If I Won The Powerball Lottery

Image by Hermann Traub from Pixabay

OK, we’ve all thought about it. No sense lying. What would you do with the millions of dollars if you won the Powerball or Mega-Million Lottery drawing?

How Would You Manage the Money?

Every so often I hear about some millionaire athlete who came from humble beginnings and are now flat broke having to sell all the frilly homes and cars they bought when the money was rolling in as fast as they could spent it.

In many cases money went to bad guys from the old neighborhood who made the winner feel guilty and that he or she should share the wealth.

After all, how much money do you really need?

Isn’t that what’s always asked about the rich? Hey Bezos, Zuckerberg, Gates, Buffett, how much is too much?

Money Is a Tool

Money has no value whatsoever until you decide to spend it. Either to buy something you want or need or to pass it on to a charity or those less fortunate.

The big problem with thinking that way is that once the money is spent it’s gone forever. If you want more, you need to re-earn it.

Things only have value if you give them value in your mind’s perception. That’s why I always say that we buy things based more on how they make us feel than out of a genuine need.

People often buy things they want as opposed to things they need. And that’s really where poor money management comes into play.

I want it so I’ll charge it rather than budget and pay for it down the line.

Blow It All or Is There Another Alternative?

My wife and I have often sat around the kitchen table fantasizing about having millions at our disposal and what to do with it.

Here are some of the things we thought about.

First of all, if there’s someone in our immediate family (by immediate I mean I actually know you- not that we share the same last name) who needs financial help then of course we’d help any way we could.

There are several charities that we’d like to support because one or more family members may have contracted whatever disease they’re trying to eradicate.

But as mentioned above once the money is spent it’s gone forever.

Before Blowing It, Look to The Rule of 72

By dividing 72 by the annual rate of return, investors obtain a rough estimate of how many years it will take for the initial investment to duplicate itself.

For example, the Rule of 72 states that $1 invested at an annual fixed interest rate of 10 percent would take 7.2 years ((72/10) = 7.2) to grow to $2.

In the real world, a 10 percent investment will take 7.3 years to double.

I’m happy to live with the extra 0.1 part of a year.

NOTE: I do realize finding a return of 10 percent would not be easy. I use 10 percent for simplicity and because I’m math challenged.

But you get the idea.

If you win $50 million and you keep your same lifestyle and depending on the interest rate you can get by investing it, you could have $100 million in a few short years.

Then $200 million after that. Is that too much?

What Would I Do with The Winnings?

It’s a given that I’m not going to blow the money on a starter castle home, a boat, or a 10-car garage.

I really have no desire to travel or see the seven wonders of the world. I can see those on YouTube I just won’t know what the inside of the Sistine Chapel smells like.

I think I can be OK with that.

In fact, I’m not giving one dime of the money away to anyone or any group.

What I will give away is a boatload of the interest that the invested principle generates.

That way the money can still help my church, my favorite charities, and needs that might occur in my immediate family.

So instead of giving a gift that depletes the principle I can give interest in perpetuity.

The last thing I would look at is investing in as many tax-free instruments as I could find.

I really like my Roth IRA but contributions to that would be too small, so I’d look for other options.

Things like tax free municipal bonds for example. I would definitely seek out a professional financial and tax adviser before doing anything.

Some Final Thoughts

I will admit that in my early years a sports car might have been at the top of my shopping list. A nice home with an indoor basketball court might be there too.

Today, too much maintenance, the expense of housekeepers, gardeners, etc.

Who needs those headaches?

I’ve heard people say the two best days in one’s life is the day they get a boat and the day they sell it. So, no boat.

I’m too much of a white-knuckle flyer to have my own plane so that’s not on the list.

I’ll keep busy writing and adding the Medium earnings to the winnings. That just might pay the taxes.

After a hard day of thought creation, I’d prefer to sit back and enjoy whatever days I have left watching the beautiful Montana sunsets.

Just that is almost winning it all.

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