Current Events > Financial planners upset as Powerball winner buys $73 million LA mansion

(+) Yeah! (+)

the huge homes can get many times more than the expensive cars. But, like a private jet.......

Bruh, fuck you.

They say it's actually smarter to take the lump sum and invest right away, otherwise you have all that money that isn't accruing interest. Of course the majority of people DON'T do this and don't plan well and end up broke again.

Agreed. Tax efficiency is irrelevant with the sums that they are paying out, since it all is mostly going to be in the upper brackets rather than the lower no matter what payment scheme you choose and if anything you may save money on taxes on lump sum given that taxes have a way of raising over time. Plus they don't pay you interest, so your money gets eaten alive via inflation if you choose payments, whereas you could have it in a relative safe investment and at least keep the value of your fortune under lump sum. Also the opportunity costs are massive for not choosing lump sum. The lotto does a terrible job of incentivizing payments, lump sum everytime

I really can't remember any powerball winner taking the annuity

Financial advisers typically recommend that winners collect their large lottery payouts though annual payments, rather than the lump sump Mr Castro sprung for.

he can afford 3 houses

he can have many houses... it's those yearly housing taxes that get us.

Sigh.. I mean i can kinda understand the desire. but if i somehow lucked out and won that much money i would buy a slightly bigger house, Pay off my families debts, then invest 90% of whats left over, I wouldnt feel the need to live an extravagant lifestyle (Honestly.. i just prefer a nice quiet life)

If you have a billion dollars why not, at least he didn't waste it on buying Twitter

I mean, if I had a big win, I'd sure as fuck waste some of it on dumb stuff. Maybe like 20% or so.

wat

Youre supposed to take the lump sum and invest most of it

I didn't realize lottery winnings were taxed in the US.

I'm sure this guy will be fine.

aren't they taxed everywhere? They might be most heavily taxed in the u.s. Like 40 perc.

Edwin Castro, 31, scooped up $3.2 billion ($US2.04 billion) in a California lottery last year and became an overnight billionaire, adding $1.6 billion ($US997.6 million) to his account after coming forward to collect the lump sum payment.

First of all: Don't confuse the AUD figures with the USD ones.

Next: It went down from 2.04 billion USD to 1 billion USD just like that, so I'm pretty sure at least the 1 billion is already the cold hard cash after tax.

And then he bought a 25 million USD mansion, another 4 million one and a "vintage Porsche 911".

That's not a 100 million superyacht no one has an actual use for, that's not 100 luxury cars at once he will never drive at all.

Seriously, the stuff he buys doesn't sound crazy at all.

aren't they taxed everywhere? They might be most heavily taxed in the u.s. Like 40 perc.

Are people cheering for this guy to go broke?

god, it would be so hard for me to spend 73 million dollars.

i wouldnt even want a mansion much less three. especially in los angeles, which is a shit hole.

You need to staff houses of that size. Landscaping, pools, keeping it clean. It's not even an option when it comes to the area. This is fine for people who generate money, not so much for those who don't. Obviously, with that amount of money, it being a one-time thing would be perfectly fine. Bro ain't acting like that. Poor bastard's gonna find out the very hard way that buying things gives you dopamine hits, not actual satisfaction.

Any "financial advisors" that recommend the annuity option are so clearly and obviously in bed with the lottery people that it should be a crime.

Yeah, I get encouraging smart financial decisions, but that shit smells like "stay in your lane, pretender".

aren't they taxed everywhere? They might be most heavily taxed in the u.s. Like 40 perc.

he got 1.6 billion after taxes. that's all his

but he's going to be paying a ton of taxes on these properties. maybe he's planning on renting them out

Last I heard, lots (if not most) of big lottery winners go broke because they jump right into these extravagant lifestyles with no planning.

I assume they mean "don't quit your job, don't buy a mansion, right away." Get your shit in order and make sure the money is being properly managed before you make crazy life changes.

But then it is his money, fuck it.

But financial planners have criticised Mr Castros lavish spending, classing the three homes as well as a vintage Porsche 911 hes been seen driving to and from the bank as terrible purchases. Financial advisers typically recommend that winners collect their large lottery payouts though annual payments, rather than the lump sump Mr Castro sprung for. Financial advisers also recommend that lottery winners or anyone else coming into a large amount of wealth consult with a financial planner, tax lawyer or other expert to create a plan, according to Fortune. Dont make any visible life changes. Dont quit your job, dont go out and buy a Ferrari, dont buy a mansion, Emily Irwin, managing director of advice and planning at Wells Fargos investing and wealth management division, told the publication. Maybe you have student loans you want to pay off, that makes sense. But try to avoid that mega-purchase.

Why does this matter? It's pennies compared to his total net worth now. The property is also likely to stagnate or appreciate in value anyways.

People that rich don't rent.

I dont understand how people win this money and just try to find ways of making even more money lol.

As a reminder, though the home is clearly extravagant, it only cost 2.5 per cent of Mr Castros total lottery winnings.

No one does. The annuity is just there for people with absolutely no impulse control, but these are the same people that would never take the annuity in the first place, so it is hard to think it is for.

Do most of you here believe that you would be able to spend 1 bil?

Dont quit your job