Saturday, May 29, 2010

How I Would Spend a Major Lottery Jackpot

"I spent 90% of my money on women and drink. The rest I wasted." -- George Best

Periodically, I buy a lottery ticket when the cash jackpot exceeds $100 million. Even with such a large jackpot, I know that hoping for a lottery win is a very, very bad retirement plan. The odds of winning a Mega Millions jackpot is 1:175,711,536 and the expected return on a $1 lottery ticket is about $0.60 for a $100 million cash jackpot.

Basically, I like to think of a lottery ticket as entertainment. For a few hours, I have a chance to become an instant multi-millionaire. Also, for entertainment purposes, I've thought about what I might do if we did win a major lottery jackpot.

For reference, my spouse and I have agreed a winning jackpot would be split into three parts, one for each of us and the third portion would go into savings. Here's what I would do with my part:
  • Give my mom private nursing care in a place close to us. I would pay cost of a home close by, the moving costs, and private nursing care so that my mom could be comfortable and closer to us. While she is lives in a good nursing home near my sister, I think she would appreciate her own house and private nursing staff. Unfortunately, she doesn't have sufficient funds to cover the latter.

  • Buy fractional ownership in a private jet. Since 9/11, using commercial airlines has become much more tedious, due to restrictions, and security precautions. I just want to be able to show up at the airport and get on my plane immediately. Having a chartered private jet seems like a good way to achieve my goal.

  • Have a hired driver. One of the best things about living in Japan was not owning a car. The public transportation system allowed us to go anywhere for a reasonable cost. In the U.S., my initial solution would be to hire a limo. I would start with long trips and special events. If I liked it enough, I would hire a driver to handle all my transportation.

  • Purchase VIP seating at various events. I'd like to attend events like the Super Bowl, World Series, hit Broadway shows, etc. at least once. It would be great to get the "best seats" and not worry about the cost.

  • Charitable contributions. I would make a large one time contribution to my church and my school. I would also make larger regular contributions to various charities we've supported in the past. Finally, I would make some large contributions to charities in which friends have direct involvement.

  • Invest in a business, stocks or real estate. Although the third portion will likely cover investments, I would also like to use part of my funds to try a franchise business, rental real estate, or managing my own portfolio.
  • If I won a lottery, I would not buy a new car, a new house, a vacation home, or a new wardrobe. For now, I don't want any more "stuff." As for travel, I expect my spouse would spend part of her portion on that, and I'll get to tag along, just as she would tag along for my VIP seating :-) Finally, the money for our daughter's college education would come from the third portion, which goes into family savings.

    UPDATE: In the evening after publishing this post, I came up with a few more spending ideas. I will publish the addtional ideas next week, since I don't expect to win anytime soon;-)

    For more on Reflections and Musings , check back every Saturday for a new segment.

    This is not financial advice. Please consult a professional advisor.

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