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Message
re: "Don't make investments"- Mark Cuban on advice to powerball winner
Posted on 1/12/16 at 9:01 pm to fightin tigers
Posted on 1/12/16 at 9:01 pm to fightin tigers
quote:
r glassman, that way nothing would change.
0
Posted on 1/12/16 at 9:13 pm to 13SaintTiger
I disagree personally though it will vary for each person.
I wouldn't make investments like Cuban does on shark tank, because I'm not an expert at evaluation a business potential.
However I don't agree with not taking the lump sum and I don't agree with putting it all in the bank. Here is why...the 806 million lump sum is what you win even if you take the annuity...they get the 1.4 billion because if you take the annuity they invest the 806 million and that's the amount you're projected to earn in 30 years from that investment. The problem is..what happens in the event of a financial crash or if you die? That money could disappear...and if you die then payments stop..you can't pass them on to your family. So if you take the annuity and die in 3 years your family is out of a lot of money. If you take the lump sum you're guaranteed 800 million. Evaluating risk, taking the lump sum is the smart choice.
The problem with putting it in the bank is the accounts are only insured to 250k...so either risk losing it in a financial crash or spread it around to a ridiculous amount of banks. And people will say buying land is a smart investment and it is...but property taxes are a bitch. If you bought 50million dollars worth of land the property taxes would drain your money quick without supplemental income. This is why so many lottery winners go broke..they think it lasts forever but to maintain a high standard of life costs a shite load of money. You have to use some of the money to generate more money.
Imo, how I think you should do it, is to take 100 million of the 550 million you'd get after taxes, and put it in banks in an interest bearing account. Take 50-100 million and get it put into cash, build a nice house with a room built like a safe that is fire proof with advanced security systems..and store that cash there.
Buy up 50-100 million dollars worth of land/real estate and take the rest and invest it in safe investments. 200 million dollars invested in diversified "safe" stocks and mutual funds would yield dividends to pay for property taxes and a good lifestyle and could be handled by a financial advisor.
By no means should a person make risky investments, but simply use large amounts of money to make the safe investments that your average person makes, and it will generate more income. Bottom line, take portions of the money and do many things with it, and make sure a good amount is stored in hard cash somewhere so that in the worst case scenarios, you have that cold hard cash to fall back on.
I wouldn't make investments like Cuban does on shark tank, because I'm not an expert at evaluation a business potential.
However I don't agree with not taking the lump sum and I don't agree with putting it all in the bank. Here is why...the 806 million lump sum is what you win even if you take the annuity...they get the 1.4 billion because if you take the annuity they invest the 806 million and that's the amount you're projected to earn in 30 years from that investment. The problem is..what happens in the event of a financial crash or if you die? That money could disappear...and if you die then payments stop..you can't pass them on to your family. So if you take the annuity and die in 3 years your family is out of a lot of money. If you take the lump sum you're guaranteed 800 million. Evaluating risk, taking the lump sum is the smart choice.
The problem with putting it in the bank is the accounts are only insured to 250k...so either risk losing it in a financial crash or spread it around to a ridiculous amount of banks. And people will say buying land is a smart investment and it is...but property taxes are a bitch. If you bought 50million dollars worth of land the property taxes would drain your money quick without supplemental income. This is why so many lottery winners go broke..they think it lasts forever but to maintain a high standard of life costs a shite load of money. You have to use some of the money to generate more money.
Imo, how I think you should do it, is to take 100 million of the 550 million you'd get after taxes, and put it in banks in an interest bearing account. Take 50-100 million and get it put into cash, build a nice house with a room built like a safe that is fire proof with advanced security systems..and store that cash there.
Buy up 50-100 million dollars worth of land/real estate and take the rest and invest it in safe investments. 200 million dollars invested in diversified "safe" stocks and mutual funds would yield dividends to pay for property taxes and a good lifestyle and could be handled by a financial advisor.
By no means should a person make risky investments, but simply use large amounts of money to make the safe investments that your average person makes, and it will generate more income. Bottom line, take portions of the money and do many things with it, and make sure a good amount is stored in hard cash somewhere so that in the worst case scenarios, you have that cold hard cash to fall back on.
Posted on 1/12/16 at 9:16 pm to UpToPar
quote:
If you win the lottery, you pay people much smarter than yourself to invest your money for you.
You have to be careful here also..many people are ignorant of regulations and loopholes and if you hire a sleazy lawyer or financial adviser they can easily steal your money and get away with it.
Use a person that you personally trust, and cover your arse on the back end and read EVERY WORD OF EVERY PAPER YOU SIGN and have numerous attorneys consult you. You have the money to pay for it, don't be stupid.
Posted on 1/12/16 at 9:21 pm to Jack Daniel
quote:
You can't just go to regions and say, here 1.5 B.
I would love to see the look on the faces of the people in my local community bank that I use if I did that.
Posted on 1/12/16 at 9:22 pm to deltaland
quote:
The problem is..what happens in the event of a financial crash or if you die? That money could disappear...and if you die then payments stop..you can't pass them on to your family. So if you take the annuity and die in 3 years your family is out of a lot of money. If you take the lump sum you're guaranteed 800 million.
This is simply not true.
The remaining money goes to designated beneficiaries or is disbursed to your estate.
Posted on 1/12/16 at 9:23 pm to sugar71
quote:
The remaining money goes to designated beneficiaries or is disbursed to your estate.
Are you sure? I've always heard that you can't pass on the rest of the payments if the winner were to pass away
Posted on 1/12/16 at 9:23 pm to sugar71
CDARS accounts up to $50 million dollars is FDIC insured as well.
Posted on 1/12/16 at 9:28 pm to deltaland
quote:
Are you sure? I've always heard that you can't pass on the rest of the payments if the winner were to pass away
No one would ever take the annuity otherwise.
It would be insane to take it , you die & it goes back to the State.
Check out CDARS as well if you're worried about FDIConly covering $250 k per account.
The entire $50 million would be covered in a CDARS.
Posted on 1/12/16 at 9:30 pm to deltaland
quote:
I've always heard that you can't pass on the rest of the payments if the winner were to pass away
You've heard wrong. It would be an asset of your estate.
Posted on 1/12/16 at 9:35 pm to deltaland
quote:
Are you sure? I've always heard that you can't pass on the rest of the payments if the winner were to pass away
You have a prehistoric understanding of how annuities work. I don't mean that to be an arse, because you are certainly not alone, but this is not a life annuity in the traditional sense.
30 payments are coming to you or your estate over the next 29 years, whether you're alive or not.
Posted on 1/12/16 at 9:58 pm to JohnnyKilroy
quote:
Why lose money when you don't have to?
How are you losing money if you don't invest it?
Posted on 1/12/16 at 11:45 pm to slackster
Right.
Which is why I think I would take the annuity. Following the link posted earlier with a 7% state tax, the first annuity payment would be about 15m net. Thats 40k or so a day that you could spend and be broke the day before the next payment comes the next year.
So if you plan to buy something that costs more than that 40k then I would save those daily payments up until I could afford it.
Wake up one morning and buy breakfast for all your ex co workers then you take that out the 40k. Wanna buy a new truck at about 65k then you have to not buy anything for 2 days.
But as the annuity payment grows you stay on this same schedule and you take the 5% extra and do any investing and what not.
I really dont think you have to invest it, just let it slowly roll in to you every year and kinda just live like you earned it.
Which is why I think I would take the annuity. Following the link posted earlier with a 7% state tax, the first annuity payment would be about 15m net. Thats 40k or so a day that you could spend and be broke the day before the next payment comes the next year.
So if you plan to buy something that costs more than that 40k then I would save those daily payments up until I could afford it.
Wake up one morning and buy breakfast for all your ex co workers then you take that out the 40k. Wanna buy a new truck at about 65k then you have to not buy anything for 2 days.
But as the annuity payment grows you stay on this same schedule and you take the 5% extra and do any investing and what not.
I really dont think you have to invest it, just let it slowly roll in to you every year and kinda just live like you earned it.
Posted on 1/13/16 at 12:10 am to 13SaintTiger
I have a feeling that if I were creative enough to spend that kind of money in a lifetime, I'd be dead inside of a decade.
I would take the lump sum with the goal of living off the substantial capital gains and donating generously to responsible charities....but I'm honestly not 100% sure how to actually invest that massive amount of money safely. If I didn't earn it, it's going to be that much more challenging protecting it.
This is no $300,000 inheritance. This is more money than most individuals even know how to spend.
I'd basically have to cut myself off from society including most of my family and friends. I'd definitely have to move.
I would take the lump sum with the goal of living off the substantial capital gains and donating generously to responsible charities....but I'm honestly not 100% sure how to actually invest that massive amount of money safely. If I didn't earn it, it's going to be that much more challenging protecting it.
This is no $300,000 inheritance. This is more money than most individuals even know how to spend.
I'd basically have to cut myself off from society including most of my family and friends. I'd definitely have to move.
Posted on 1/13/16 at 1:23 am to 13SaintTiger
All I'd be investing in is college girls education at various strip clubs.
This post was edited on 1/13/16 at 1:36 am
Posted on 1/13/16 at 2:12 am to Mo Jeaux
So he says don't give to family and friends , with 500 mil or so it wouldn't hurt to set up the people close to you .. Even if you take 20 mil and Give it away that would set up a lot of people for the rest of their lives , but it would have to be a one time thing .... No repeat beggers .....
Posted on 1/13/16 at 2:17 am to MightyYat
quote:
That's what I'd do. All $700 million in a basic checking account. What could go wrong?
IRS and police would just start making up reasons to freeze and seize.
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