You just won the lottery! now what?

[Mando]

This is the game my wife and I play when the jackpot hits a billion...

Assuming you are the sole winner, how would you use the winnings?

For simplicity it comes to $500 million after taxes

[Mike]

Pay off all our cars and our house.

Give some money to family.

Build our dream house somewhere.

Travel a lot.

Arrange to game a lot with my friends. Like possibly even pay for a professional GM sometimes.

That's my selfish stuff. We'd give away a lot of money too, but probably not ever enough for me to stop feeling guilty for being so wealthy.

[Phoebe]

Let's suppose you can earn 25 million a year on your initial 500 million, since even CDs are over 4% now. With the first million of that 25 in sheer surplus to play with each year, I'm moving my parents in here and buying two 8-hour shift health care providers and one part time housekeeper and chef. Next 12 million goes to the PAC husband will run, supported by a chunk of the principal. Remaining 12 million funds the educational foundation that in turn opens the charter school, my new job. From there, see what happens. Probably give a few mil to my nephew to develop investment properties. Money makes money, baby! The charter school kids need top quality food, so...

[Tahlvin]

I have a spreadsheet for this!

$1 billion winnings, $500 million goes to taxes. Another 10% ($100 million) is set aside for a charitable fund. We take another roughly 10% ($99.9 million) to setup a trust fund for each of our 3 kids ($33.3 million each). We take $2.5 million to blow on various things right off the bat (pay off a few debts, take some trips, etc.). That leaves us $297.6 million to invest.

If you invest that money and earn an average of 8% (a conservative return for mutual funds in normal market conditions), and withdraw 3% each year to live on, the principal grows by 5%, more than keeping pace with inflation. At the end of the first year, you'll withdraw over $8.9 million and the principal will have grown to $312.48 million. Continue in that same pattern, and it'll look like the following:

• At the end of year 10, withdraw $13.85 million and a have a balance of $484.76 million

• At the end of year 20, withdraw $22.56 million and a have a balance of $789.62 million

• At the end of year 30, withdraw $36.75 million and a have a balance of $1.286 billion

With what we're making now, spending $2.5 million in blow money in the first year will seem extravagant. But limiting ourselves to that little amount, investing the rest, waiting a year for it to grow and then living off the interest, we'll essentially end up with an annual income that keeps growing and is more than we will probably ever be able to spend without ever touching the principal, allowing us to do so much good with the excess.

And I am such a nerd.

[Phoebe]

But in the good way! If it involves a spreadsheet that's a plus. I'm glad you've worked out how much extra I'm going to have to play with for my foundation. Hopefully I can start a whole range of schools that go from Pre-K all the way through college and trade school. It will be a microcosm of the educational model the world needs. Mostly the teachers will be robots lol. I kind of hate these thought experiments because I'm not going to win the lottery and then I feel like I ought to find another way to follow my dream because why wouldn't I start a school? If you think it's so damn important why don't you do it?

[Kyle]

I used to have a spreadsheet, I need to see if I can find it. Vaguely I recall paying off mortgage, building a new house, new cars (but nothing crazy). And then there were allotments for family and friends. Like- each kid got a million. Brothers got a million. Folks get two million. Close friends get $50k. And then I calculated the gift tax cost on all that too. And even after all of that set up, with what was left over I enough for income fund that would generate something like $1-2 million a year in income, and then a charitable fund that was going to generate millions in income that I'd invest in various charitable purposes.

[Mando]

After reading the other post about billionaires I remembered this one and thought I would post my list

In no particular order:

Pay of all the house notes for the people i work with (half a billion goes a loooooong way amiright)
set up scholarship funds for both high schools in the county
completely replace and modernize the school buildings
build and fund library and fund the staff. Ours is way underfunded
establish a half-way house/ recovery house for different groups of people: ppl escaping sex trafficking, homeless, recovering addicts
create a small county reservoir (we have drought issues)
fund food banks
fund the band, the arts programs, and STEM
pay my kids homes and cars off
vacation home in FL and Maine and Costa Rica and Iceland
put money in trusts for grandkids
donate to our church and missionary fund
buy a new tractor
pay for my nephews kids college and a new home
fund a new pre-k facility
to be continued...

[Phoebe]

My husband doesn't think it's a good idea for me to start a private high school funded with taxpayer dollars, so I haven't yet started the school and I'm waiting for the lottery to help fund it. For that I would need to buy a lottery ticket, so I'm waiting for that as well.

I think it's obscene that in America my tax dollar can be forcibly taken for me in order to fund religious views that entirely and directly conflict with my own. This is why the damn Pilgrims came, among other things. Is there any place in this world that actually has religious freedom?

[Mike]

I thought the Pilgrims came here in order to make their religion the official government religion.

[Phoebe]

Maybe so. But they weren't able to get the job done in England, that's the crucial point. The state has established an official religion, complete with my tax dollars being used for it. It would be outrageous even if my religion were one of the officially endorsed state religions, but of course it is not. I genuinely wish that my church would establish a school and teach exactly what it teaches every Sunday at that school, and make it publicly known, and demand its share of the tax dollar. Unbelievable.