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Lottery Winner

January 16th, 2013 at 12:01 am

There is an article out today about an unemployed guy buying an $8.00 lottery ticket and winning $1 million. Good for him! He got a check for $670K after taxes were withdrawn.

Now, I seem to remember that they just raised the tax rates, and a quick check on Yahoo finance shows that anything over $450K is taxed at nearly 40%. That means that he'll owe $340K to the US government alone, although only $330K was withheld.

Now, with any State income or sales tax, I'm pretty sure he's going to already be below $640K.

He said he tithed 10%. Assuming that was $67K (ten percent of his take home), he's now down to $570K.

He bought two jeeps: $520K. And now he's made an offer on a house. For convenience sake, I'll estimate $250K for that.

He just won the lottery, and he has no job. He has a paid-for house and $270K in the bank. I will guess he has a lot of credit card debt, so I'm going to arbitrarily put his bankroll at $220K right now.

How long do you think it will be before he's borrowing on his house to pay bills? I'm guessing no more than 2 years. After all, this guy immediately started spending after he got some green in his palm.

4 Responses to “Lottery Winner”

  1. Amber Says:

    It's sad because usually lottery winners are broke within two years. I hope he is an exception

  2. SecretarySaving Says:

    Two jeeps?

  3. LuckyRobin Says:

    I think when you get money like that it is very easy to get caught up in the rush. Personally, I would have bought a house, paid off all my debt, funded college for both my kids, hired a tutor for DS so I wouldn't have to homeschool him, planned one elaborate driving vacation, and banked the rest. And I would have started shifting some of it into retirement accounts as soon as I could.

  4. Shiela Says:

    That guy wishes he lived here in Australia, that winning would have been tax free.

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