I was watching something on TV the other day about people who won the lottery. I dont have the statistics in front of me, but I've read that a large amount of lottery winners go broke or bankrupt within 5 years of winning their millions. While watching this program, I can see why!
This got Todd and I to talking about what we'd do if we won the lottery.
One group of people on the program (I think there were 7 people) won $315,000,000 in the California lottery. After taxes, each of them took home over $20M. I calculated that if we made just 2% interest on that money(very modest, I know), we'd make $400,000/year! Of course, it would be less than that after taxes each year. Lets assume $150,000/year ($12,500/month!)
I can tell you right now, we would not have a 9 to 5. We would quit our jobs. I worry about health insurance, but I would think we could easily be self-insured in this situation, dont you? If nothing else, we'd have a high-deductible insurance plan.
In this situation, Todd and I both agreed that we would move out of our house. We would buy land. I found some on landandfarm.com that I think would be perfect. Todd and I love the woods, we love mountains, and we love log cabins. We would buy something like this and build a cabin on it. We both agreed we would want something simple. Maybe the size we have now and hopefully add a few kids to the mix. No one waiting on us hand and foot (though I mentioned wanting a cleaning person once a week). We can mow our own property. We can cut our own trees. I can do my own gardening.
Yes, I would have a garden on this property. A vegetable garden, an orchard, grape vines, raspberries, blueberries and anything else I could possibly want. I would fence it in, though, so no deer could get in. The garden would be extensive and provide for everything we could possibly want and need throughout the year with plenty to give to local food banks. If I didnt have a job, do you know how much time I'd have for cultivating a garden? ALOT!
I would also want a milk cow, chickens, and mabe even a pot bellied pigger or two.
I would also want Todd to have a nice "work" truck to go along with his Rondo.
As for me, I just want a family and the land to be as self-sufficient as possible. We arent ones for bling. There would be no $1.5M dollar homes, even with this amount of money (we feel that would be a waste.) I can assure you my family would get money every year and we would support causes we believe in. Oh, and we would take one heckofa vacation as a family!
NOW...the next scenario was a couple who won $8,000,000 in the lottery and took the payout of $2.5M after taxes. This changes things quite a bit for us. Assuming 4% interest on our money, we would get $100,000/year. Could we live on that? Absolutely! Would we buy that property for $200,000 in WV and build a house on it? No.
We like security. Would we live in the house we own now? Maybe for a few years (while accumulating wealth.) I could see us living in our home, and Todd having time to fix the rest of the house up. Would we work? Yes...but not in our current positions. We would find jobs we truly enjoy and not work for the money, but for the fulfillment. Even if that means part-time work. Would we get a house out in the woods with a little more land? Eventually once we saved up enough cash to not take on any debt and not hurt our future investments.
The people who won the $8,000,000, they moved and bought a $350,000 house on 14 acres. They then bought a house for their son, costing over $100,000. They bought a $40,000 vehicle for their son, a $20,000 vehicle for their daughter-in-law, a $160,000 big rig for themselves, many many animals, a $14,000 lawn mower, and some big machinery. Oh, and then when the IRS said they owed $350,000 more in taxes, they couldnt pay it. Gee. I wonder why.
To me, a windfall of $2.5M would pretty much make us set for life. I dont see our habits changing much. We are pretty set in our ways and pretty darn frugal.