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re: "Don't make investments"- Mark Cuban on advice to powerball winner
Posted on 1/12/16 at 3:47 pm to slackster
Posted on 1/12/16 at 3:47 pm to slackster
You can have an extravagant home and vacations homes and pay for the maintenance/taxes out of the interest of the money you invest.
I understand Cuban is trying to be helpful but it's just rather paternalistic, to be honest.
I understand Cuban is trying to be helpful but it's just rather paternalistic, to be honest.
0
Posted on 1/12/16 at 3:47 pm to The Cool No 9
quote:
You're a billionaire.
No, you aren't. You might have a Net Worth of the jackpot amount less your debt, but only until you cash in the ticket.
After taxes, in the State of Louisiana, you'd net $505,920,000. Even in a state with no income tax, you'd have $561,720,000.
Nothing to sneeze at, but a long way from being a billionaire.
Posted on 1/12/16 at 3:49 pm to kilo1234
You're halfway there. That's pretty fricking close, all things considered. 
Posted on 1/12/16 at 3:49 pm to Topwater Trout
quote:
yeh I have always been an advocate of the lump sum...with that much money it may be easier to take the annuity.
It just depends on what sort of income needs you will have and what your risk tolerance would be.
For those that want to stay safe, you could use $12M per year with a 5% COLA to "live on" and reinvest the balance of the annuity payment at 3% per year where your balance grows to $998.8M in 30 years.
If you take the lump sum ($930M), you'll have roughly $528M after federal and state taxes. Intuition would say that $528M @ 3% is more than the $12M you'd use to live on, so that money would grow indefinitely, but that isn't true if you need a 5% COLA adjustment annually. In fact, that lump sum would top out at $543M in 7 years or so and then would be headed lower thereafter. After 30 years you'd only have $188.5M left.
Obviously a higher return would make the lump sum more attractive, but assuming the annuity payments were a sure thing, I don't see any reason to take the risk.
Posted on 1/12/16 at 3:58 pm to kilo1234
quote:
After taxes, in the State of Louisiana, you'd net $505,920,000. Even in a state with no income tax, you'd have $561,720,000
Assuming a $930M lump sum we can basically ignore the insignificant taxes owed on the way up the marginal tax brackets and go straight to the 39.6% federal and 6% state brackets. You'd owe $368.28M in federal taxes - a number you've illustrated correctly. However, I believe your state taxes are off. In LA you can deduct the amount of federal taxes you've paid, so you reduce the $930M to $561,720,000 and you pay the 6% state tax on that amount - $33,703,200 - so you're net is $528,016,800.
It is absurd to think that you made a common error that would have resulted in a $22M over payment to the state of Louisiana. That is the kind of thing that puts this amount of money into perspective.
Posted on 1/12/16 at 3:59 pm to Walking the Earth
quote:
You're halfway there. That's pretty fricking close, all things considered.
You're almost as close to being broke as you are to being a billionaire, although that might be the most pessimistic view you could possibly take.
Posted on 1/12/16 at 4:07 pm to The Cool No 9
quote:
You're a billionaire.
Thinking like this is how you turn 500,000,000 into 500.
Posted on 1/12/16 at 4:12 pm to 13SaintTiger
That amount of money would make you the second wealthiest person on Shark Tank.
My first move would be to call Cuban and tell him to replace Lori with me.
My first move would be to call Cuban and tell him to replace Lori with me.
Posted on 1/12/16 at 4:12 pm to JohnnyKilroy
quote:
You're a billionaire.
Don't get wrapped up in the label. It's more money than most people could even begin to use, and that's all that matters, whether $500MM or double.
Posted on 1/12/16 at 4:13 pm to UpToPar
quote:
If you win the lottery, you pay people much smarter than yourself to invest your money for you.
You'd also be a prime target to get swindled
I wouldn't invest in anything aggressive at all because why the hell would you?
Posted on 1/12/16 at 4:20 pm to Geauxld Finger
quote:
Invest in some property
Right. Because property taxes are fricking awesome.
Posted on 1/12/16 at 4:23 pm to kilo1234
quote:
Even in a state with no income tax, you'd have $561,720,000.
<----- lives in no income tax state.
Posted on 1/12/16 at 4:25 pm to Powerman
quote:
Right. Because property taxes are fricking awesome.
Geez, y'all need to get realistic. If you're going to invest or get into business, there's always the cost of doing business.
Posted on 1/12/16 at 4:26 pm to kilo1234
quote:
No, you aren't. You might have a Net Worth of the jackpot amount less your debt, but only until you cash in the ticket.
After taxes, in the State of Louisiana, you'd net $505,920,000. Even in a state with no income tax, you'd have $561,720,000.
Nothing to sneeze at, but a long way from being a billionaire.
Many of the 536 US " billionaires" according to Forbes (optimistic estimates ) list probably don't have $ 561 million dollars cash on hand .
Only 5000 Households in 2014 are above $100 million networth.
In other words, 500 million cash is a lot of money.
Posted on 1/12/16 at 4:31 pm to el Gaucho
quote:I have to reattach my wheels first. Disconnect the sewerage and electricity. Split the double wide and put plastic cover to protect my belongings. Call the tow company and be right there. All I need is directions.
I'm gonna buy a trailer park and let all my friends live there
Posted on 1/12/16 at 4:33 pm to Teton Tiger
A bunch of my money would be in triple tax free muni bonds dealing with infrastructure and I'd ladder it so I get paid monthly.
Posted on 1/12/16 at 4:36 pm to UpToPar
quote:
If you win the lottery, you pay people much smarter than yourself to invest your money for you.
Because no smart investor has ever been wrong or embezzled money.
Posted on 1/12/16 at 4:36 pm to slackster
quote:
$1,375,000 a year to manage $550M. I promise I wouldn't even take on another client.
You could hire 5 guys and pay each over $200,000 per year just to watch your money and watch each other. Maybe not a bad way to go.
Posted on 1/12/16 at 5:01 pm to 13SaintTiger
frick Cuban, I'm gonna try to get a guest spot on shark tank and show that lil bitch how it's done
Posted on 1/12/16 at 5:59 pm to UncleRuckus
Don't give money to your family. What a shitty thing to imply. Winning the lottery doesn't make you special. Your family living happily for the rest of their lives is special.
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