Tonight on HGTV

[BTDretire]

Lottery winners, spend their winnings on a new home.
On two of the shows, the people won $1 million.
After taxes maybe have $700,000 left, I'll bet they spend
more than $400,000 on their new house.
 I'd love to know the networth of these people before they won.

[Metric Mouse]

Meh. 4% of a 700k stash should do ok with that. $1500 a month on the payment after 20% down leaves over $800 a month for groceries and other essentials.  Might have to keep their jobs for a few years, but not really a train wreck.

[Bracken_Joy]

Probably a good idea to lock the money up to be honest. Most lottery winners are broke very quickly. Family comes for gifts, they do lavish vacations, and all of a sudden, poof it's all gone.

Hopefully in a house it's a little more insulated form the usual lottery-winners pitfalls.

[Le Poisson]

I wonder what my family would say if I shrugged and said "It's locked into a 7 year bond. Come see me in 8 years" I wonder if everything would be forgotten in the interim.

[Metric Mouse]

I wonder what my family would say if I shrugged and said "It's locked into a 7 year bond. Come see me in 8 years" I wonder if everything would be forgotten in the interim.

Hopefully they'd remind you that returns on bonds are terrible, and you'd have been much better off with a low-cost index fund.

[Le Poisson]

I wonder what my family would say if I shrugged and said "It's locked into a 7 year bond. Come see me in 8 years" I wonder if everything would be forgotten in the interim.

Hopefully they'd remind you that returns on bonds are terrible, and you'd have been much better off with a low-cost index fund.

They probably would because then its more liquid and they could continue to beg for cash through the term.

[Dezrah]

I've seen the show.  Not a bad show as far as these things go.

I think the show is sponsored and/or produced by one of the national lottery brands.  The show is literally a giant advertisement for the lottery.

[fishnfool]

I cut my cable over a year ago, I do miss HGTV though. But not enough to pay the ridiculous price of cable or satellite.

Most lottery winners end up broke but they must have a good time blowing their winnings. ..lol

[Metric Mouse]

I wonder what my family would say if I shrugged and said "It's locked into a 7 year bond. Come see me in 8 years" I wonder if everything would be forgotten in the interim.

Hopefully they'd remind you that returns on bonds are terrible, and you'd have been much better off with a low-cost index fund.

They probably would because then its more liquid and they could continue to beg for cash through the term.

Win/win!

[VoteCthulu]

I really like the lottery, and anything else that acts as a tax on ignorance. I juse wish they used all of the proceeds to fund education, just like they use the tobacco taxes to fund anti-smoking ads.

[Laura33]

I really like the lottery, and anything else that acts as a tax on ignorance. I juse wish they used all of the proceeds to fund education, just like they use the tobacco taxes to fund anti-smoking ads.

Even that's not a cure-all -- I found a chart several years ago that showed that as the amount of lottery money going toward education increased, the amount of "general fund"/taxpayer funding decreased.  Which is fine if your goal is to transfer the cost of the state budget to people who are bad at math, but it didn't exactly meet the promise of "improve education funding!" that was used to sell the lottery to voters in the first place.

FWIW, I actually did the math once, and the "real" take-home from the lottery is more like 30-35%.  Remember that the advertised jackpot is the annuity value (the total amount you'd receive over the next 25-30 years); the cash value tends to be more like 55% of that.  So say you win $10M.  First you take home say $5.5M.  Then you have to pay federal taxes on that (and all but the first @$400-450K would be at 39.6%); then most people have to pay state taxes (mine are at 9%), and in the end that "$10M jackpot!" is about $3M.  Not that that's anything to sneeze at, of course. :-)  But it's not exactly the $10M that the ads imply.

[dougules]

I really like the lottery, and anything else that acts as a tax on ignorance. I juse wish they used all of the proceeds to fund education, just like they use the tobacco taxes to fund anti-smoking ads.

Let's use lottery income to fund math education.  Then we can watch the oscillation as math education and the lottery income for that math education feed back on each other. 

[libertarian4321]

I cut my cable over a year ago, I do miss HGTV though. But not enough to pay the ridiculous price of cable or satellite.

Most lottery winners end up broke but they must have a good time blowing their winnings. ..lol

Lottery winners are no different than other people who suddenly find themselves with scads of money that they never had before (e.g. professional athletes).

A fair percentage of them are like most Americans- they have no financial skills.  They blow through the money and end up broke in what seems like a ridiculously short period of time.

Of course, if you had a lottery winner who had money saved/invested before hand, it would probably turn out differently.

However, I suspect that most people who are good with money DO NOT PLAY the lottery, and therefore have a very low chance of being hailed as the "Next PowerBall MILLIONAIRE!" (or whatever the sales pitch is- I have no idea- I bought one scratch off ticket in 1992, which is my entire experience with lotteries).