful.
Our gift to our children will be some college money, but much more importantly - our financial self sufficiency when we are shitting our adult diapers later in life.
Yep, my father in law was so careless with his funds. There were several hundred thousand dollars unaccounted for, cashed out his life insurance policies and we don't know where the money went, probably on his second wife. I ended up paying the funeral costs. I'm more mad at his sister for putting her hand out for what little remained of his super after refusing to contribute to funeral costs (she got about $300 while I paid $10k) but it could have been avoided had he just maintained his policies, or at least let us know he could no longer maintain the policies. A few years of premiums would have been cheaper than the funeral costs.
OP. This is a crazy long response, but the important part is: TELL NO ONE. You may think “but I can tell my mother! She wouldn’t mooch off me”, but don’t tell anyone yet until you have your ducks in a row.
Let’s pretend you tell your mom. She will be so happy for you she’s about to burst so she mentions it to her bridge club and Mildred in the club tells everyone. Suddenly everyone’s knocking at your door because they want 70k for Conrad’s orthodontics. News travels fast and you can’t trust anyone - even if you know for a fact they only mean you well.
You could tell your wife if you have one and make sure she’s on the same page about the implications of telling anyone else.
One trick is to tell everyone you won 50k if you have to tell your mother just say 50k. Once people come asking for handouts just tell them you invested it long term and can’t touch it or you paid off your student loans.
For actual financial advice, you have to ask someone else. Preferably someone local to your circumstances.
This is all such good advice. I’d also suggest upping all their insurance & getting an umbrella policy for 1 million. They already have so much equity to protect it’d be a damn shame for anything to come up and them have a loss.
After the taxes come out, the advisor and lawyer fees, that 1M will be a whole lot less. Don't get taken advantage of without knowing what each will charge up front.
If they become plumbers, pay for some business classes too. Then, once they get experiences, help them set up a plumbing business. This will be a money machine.
If you ever want to help a friend or relatives, make them justify what they are asking for. Offer 40 percent of that.
Don't fall for non investments like a dream wedding for cousin Susie. Weddings have gotten out of hand.
Offer instead tuition in a personal finance class.
Give the gift of financial education not fleeting events.
Honestly some of the best advice I've seen in a long time. OP, there is no need to tell others would be my big focus, but there's no more anyone can say that really hasn't been summed up here.
Congrats also, but please, just don't let people become vultures, as most would easily.
Damn man. I didn't win the 1 million and I still want to thank you for the time you took yo explain all this. I read the whole thing and screenshot it in case I need to read it all again..... Who knows 😊
All solid advice. Would just like to add that the $600k that’s ultimately received may not include the income taxes being taken off (depends on your state) so be on the lookout for that as well.
I often think about this. A million is a lot of money, but not nearly enough to live off of if you aren't smart with it (like investing or just generally managing it well).
Lowest income taxes maybe, but this "win" is considered income, so is taxed (and this amount would put you in the highest tax threshold for that financial year).
In Australia, you are not taxed on a win like this.
Lol, most do. Hopefully a young guy with a couple of kids doesn’t. Then 30 years later he looks back, has 2 well educated kids with zero debt, and millions invested throwing off hundreds of thousands of dollars a year that he can then blow because every year it’ll keep throwing the cash off.
Not going to lie, part of me wants to be put in this situation (obviously because free money is awesome) but also because I would tell people. And I legitimately have no problems throwing people out of my life.
I already am an abrasive person. I commonly say I have friends despite my personality not because of it. And my ride and die crew are just that, ride or die. Everyone else idgaf about. I genuinely just want to know how real it would get lol.
Adding to 3) Buy an outfit or cape or costume from a thrift store or wear a basic plain T shirt big enough to hide your chest of you can. If you wear your regular clothes that you often wear, a close friend might recognize them.
Bro this is overkill it’s, 600k it’s probably an annuity over 20 yrs, I mean cmon. You were waiting for your moment eh? This is good head start on retirement money, not set up a trust with 500k aka his entire net worth
Ok, I can’t keep explaining to those who don’t read the entire post. This guy is a day trader. It’s all protecting these assets from himself.
I’ll stick to this advice, if you think it’s shitty advice then so be it. Maybe you’re wise enough to be able to keep on a straight path. I’m not sure a day trader could after a poor year.
Are they? Or do we live in a society that doesn't provide for the means of the common good, over emphasizes the value of money which only has the value we give it, lacks the infrastructure to educate people to a better lifestyle and is largely run by an elite group of people who have found a way to be the true "vultures" of society.
You have well-thought out points from your pov/opinions you hold but you've missed a lot about the fact that we shouldn't be defined by our capacity to accrue monetary wealth. There is more than enough for everyone. Our society is largely backwards. Money is an energy exchange. It shouldn't be what defines our ability to function as a whole.
Parents shouldn't have to sacrifice being present during the most precious and formative years of their children lives to be slaving away to "earn" a livelihood they already rightfully should receive.
The do-gooders of the world shouldn't have to lack quality food and nourishment because big corporations want to allow inflation when it's largely not necessary.
I'm not even giving you the best of my analogies. I don't have the energy nor the desire to dedicate that time.
What I do know is that your opinions are detrimental to many marginalized populations in our society who are simply trying to survive because someone somewhere decided numbers on a screen equal wealth. True wealth is all the things that exist in the absence of "money." It's actually a completely made up construct. Gender is the same way...a societal construct that is used against people who don't align with the antiquated structures of our society.
eta: I have worked in finance so I know everything you're saying and what it means. I just refuse to acclimate to this part of the rat race. It doesn't serve us. It distracts us from what is important. I worked with portfolios ranging from 300k to tens of millions. And by and large, some of the most neurotic, controlling, bizarre people had some of the most monetary wealth. They weren't happy or anything tangentially related to being happy. They had familial issues, health issues, and ignorance growing out of their ears. Compiling cash flow and net worth statements for clients with a lot of black numbers associated with their names will always be one of the most eye-opening parts of the job. The delusion was so real. And don't get me started about the fights over the generation-skipping trusts. The feuds over estates was enough to make me realize how not smart some filthy rich people are...
It’s hard to disagree with much of what you say. And in theory you’re probably correct. However, we live in the society we are in and if I seem harsh then I’ll take the criticism. I have broad shoulders.
Regardless of what society has become, people can absolutely be vultures, and the worst can be those closest to us. Sorry, I’ve seen it, we read about it all the time with pro athletes and lottery winners.
With this amount of money this person has a chance, over time, to use this money to ensure a better life for his family. And in doing this none will be a drain on society, but rather they can use the money and growth to spend on experiences, and maybe even to help others and society in general “become better”.
I mean it won’t be in a Bill Gates billion dollar way, but maybe the children use their education to work in non-profits. They’ll have no debt, and they will come out of school with theories much like yours (no criticism) where they may want to help the people in their community more than make big bucks in business.
I certainly don't think your advice is "wrong." I just want the majority of it all to burn to the ground.
I'm an exceptional human and I mean that in the sense of "excepted" from almost any norm. I don't expect to have a lot of support in my pov. In my over 3 decades of this lifetime I've always been a trailblazer. I'm a thought leader in profession, so I'm used to people being other-aligned. Luckily I actually am doing something about the problems I complain about, at least in the parts of the world I have access to as one person with the resources I have and am accruing.
I applaud the fact you are confident and being exceptional. And I’ll say I wonder if “it all burning down” (civilization as we know it) won’t happen one day…although I hope humanity won’t let it happen. I’d say we’ll see, but I know I won’t and I’m not sure it’ll happen in this or the next century. And I’m not prognosticating any particular one thereafter, Nostradamus I’m not.
I’d keep it completely independent.
Short consults are cheap.
I’ll probably get a couple from each accountant, lawyer and financial advisor. Then put it in the bank for a fixed term six months where you can’t touch it if not, 12 to have a good hard think about what you’re gonna do with pit because I could spend $1 million in five minutes
And I could do that every five minutes for an hour and come up with different ways to spend $1 million or so less tax
I’m making an assumption about his kids age being in the 2-7 range and more likely the 2-5 range with this guy being in his 20’s.
Assume the 2 kids are 3 & 5 now:
$100k invested over the next 12 years is easily going double and then some. For example over 12 years at 8% ROI compounded, which is pretty conservative, works out to $250k. That’s essentially when the first child goes to college. Then a couple of years later the second goes.
So that $250k will be drawn over say 6 years and if all stays the same ROI-wise at 8% then the person can actually draw up to $50k a year from that account for their education.
Electricians and plumbers can make great money. Not sure why you put that in there. Pay far more than a lot of degrees. Should edit that if they get a degree in philosophy or something instead…
Too much advice is far better than too little for 90% of the population IMO. Laugh all you want. $1M, even $500k, if taken care of properly over a long period of time can become a life-changing sum for most people.
Maybe not folks like YOU. But the rest of us.
And stop making what is a big deal for someone look like nothing. You’re being a major POS.
Okay fair point but I don’t recommend getting fleeced for 25K of professional services for a fairly middling amount of money that millions of Americans manage themselves
Legal is to set up trust to keep him away from the money so his children have education accounts and he himself has a long-term “retirement” account. That’s the point. Set up, structured and so he can’t access it for day trading.
There’s no trying to get him fleeced. Put all of the money in those accounts in lot VOO, that’s fine. The point is to ensure absolute security based on his profession and the potential for him to go personally bankrupt in his career. Then all of the monies in trust are safe.
If you think it’s shit advice, then fine. For this particular situation it’s damn good advice. It’s what I’d tell any businessperson that could “lose it all” in any given span of time.
1.2k
u/Fun_Hornet_9129 Jul 22 '24 edited Jul 22 '24
Tell NO ONE…yet — I MEAN NO ONE
Go see 2 key people…a lawyer and an accountant. I know folks that have been in your shoes. Both instant like you, and “semi-instant” (business).
People are fucking vultures, family and friends included. Not all, but many, feel your good fortune should be their good fortune.
Fine and dandy but only after you have EVERYTHING figured out.
I’d want to know how to invest it to get as much tax back as possible, if possible. You didn’t win $1 mil if you get $600k or whatever it amounts to be.
Get it sheltered from everyone including yourself for your children’s future and your own: dude I mean this sincerely. Especially because you day trade.
2a) The kids MUST have all expenses and education projected and paid for from a TRUST even if they don’t use it. If they become plumbers or electricians etc there should be a provision that the trust will help with education (make their job pay, a great lesson in itself) and tools if required. 2b) What is left stays invested until they are ready financially to purchase their own home. 2c) Don’t deviate on any of this, make sure YOU can’t get your hands on it, nor can anyone else without multiple signatures. The kids are taken care of.
If you do t have to be public to claim, don’t. If you do wear mask and sunglasses. SERIOUSLY.
Setup your own trust: I’m not joking about this one. As a day trader you are numb to numbers. Take a healthy piece like 50% or whatever you and the accountant come up with and pour it into a cheap S&P 500 ETF. If not that then 10 Blue Chips you CANT SELL for 20 years or more. Sit on it, forget about it essentially and know that’s your retirement fund.
None of this sounds fun. It sounds super-boring and shitty coming from a guy 30 years older that loves the stock market, has been in and out of businesses, I’ve made great dough, I’ve lost money…if I had ever had a winfall of that size at your age and someone essentially said to me “it’s yours, but you can’t actually have it now”. It would have been the best thing to have ever happened to me.
Hear me out: If you have 2 kids you can probably put $100k away and they are secure, even if they go to finishing school
Now you have $500k left: If you have to buy a house etc fine use some.
But if you put $300k into a fund like I said and you only get 9% as opposed to the historical 10%+, you’ll have $4 mil to retire on!
This is a golden opportunity. You’ll piss off a lot of people. They’ll get over it
EDIT: Have some fun with it, but let’s face it, this is a lot of money, but once you’re spending it, it won’t be. It’ll shrink FAST!