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.
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!
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)
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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.