Winning The Lottery

What would you do if you won the lottery?

One thing that a lot of people forget about is you pay taxes on those winnings. Meaning $6 Million isn't the actual amount you receive. 39.6% of it is for federal taxes.

Lump Sum :
  (approx) $3,720,000.00 / $2,246,880.00 (after 39.6% federal tax) 
                            

Payments - Average (annuitized payments - check specific lottery rules) Per Year ( 26 yearly annuitized payouts (Mega Millions - Each payment is 5% larger than the previous one) ) :
  (approx) $230,769.00 / $139,384.00 (after 39.6% federal tax) $3,623,984.00 altogether.

 

I got that from:

 

http://lottery-calculator.com/default.aspx

 

I think how you choose the payout would depend on your personality. When you go for the big things like the mansion with the expensive cars, you are more likely to burn through all of it. For some, living large is what they want whether they realize it's temporary or not. I would do the math, like I did above, and choose the yearly payments.

 

Then I would divide it by 12 months and only allow that number to be added to the income budget each month:

 

$11,615.33 a month

 

NOW we would be able to afford that moderate sized house and a second kid. That would also include the cost of homeownership like taxes and repairs. It would also leave room for savings. We both have very old cars and it would be nice to be able to own a blue Ford Focus for me and an off white Ford Escape for Josh in the current model year.

 

Novel thought for us............CURRENT model year. Josh's Buick Regal is a 2001 model and my red Ford Focus is a 2005. I don't know how we would afford new cars. They would have to be at least five years old on purchase if our current cars went kaput! A current model year is like asking for a pet unicorn! Basically, our winnings would be for the things we both want that are common in our town.

 

Would Josh still work? Yes, But with less pressure on how much he makes and overtime hours. Josh loves working in the right environment. It's important he maintain that. In general I don't think it's a good idea to give up working if you win the lottery. However, it allows you to quit a dead end minimum wage job you hate as you look for something that you enjoy more. Something you're not trapped in with lack of options. Your family would be provided for so it would be a way to escape corporate abuse. Something too many people need desperately!

I talk about people in these circumstances all of the time. I'm not thinking about us. Josh makes more then the minimum wage. It's not a lot more, but it is more. Because of that, we have less worries then the people I am thinking of. We still have a lot of worries. We have cut expenses everywhere we can. One example is our cell phones. We don't have a landline to save money and we can't afford smart phones. THAT'S becoming harder and harder to live without! But, at least I know I'll be able to feed my family until we are all full. Not everyone has that luxury.

 I'm thinking of the retail sales associates, the fast food workers, waiters and waitresses, and everyone else not earning a living wage. A living wage means scraping by, but at least it's enough. I'm thinking of the many people not making enough.
 

I hear that most of the people who play the lottery are those who could least afford it. After all, you buy the ticket win or loose. If you desperately need that dollar or two for living expenses, it might seem foolish to play the lottery. Some people play because it's fun. For them, they are only spending winnings from a previous time. But, for others, they play because it feels like the only chance they have to escape their horrible financial situation. Money is just too crucial to a happy life in America.

You can't truly be happy if you are worried about having enough money to afford what you need. It's the part of the income gap that the rich will never understand. They refuse to listen when being told about it. Because they are privileged enough to never have that added worry. We might not worry about food, but we have PLENTY of other worries. They have no worries. Quality of life is better when you have less worries.

 

I don't play the lottery. I don't win things. So it's not worth wasting the money. Winning big would improve our quality of life. But, it's just too much of a long shot to make trying worth it. It means we have no hope for getting that house, second kid, or less then three year old cars.

What would you do if you won the lottery? First off, do the math on how much you ACTUALLY will receive. THEN decide. My goals might sound boring to you, but for me it would mean all my dreams coming true. That's what the lottery is about.