Lottery Winning Fantasies
April 18th, 2008For some reason, I’m sitting here dreaming about what I’d do if I won the lottery. There is a lot of irony in this situation, mostly due to the fact that I don’t play the lottery but still spend lots of time thinking of what I’d do if I did. A good friend of mine, of sound financial means, plays consistently because he finds that spending $1 to dream about what he’d so with the winnings is worth it. I guess I’m taking the more frugal route and dreaming for free. :)
I spent some time looking over the net at lottery winning stories - these are mostly news stories that love to focus on the many winners that have lost their winnings. The articles would have been much more interesting if they didn’t all refer back to the same handful of people. I appreciate the point they’re trying to make, though, that small lottery winnings ($1 million dollars) doesn’t last long if you’re not prepared and that if you were unhappy before winning, money probably won’t solve your problems.
So, since I spend so much time dreaming about what I’d do, I thought I’d write it out as a handy reference in case it ever does happen. Many of the steps I have in mind coincide with the popular advice given by financial advisers.
- Re-check the winning numbers. I often misread things and would want to be sure that I was indeed seeing what I thought I was seeing. This may sounds silly, but I can see me getting swept up in the excitement and showing up at the lottery office with a non-winning ticket.
- Celebrate in silence. Perhaps I’m just overly cautious, but I wouldn’t want to tell anyone. In fact, I’d have to figure out how to not let the daughter know either as I wouldn’t want her to start dreaming up crazy ideas or spreading it to her friends. Also, I’m sure the partner and I would need to take some time to discuss the issue and make sure we’re both on similar pages.
- Find and visit a lawyer and accountant/adviser. Before doing anything, I’d want to consider all the financial, legal, and tax implications involved. I’d head to these meetings with my “wish lists” already prepared and discuss practical steps and plans.
- Take suggested actions before claiming the winnings. This includes a lot of things like unlisted numbers, setting up trusts or accounts as needed, and whatever else the accountants/advisers suggest doing in preparation for a sudden influx of money.
Now, my plan of action and my wish lists are two separate things. Since I’ve spent so much time dreaming about winning the lottery, I find it worthwhile to chart out some of those ideas. Plus, I like the idea of having this list already in order before visiting financial professionals so that we can better prepare for how lottery winnings will fit in our current plans. I know that I would want to keep the majority of my simple living practices intact, but I also know a huge influx of cash would have a very big impact on that and recognize that it may have a bigger impact on me than I want. So, my wish list is as follows, not necessarily in prioritized order.
- Secure retirement. The first thing I want covered is retirement - and lets assume this is a serious payout (more than a couple million dollars) and that retirement begins upon collection. There will be a lot of factors that affect this - such as any home purchase decisions or lifestyle changes, but I’d want to be sure that the first thing I do is ensure that this money is going to last. This includes investment planning appropriate to risk levels and return needs. I’m sure a good adviser can provide us with lots of options and scenarios to consider.
- Get the house we want. This one is a little trickier. Lately, most my lottery fantasies involve fixing the house I’m in, but I also realize that if I got a major windfall, that I’d give up on making this house what it isn’t and invest energy and money into a home with more possibility. I’m still love old houses but I’m also concerned about a few health and environmental aspects (such as lead paint) that come with them. The partner and I would have to decide on location and what we really want in a house. If we can find an old farmhouse on a huge plot of land (for farming and animal raising) then we’d probably still go that route. But, I’d also consider having our own house built as well if need be - but I’d retain the look and feel of an old house, including small rooms and functional space. Also, one of my dreams is running a farm bed and breakfast and traditional arts and crafts teaching center.
- Provide cash gifts to family. First, we wouldn’t even tell family about winning the lottery until this was decided with professional help. Would we want to do a equal amount to all family members (we’re talking siblings and parents/grandparents) or would we make this a more variable amount? The partner has two siblings and one living parent; I have a living parent, grandparent and three step-siblings. The biggest challenge for me would be that I would be comfortable providing a one-time gift to one of my siblings that I’m close to, but not the others. However, I don’t think that would go over all that well and I’d probably provide equal gifts to my other two siblings even though I don’t really have any contact with them. I also have a step-mother and I know that I would not provide her with anything, mostly due to residual frustrations over the way my father’s estate was handled when he passed away. I would struggle with gifts to my mother because of her lack of money sense and her overblown sense of entitlement.
- Provide tax-positive donations to charities. This isn’t a given and I’ll honestly say that I would be interested in this for the tax implications. I’m jut not altruistic enough to want to hand out money. The partner and I would have to discuss which organization we’d consider supporting and we wouldn’t consider any outside solicitations for funds. I can see us running into a problem if one of us doesn’t support the organizations that the other picks - we may cancel each other out and not donate anything.
- Clothes and furniture shopping. This feels like such an indulgent thought, but since I constantly struggle to buy new clothes - I’d look forward to getting a new wardrobe of clothes. I don’t imagine I’d be out buying $500 jeans, but I would finally be able to walk into my closet and honestly be happy to find something to wear. I’d also buy furniture because everything we own is a free gift from someone and I’d like to have furniture that I picked out.
- Hire personal staff. This sounds cheesy when I write it out, but I’d be all over hiring someone to clean the house and do laundry. I hate those tasks and would happily dish them out to someone else. Also, if we get the farm thing going, we’d be hiring staff to help with farm duties anyways — and thats not even based on a wealth-position, we’d just need the help getting things done (and our farm would be run as a business too). Additionally, I’ve always wanted a large family (7 kids or so) and would hopefully still continue on that path and would probably hire a care provider as well. But this person would not be a typical nanny, because whats the point of having kids if you don’t want to care for them? Instead, this would just be an extra set of hands to make daily activities easier. But then again, maybe we’d never get around to do any of this.
- Buy new vehicles. Living with old cars has it’s joys, but I’d love that I could use wealth to purchase energy efficient vehicles that would suit our needs. We’d probably still be interested in older vehicles for farm vehicles and maybe even some horse drawn equipment as well.
In all, I still like to think that I have fairly simple wishes. I would give up on improving our current house and would probably sell it “as is” because the work it needs is more than we could ever recover in renting or sale. Being able to buy a farm with a substantial amount of property (100+ acres) would be my biggest goal so that I don’t have to look over at the McMansions going in next door and can provide for our family’s food needs. Sustainability would still be a major factor and we’d be in a position to install alternative energy systems to allow us to live 100% off-grid. The bed and breakfast/traditional arts and craft school would be a wonderful thing. We could then continue working, doing what we love - working with our hands.
