The Powerball jackpot now stands at $1.3 billion with a “B” as of Sunday morning, and will likely add a few hundred million more before the next drawing. As a rule, I don’t play the lottery, which I’ve always called “a tax on the stupid.”
Note: I’ve had this post up for about an hour, and already got a first edit. I was told Powerball costs $2 and pays out over 30 years not 20. So where I’ve got $60 million, it’s really $43.3 million, which is $21.6 million after tax, $17.3 million after tithe. I’d do everything else exactly the same.
The odds of winning the jackpot are astronomical: 1 in 292,201,338. But for a $1 investment, that’s still a pretty good return, although winning is only a fantasy. A powerful, drug-like, addictive fantasy that sucks dollars out of your wallet like the Mega-Maid. That’s why I don’t play the lottery: It just leads to playing again, and again (insert infinite series here…).
That being said, if I decide to play a $1 ticket; if the lines are not dissuading (which they’ll probably be); and if I don’t come to my senses; and if I don’t spend the $1 on Slim Jims at the quickie mart before I get to the counter, then here’s what I’d do should the impossible happen and I actually win $1.3 billion (or a share of it).
#1: Take the cash over 20 years
If you win a large amount of money, and take some net present value of the annuity all at once, then you automatically get a new job with it. You become a money manager. Even if you hire a money manager, you still have to make major decisions. I don’t want to be a money manager. I like doing other things.
Here’s the rub–if you don’t become a money manager after winning the cash and taking it all at once, you will lose the cash. Rapidly. Sadly, this is what happens when people who don’t know how to spell “money manager” win large jackpots. If I were king, I’d eliminate the “get it now” option entirely. It simply causes more lottery winners to go broke. Or at least go broke quicker.
Here’s how I figure it. The government is a poor money manager, much poorer than I’d be. Why should I take on the responsibility of losing their money for them when they are more than capable of losing it themselves, and I still get paid over 20 years no matter how much they lose?
#2: Give away 90 percent and live on 10 percent
If I won $1.3 billion, I’d get $60 million a year, which is $30 million a year (estimated) after tax. I’d give away $27 million of it. As a Christian, 10% of the before tax amount would be my tithe. (Yay, my church!) The other $21 million would be split between $1 million to an educational scholarship fund (where I decide who gets the scholarships), and $20 million to ONE cause.
I’d be a one man shark tank for people to come and bid on the $20 million prize. Like the Ansari X prize without having to achieve orbit. I might not even give a prize every year, but eventually every $20 million prize would be given away.
I’d live on $3 million a year, and bank most of that.
#3: Live where (and how) I’ve always lived
Warren Buffett lives in Omaha, Nebraska, in the same home he’s lived in since the mid-1950’s. If you go to his house and knock on the door, Warren may actually answer it.
I like where I live. I’ll stay here. I might buy up a few of the neighboring homes for expansion, but I will stay where I live. I’ll continue to drive what I drive (my wife and I are both blessed to drive 2015 model cars). I might buy a few toys, like the race car I sold last year–that is, after I build a separate garage for it.
I might, at some point, spring for a light airplane, because I like to fly. Flying requires time plus money, of which I have neither right now. But if I’m dreaming about having money, why not have time to fly? I’ve been a pilot since 1985, so it’s not like that’s a huge life change. Some people like fishing, right? Me, not so much. I like to fly.
#4: Don’t go crazy; become the king of ‘no’
If you’re an instant billionaire, even just on paper, that’s easier said than done. Without the option to remain anonymous, staying sane is a challenge. There’s plenty of broke lottery winners who have also lost their friends, family, and their minds.
I have, in the pre-marriage past, had a tendency to live beyond my means. Having a family has cured me of that, but it will–admittedly–be a struggle to live humbly if my means are, by all useful reckoning, unlimited. I will resolve to not go crazy with buying and spending on useless stuff.
The best way to do that is to become the king of “no.” Mark Twain wisely observed, “Give a man a reputation as an early riser and he can sleep ’til noon.” Anyone who comes to my door will be greeted calmly and warmly with “no, go away.” No matter the request, the answer will be no. The piles of mail, emails, social media, and personal requests will all be answered with no. Even when I ask myself to buy something I’ll say no.
I’ll become the king of “no,” and then, after a few years, I’ll be able to give whatever I want to whomever I want, and nobody will ever ask me. I’ll make a habit of living within a much smaller means circle and then I won’t be tempted to go yacht shopping (I wouldn’t anyway–I do like cruising but it’s better with 4,000 people you don’t know because it makes you appreciate getting off the ship).
#5: I’ll live with purpose
If the purpose of life is to accumulate cash, all billionaires should commit suicide, because they’ve achieved the highest aspiration and need to quit while they’re ahead. Obviously, that’s not the case, and people who spend their lives accumulating wealth, only to realize their dream when they’re too old to employ their wealth find out the hard way how unsatisfying it is.
It’s one thing to have financial security, but financial security doesn’t buy happiness (it does make a nice down payment however). Money can’t buy purpose either. There’s plenty of rich playboys and playgirls in the world who drift aimlessly (poster children: the Kardashians). Some of them die young, of terrible afflictions like drug overdoses.
Financial security also doesn’t buy eternal security. If it did, Jesus would not have spent so much time railing against the rich. Matthew 19:24: “And again I say to you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.” Winning a billion dollar lottery is a dicey thing, because it’s so easy to abandon life’s purpose and live for the money.
God requires us to love him, and through him, love our neighbor with the same fervor as we love our own bodies. Jesus demonstrated that love by giving His body for us. The Father demonstrated his love by giving the Son over to torture and death. The Holy Spirit demonstrates his love by giving us purpose in life and the power to live for that purpose.
It would be great to win a billion dollars and never worry about paying a single bill for the rest of my life, down to my children and grandchildren (although giving them such a “gift” could be a curse–see the Kardashians). But I think I’ll simply muse about it, knowing that even if I pay my dollar at the convenience store counter to receive a piece of paper with numbers on it, in the end it’s going to end up in the trash.
I have one suggestion the lottery people would never entertain. Print lottery tickets on toilet paper, or paper towel rolls, or boxes of tissue. Buy the tickets, and then dispose of them properly, and with definitive purpose. If I could buy lottery tickets and toilet paper in the same package, I might actually play, because the satisfaction of using a billion dollars to–well, you know–is worth the dollar.