Author Topic: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?  (Read 16757 times)

ixtap

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #100 on: January 22, 2020, 05:00:44 PM »
Is it just me, or has necroposting gotten more common?

It is a new year, lots of new people have found the forums. And new people tend to read through old topics. Sometimes they look at the dates, sometimes they don't.

I keep thinking I have an answer, then I remember that I don't actually play the lottery.

John Galt incarnate!

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #101 on: January 22, 2020, 05:17:19 PM »
This is just pure speculation on our parts.

I've read a lot of stories around lottery winners having their lives destroyed by the money they've won. People coming out of the woodwork looking for handouts, getting into huge lifestyle inflation issues, etc.

Do you think, on the whole, FIRE folks would be better able to handle such a sudden windfall? Particularly if it were weighted on the larger side, say $5 million plus?

Emphatically yes.

I've been here long enough to acquire understanding of  many Mu$tachian$'  thought processes, motivations, and practices.

I think each of the ones I "know", and probably most of the others, would use a large windfall so as to enhance their happiness and contentment.
« Last Edit: January 22, 2020, 05:25:53 PM by John Galt incarnate! »

bacchi

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #102 on: January 22, 2020, 05:17:59 PM »
Is it just me, or has necroposting gotten more common?

It is a new year, lots of new people have found the forums. And new people tend to read through old topics. Sometimes they look at the dates, sometimes they don't.

I keep thinking I have an answer, then I remember that I don't actually play the lottery.

Eh, they're mostly spammer accounts with a one or two line response meant to legitimize the account before the links come out.

ixtap

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #103 on: January 22, 2020, 05:20:57 PM »
Is it just me, or has necroposting gotten more common?

It is a new year, lots of new people have found the forums. And new people tend to read through old topics. Sometimes they look at the dates, sometimes they don't.

I keep thinking I have an answer, then I remember that I don't actually play the lottery.

Eh, they're mostly spammer accounts with a one or two line response meant to legitimize the account before the links come out.

Looks like the cynic would win the bet for this thread.

LetItGrow

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #104 on: January 22, 2020, 05:35:14 PM »
Is it just me, or has necroposting gotten more common?

It’s fun to see even experienced members sometimes miss the dates and respond to the OP. Not in this case of course.

2sk22

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #105 on: January 23, 2020, 05:21:42 AM »
Is it just me, or has necroposting gotten more common?

It’s fun to see even experienced members sometimes miss the dates and respond to the OP. Not in this case of course.

No disagreement but this was actually an interesting discussion. Glad it got exhumed - its given me a lot to think about today :-)

cowpuncher10

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #106 on: January 23, 2020, 07:53:00 AM »
As far as playing the lottery I can't think of another way to spend $2 that lifts my spirits or gets me as excited any other way. I rarely play, but when I do it's exciting to think about being able to check a number of my long term material and savings goals off immediately. After that, I would be an enormous contributor to local women's shelters/foster homes because of the need.

Would I handle it better? Sure. Would I spend more? Oh yes. Most of my spending would be one time expenditures in the first 6 months then would ratchet down to maybe 2-3 times what I spend now....Just want some land and solitude. I would be healthier with time to meal plan and exercise. I would be enabled to be a better father by spending more time with my kids teaching them about things outside of books. I would be enabled to be a better husband by actively listening to my wife more frequently without the looming stress or fear of what was happening the next day with work...

Also, I would set up a scholarship for people who most closely resemble myself. No students with F's or A's would be allowed to apply. The average joe B's and C's baby. It would include full tuition books and a 12 pack of Busch Lite (Latte) a week. All cousins, nieces, and nephews would have their student loans paid off in full or have 529s established to fund their schooling pending certain objectives are met.

I do genuinely believe it would just enable me to be a larger contributor to society, a better husband/father/friend, and be happier by being able to pursue the things that matter most to me personally.

nereo

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #107 on: January 23, 2020, 09:08:53 AM »
...
Also, I would set up a scholarship for people who most closely resemble myself. No students with F's or A's would be allowed to apply. The average joe B's and C's baby. It would include full tuition books and a 12 pack of Busch Lite (Latte) a week. All cousins, nieces, and nephews would have their student loans paid off in full or have 529s established to fund their schooling pending certain objectives are met.


You've inadvertently hit on a topic of recent discussion amongs my cohort.  There's a lot of scholarships and advantages given to the top 5% of students, and also a lot of support for those from underprivileged and struggling groups. But in the wide middle there's no much.  While a merit-based reward system churns out some great leaders (and has been the core focus of higher-education funding for the last few decades) the future 'middle managers' are kind of flopping around.  The challenge of course is that there are way more B and C-level students than cum laude indivduals, and would take far more resources and money to lift those up.  But that's exactly what we used to do by direct-funding rather than the merit-based grants and scholarship model we've increasingly moved toward.

eljefe-speaks

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #108 on: January 23, 2020, 12:49:40 PM »
What would I do if I won a big lottery?

7)  Oh, and require one piece of quality art...


Step 7 could get tricky. What happens when a young starving artist gives you a urinal on a pedestal? lol I would love so see the arguments play out in court.

But, seriously, really cool idea here.




Omy

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #109 on: January 23, 2020, 01:09:37 PM »
With a huge lottery win, I would upgrade housing a bit...bigger, nicer, in a gated community. I would pay for weekly lawn and pool maintenance, house cleaning, and possibly a personal chef. I would travel more (and slightly more extravagantly) than I do now. I would stop worrying about health insurance as I could self insure for any catastrophe. I would buy a nice tesla and whatever vehicle DH wanted.

I would give $30k/yr to each of my 12 closest relatives - as long as they continued to be nice upstanding members of society.  I would give a lot to charity and political candidates who I liked. I would take family and friends on nice vacations. I would put $10 million in a very safe savings vehicle so that I would still have a little something if the SHTF and I managed to spend, give away, or lose the rest.

Fishindude

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #110 on: January 23, 2020, 03:04:52 PM »
I would go door to door to all of the people in my rural neighborhood offering ridiculous sums of money for them to sell out and leave, then bulldoze and bury all the houses and buildings, acquire a very large piece of land and let it all go back to nature, plant trees, wildlife habitat, dig lakes, etc.   About 2500 contiguous acres in the midwest would be pretty sweet.

Or for a whole lot less effort, buy a big ranch out west.

GettingClose

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #111 on: January 23, 2020, 03:49:40 PM »
This guy, a huge winner in a UK lottery last December, seems to be handling it well:

https://www.dailymail.co.uk%2Fnews%2Farticle-7799685%2FBuilder-won-105m-Lottery-jackpot-working-free.html

"A builder who became a multi-millionaire after bagging a £105m Euromillions jackpot has told his customers he will their jobs for free - as an early Christmas present."

"Mr Thomson, pictured with friend Neil Peet, was seen carrying boxes and driving in his old van. He has been completing building jobs for his customers for free, so that they have extra cash to spend on Christmas"

talltexan

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #112 on: January 24, 2020, 09:11:04 AM »
I love every part of your plan! Great ideas!

I love the idea of trusts that protect the interests of people trying to get a start in life or reboot their life. Sort of short circuits the capitalist mechanism a little bit. Profits are good and necessary but there is so much in our country that needs doing that isn't b/c it doesn't generate profits directly or its too expensive or it endangers some cash cow profit machine (college textbooks for example).

Thinking of free childcare or free healthcare.

I wonder about just identifying other friends--perhaps emphasis could be on single parents--and paying for their childcare.

Roadrunner53

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #113 on: January 24, 2020, 10:52:04 AM »
A fool and his money soon part.

How many times have we all read about people who win the lotto and have to blow the money faster than they got it. Mansions, sports cars, jewelry, vacations all over the world flying on private jets. Then all the friends and relatives who come out of the woodwork that beg for money. People offering investments that turn out to be like buying the Washington bridge.

If it were me, I would invest the money and try to live off the interest it generated. Put it into something so secure that I would never run out of money. Learn to say NO to friends and relatives. Resist the urge to buy frivolous things that drain the bank account. Mansions are bad news! It is a money sucking thing that can bring a person down. To maintain upkeep, it needs maids, landscapers, pool maintenance, not to mention if they have horses, stable people, training people. Taxes on the mansion, cars. UGH!

If people lived within their means, they could still have a great life and could travel, have a nice house and a new car and hang onto their millions!

Wrenchturner

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #114 on: January 24, 2020, 11:05:53 AM »
A fool and his money soon part.

How many times have we all read about people who win the lotto and have to blow the money faster than they got it. Mansions, sports cars, jewelry, vacations all over the world flying on private jets. Then all the friends and relatives who come out of the woodwork that beg for money. People offering investments that turn out to be like buying the Washington bridge.

If it were me, I would invest the money and try to live off the interest it generated. Put it into something so secure that I would never run out of money. Learn to say NO to friends and relatives. Resist the urge to buy frivolous things that drain the bank account. Mansions are bad news! It is a money sucking thing that can bring a person down. To maintain upkeep, it needs maids, landscapers, pool maintenance, not to mention if they have horses, stable people, training people. Taxes on the mansion, cars. UGH!

If people lived within their means, they could still have a great life and could travel, have a nice house and a new car and hang onto their millions!

It's a sampling bias.  Most people that are sensible with their money don't buy lottery tickets.  This means that winners are usually not sensible with their money.  So they tend to piss it away. 

There are exceptions though.

solon

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #115 on: January 24, 2020, 11:08:29 AM »
Does anyone know of a collection of true horror stories of people who won the lottery and it destroyed their lives?

It might also be fun to read some stories of people whose lives were changed for the good.

talltexan

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #116 on: January 24, 2020, 11:57:04 AM »
They crop up on news/entertainment sites every now and then.

Some of the tragedies even occur to people who seem like they ought to know better. A small-business man--self-made millionaire--in Florida won, but lost a son to drug-addiction and committed suicide. It's not just you, but the people around you who can become victims.

iris lily

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #117 on: January 24, 2020, 01:31:10 PM »
Is it just me, or has necroposting gotten more common?

It is a new year, lots of new people have found the forums. And new people tend to read through old topics. Sometimes they look at the dates, sometimes they don't.

I keep thinking I have an answer, then I remember that I don't actually play the lottery.

Eh, they're mostly spammer accounts with a one or two line response meant to legitimize the account before the links come out.

Well maybe.

But the new year always brings those resolutions. You know them: lose weight.Learn a foreign language.  Get a handle on finances hence MMM newbies.

Roadrunner53

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #118 on: January 25, 2020, 05:46:02 AM »
A fool and his money soon part.

How many times have we all read about people who win the lotto and have to blow the money faster than they got it. Mansions, sports cars, jewelry, vacations all over the world flying on private jets. Then all the friends and relatives who come out of the woodwork that beg for money. People offering investments that turn out to be like buying the Washington bridge.

If it were me, I would invest the money and try to live off the interest it generated. Put it into something so secure that I would never run out of money. Learn to say NO to friends and relatives. Resist the urge to buy frivolous things that drain the bank account. Mansions are bad news! It is a money sucking thing that can bring a person down. To maintain upkeep, it needs maids, landscapers, pool maintenance, not to mention if they have horses, stable people, training people. Taxes on the mansion, cars. UGH!

If people lived within their means, they could still have a great life and could travel, have a nice house and a new car and hang onto their millions!

It's a sampling bias.  Most people that are sensible with their money don't buy lottery tickets.  This means that winners are usually not sensible with their money.  So they tend to piss it away. 

There are exceptions though.

Don't agree Wrenchturner. We buy them occasionally for birthdays, holidays, anniversaries for entertainment purposes. We don't get carried away with it. If we won, we would make the money last and I wouldn't have a problem living in a mobile home and driving an older car. I would rather be known as that old lady who lives in the trailer park than the rich old lady in the mansion that gets robbed. But yes, there are fools who I have seen at the counter buying lotto tickets and spend their last penny on them. Stupid.

PhilB

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #119 on: January 25, 2020, 06:02:19 AM »
A fool and his money soon part.

How many times have we all read about people who win the lotto and have to blow the money faster than they got it. Mansions, sports cars, jewelry, vacations all over the world flying on private jets. Then all the friends and relatives who come out of the woodwork that beg for money. People offering investments that turn out to be like buying the Washington bridge.

If it were me, I would invest the money and try to live off the interest it generated. Put it into something so secure that I would never run out of money. Learn to say NO to friends and relatives. Resist the urge to buy frivolous things that drain the bank account. Mansions are bad news! It is a money sucking thing that can bring a person down. To maintain upkeep, it needs maids, landscapers, pool maintenance, not to mention if they have horses, stable people, training people. Taxes on the mansion, cars. UGH!

If people lived within their means, they could still have a great life and could travel, have a nice house and a new car and hang onto their millions!

It's a sampling bias.  Most people that are sensible with their money don't buy lottery tickets.  This means that winners are usually not sensible with their money.  So they tend to piss it away. 

There are exceptions though.

Don't agree Wrenchturner. We buy them occasionally for birthdays, holidays, anniversaries for entertainment purposes. We don't get carried away with it. If we won, we would make the money last and I wouldn't have a problem living in a mobile home and driving an older car. I would rather be known as that old lady who lives in the trailer park than the rich old lady in the mansion that gets robbed. But yes, there are fools who I have seen at the counter buying lotto tickets and spend their last penny on them. Stupid.
I think the key thing is that sensible people don't buy lots of lottery tickets so the overall distribution skews dumb.

Roadrunner53

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #120 on: January 25, 2020, 09:11:54 AM »
One day I was attempting to buy a few scratch off tickets and there was a woman in front of me buying tickets. I knew who she was and knew she came from a very poor family. She was buying so many tickets it made my head spin. She was rattling off different combo's she wanted on her tickets. I had never heard of the lingo she was talking. I still don't. Now, I know if she won big, she would be broke in no time.


Wrenchturner

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #121 on: January 25, 2020, 09:33:19 AM »
A fool and his money soon part.

How many times have we all read about people who win the lotto and have to blow the money faster than they got it. Mansions, sports cars, jewelry, vacations all over the world flying on private jets. Then all the friends and relatives who come out of the woodwork that beg for money. People offering investments that turn out to be like buying the Washington bridge.

If it were me, I would invest the money and try to live off the interest it generated. Put it into something so secure that I would never run out of money. Learn to say NO to friends and relatives. Resist the urge to buy frivolous things that drain the bank account. Mansions are bad news! It is a money sucking thing that can bring a person down. To maintain upkeep, it needs maids, landscapers, pool maintenance, not to mention if they have horses, stable people, training people. Taxes on the mansion, cars. UGH!

If people lived within their means, they could still have a great life and could travel, have a nice house and a new car and hang onto their millions!

It's a sampling bias.  Most people that are sensible with their money don't buy lottery tickets.  This means that winners are usually not sensible with their money.  So they tend to piss it away. 

There are exceptions though.

Don't agree Wrenchturner. We buy them occasionally for birthdays, holidays, anniversaries for entertainment purposes. We don't get carried away with it. If we won, we would make the money last and I wouldn't have a problem living in a mobile home and driving an older car. I would rather be known as that old lady who lives in the trailer park than the rich old lady in the mansion that gets robbed. But yes, there are fools who I have seen at the counter buying lotto tickets and spend their last penny on them. Stupid.
I think the key thing is that sensible people don't buy lots of lottery tickets so the overall distribution skews dumb.
This.  I don't buy lottery tickets at all, I know I could and it could be "fun", but it's not my style of fun and I already have an addictive personality. 

I am increasingly convinced that people think their finances are magical.  That's why they spend money impulsively and buy lottery tickets with "rituals", using magic numbers or waiting for the stars to align.  It's kind of sad actually. 

But then you have situations like this:

They crop up on news/entertainment sites every now and then.

Some of the tragedies even occur to people who seem like they ought to know better. A small-business man--self-made millionaire--in Florida won, but lost a son to drug-addiction and committed suicide. It's not just you, but the people around you who can become victims.

Sometimes strife is better than plenty.  It's not a coincidence that mankind mostly transitioned from starvation to obesity, with little time spent in between.

Villanelle

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #122 on: January 25, 2020, 10:26:51 AM »
I think a lot of the more modest winners (say, >%5million) also fall into a mindset where they thing they are rich (and they are).  But they equate rich with "can afford anything".  But they only walk away with $2m (taxes and lump sum).  If they drop $750k on a house and even "just" $150,000 on a couple cars, it's nearly half gone before they've even lived. 

When you look at it at that, it is easy to see how it can all be gone so quickly.  All the see is that they are rich and they assume that means they'd don't have to pay attention, so they don't notice the balance dwindling. 

Really, $2m isn't that much.  I mean, of course it is, but at 4% it's $80k/year.  If you start with very few assets (so still paying rent or a mortgage, need a buy a car, etc.), that's only a solidly middle or upper middle class life.   Which is of course sufficient, but not for someone who feels they are now rich and wants to live accordingly. 

If I won $2m (walk away with $) tomorrow, my life would change very little precisely because long term, it's $80k/yr, in my mind.  Husband would still plan to retire from them military at the same time (in a few years).  Any thoughts of a short second career would likely be out, but that and maybe being able to afford to live in our dream area (but probably still not) would be the only huge changes.  Likely nicer presents for everyone at Christmas. 

Because while it would be incredible, it isn't enough money to bump us up into a new lifestyle, really. 

Omy

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #123 on: January 25, 2020, 10:34:18 AM »
Agreed. Anything under $5M or so wouldn't really be life-changing. It would enhance my life and give me more opportunities to give.

Omy

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #124 on: January 25, 2020, 10:35:38 AM »
...and we don't even play until we have the "odds" to do so.

ender

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #125 on: January 25, 2020, 12:11:32 PM »
I've been thinking about this thread over the last few days.

I think if we won the lottery, we'd absolutely buy a different house than what we are planning on buying.

We value things that cost more, even if they don't have a clear conspicuous spend associated with them (aka not moving up from 2k sqft to 5k sqft) - for example, the location of our dream house is an acreage like place. This is very expensive in cities, so either we'd buy a significantly more expensive home location in the area we are now or use the luxury of not needing to sustain income the same to move elsewhere.

But the actual house itself might be the same as one we otherwise would buy. Likewise for cars; we might get a higher trim level but wouldn't necessarily get any different base vehicle type. Maybe buy slightly higher quality clothing, etc.

I wonder how many lottery winners in the FIRE type of camp would do similar. Not really adding to lifestyle necessarily but improving some pieces of our lives.

martyconlonontherun

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #126 on: January 25, 2020, 12:20:58 PM »
If it's less than 10m, my life wouldn't change that much besides a slightly bigger paid off house.

If you are talking 200m+, I would probably take my closest 20 family members and friends and find a systematic way to pass along 50-100k a year to them either directly or for paid for dinners and vacations. The goal would be to keep from losing relationships with those that matter. That wouldn't even hit the 4% rule.

Roadrunner53

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #127 on: January 25, 2020, 04:43:35 PM »
So many people in sports are given millions of dollar in contracts. Automatically they think they can go out and buy mansions, blinged out cars, private jets, buy everything in sight. How do they not think this money might run out? Time after time we read about famous sports stars that go nuts and buy so much stuff they go broke! If you were brought up poor, wouldn't  you examine this new money and think, how long will it last? How much can I spend annually and will it last a lifetime?

Yes, let us buy tigers and crazy stuff to impress our friends. That is just DUH, DUH, DUH!

Just Joe

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #128 on: January 27, 2020, 10:30:20 AM »
If we won $2M we'd pay off the rest of the mortgage - or not, and invest it.

One time things: we'd hire out some maintenance tasks to our property. In real life we'll do those things ourselves but it would be nice to just have it done for us.

We would also pay for minor upgrades like a light switch near the hallway. Whoever wired our house should have installed several more light switches for common areas that have more than one entrance.

I don't think life would change much. Maybe more regular modest vacations. We tend to skip a year. We keep life cheap by not traveling much.

We would not be the types to party it all away or buy mega-expensive depreciating assets like supercars or RVs or boats that have high maintenance or storage fees.

KBCB

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #129 on: January 27, 2020, 10:50:41 AM »
This has always fascinated me. I watched a program years ago and it was amazing. I clearly remember an old guy who delivered pizzas and lived in the pizza owners garage because he spent all the money so his family wouldn't get any. He was also poisoned like twice by family. Crazy stuff.

talltexan

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #130 on: January 27, 2020, 12:50:01 PM »
All you guys talking about buying houses.

If I had $10,000,000, I'd RENT EVERYTHING. The purpose of owning is to save money. I'd want to be able to pick up and leave paying just a few bucks for someone to throw out all my stuff, then settle in at the new place with all new furniture.

Just Joe

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #131 on: January 27, 2020, 01:28:52 PM »
I want to travel a little but I also want a home base. I was a military nomad earlier in my life. Just because I won the lottery would not convert me back to a nomad/gypsy.

Boofinator

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #132 on: January 27, 2020, 01:40:59 PM »
So many people in sports are given millions of dollar in contracts. Automatically they think they can go out and buy mansions, blinged out cars, private jets, buy everything in sight. How do they not think this money might run out? Time after time we read about famous sports stars that go nuts and buy so much stuff they go broke! If you were brought up poor, wouldn't  you examine this new money and think, how long will it last? How much can I spend annually and will it last a lifetime?

Yes, let us buy tigers and crazy stuff to impress our friends. That is just DUH, DUH, DUH!

In my personal experience, there is a mental leap between not going into debt and investing for the future. If I had to make a guess, that mental leap generally occurs after an athlete's prime earning years.

ETA: Rereading my comment, I didn't mean to imply this mental leap was unique to athletes. Only that athletes are in the unfortunate position to have their prime earning years prior to the typical age at which this mental leap occurs.
« Last Edit: January 27, 2020, 02:32:46 PM by Boofinator »

nereo

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #133 on: January 27, 2020, 02:27:36 PM »
So many people in sports are given millions of dollar in contracts. Automatically they think they can go out and buy mansions, blinged out cars, private jets, buy everything in sight. How do they not think this money might run out? Time after time we read about famous sports stars that go nuts and buy so much stuff they go broke! If you were brought up poor, wouldn't  you examine this new money and think, how long will it last? How much can I spend annually and will it last a lifetime?

Yes, let us buy tigers and crazy stuff to impress our friends. That is just DUH, DUH, DUH!

 
In my personal experience, there is a mental leap between not going into debt and investing for the future. If I had to make a guess, that mental leap generally occurs after an athlete's prime earning years.
It doesn’t really surprise me.  Many of these athletes are 19 - 23 years old when signing huge contracts.  They weren’t paid in college (if they went) and are unlikely to have earned more than $30k in their life. $5MM is as abstract a concept to them as the distance from Mars to Earth is to most of us.

Add to this that most athletes are highly confident in their abilities (sports select for it, actually), and most assume they will keep getting these paychecks for years and years.  Everyone thinks they will last longer than the league average (which is ~3 years in the NFL, fwiw).  Then once they’ve past their prime they discover that they have few life skills outside of their given sport.  They’re in their late 20s/early 30s with no work history and no specialized skills.

I wish each league would be required to pay a much larger pension to all their players. Take 25% of their headline contract number and put it in a fund.  But the player’s union won’t go for it.  Shame.

Omy

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #134 on: January 28, 2020, 06:34:20 AM »
Interesting. They say the brain isn't fully developed until your mid 20s, so that makes a lot of sense.

talltexan

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #135 on: January 28, 2020, 08:47:42 AM »
I thought I was smart.

I graduated with a Ph.D. in 2008, and went through a smaller version of this (my income 4X'd), financing a Toyota Camry. Call it a Mustachian spending spree.

nereo

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #136 on: January 28, 2020, 09:49:52 AM »
This brought to mind an humorous anecdote: When Chris Cooley (TE for Washington DC) signed his initial contract there was a $2(?)MM signing bonus.  So he did what he has always done with checks and tried to deposit it at the ATM and was surprised that one could not deposit a check larger than $10,000 in an ATM.  Then he went inside the bank and asked that he get a 'small' amount of $100k of the total $2MM in cash to take with him - and was again surprised that the bank couldn't do that he could not do that until the check cleared, and that this small local bank was not in the habit of giving out $100,000 in $20 bills, and didn't have that much on hand.

talltexan

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #137 on: January 30, 2020, 12:46:36 PM »
Do they even do checks that big? When do you have to wire the money because there's so much of it?

Capsu78

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #138 on: January 30, 2020, 01:19:36 PM »
I hit the power ball last night!  Cleared $4 on a $20 ticket.

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #139 on: January 30, 2020, 01:52:16 PM »
Even if I only won a small amount, I would still want the giant check that big winners get.

nereo

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #140 on: January 30, 2020, 02:25:51 PM »
Do they even do checks that big? When do you have to wire the money because there's so much of it?
Apparently they do - and I had to go back and re-read the story... it was $9MM, not $2MM. 
It was a running joke for a while in the DC area - I remember someone hand-taped a note to the side of the ATM that siad something to the effect of "sorry, but we are currently unable to cash cheques from the NFL in excess of a million dollars"

EliteZags

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #141 on: January 31, 2020, 04:46:10 PM »
Quote
Many of these athletes are 19 - 23 years old when signing huge contracts.  They weren’t paid in college

I remember when my mind was young and innocent and assumed this
« Last Edit: January 31, 2020, 04:49:47 PM by EliteZags »

nereo

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Re: Lottery winnings ruin lives. Do you think FIRE folk would handle it better?
« Reply #142 on: January 31, 2020, 05:47:57 PM »
Quote
Many of these athletes are 19 - 23 years old when signing huge contracts.  They weren’t paid in college

I remember when my mind was young and innocent and assumed this
Having been there, I can attest that it is still true.  NCAA athletes are taken advantage of and monetized in a way few other workers can be.

 

Wow, a phone plan for fifteen bucks!