So on the way back from the guys weekend we had two interesting conversations.  The first was a giant snow ball of lies that resulted in my getting a free ice cream cone at the end.  The second is the standard conversation on what we’d do if we won a Lotto Max $50M prize.

I always feel a bit odd in these conversations as I have never actually purchased a lottery ticket.  I’ve participated in many lottery pools, but I’ve never bought one myself.  So my odds of winning probably aren’t very good.  I stayed quiet through most of the topic.  Not for the reason above, I was still worried about my knee for the most part.  Plus I am a listener by nature.  I’ll chime in once I get really excited or if I see a good place to make a joke.

I don’t want to rehash our wish lists, but there are three side aspects to the talk I found interesting that we didn’t really go into.

The first is the size of the lottery.  It is funny that we aren’t talking about the $1m lotto any more in conversations like this.  Obviously the fun is to get mad money – money you can go crazy with.  $1m is not that anymore… You pay off your debts, maybe get a house upgrade, set aside money for the kids, maybe take a vacation, give to charity and invest if there is any left over.  You probably don’t quit your job and start a millionaire lifestyle. Heck the million might not cover all the things I listed.

Where is that tipping point?  When does it move from making your life easier to not having to worry about money anymore (provided you don’t just blow it in Vegas that is)?  When you can live off the interest alone?  When living an $X/year lifestyle for the rest of your life doesn’t suck up the money?  When are you done working for the man and you’ll just be working for yourself (or to benefit others in a way that is fulfilling)?

If you are 35 what is it?  $1m might be too low.  $50m certainly works.  Where does it flip over?  I used to figure $10m because of interest.  Even if it is just in GICs you could live on that in style.  But even that isn’t mad money.  I can only buy so many Ferraris before I lose my interest producer…

The second interesting bit is what will you do for friends and family?  Dave had an idea, but Dano said it was wrought with problems regarding the perception of equitableness.  The only thing we agreed on was that you needed a fair system.  Oddly when Dave mentioned his idea, I thought it was my own.  He must have told it to me once and I co-opted it in my brain space.

I don’t want to mention what Dave’s idea is.  Just in case he wins the lottery and does something different.  I’d probably have added to it as follows – setup an education trust for each of my friends/family’s children.  Dano’s objection, if I change it to fit my addendum instead of Dave’s suggestion, would be that Some people would end up with more money than others.     His counter suit was to keep things very simple and just give out X dollars at Christmas to each family.

The issue is the dilemma.  If I was so fortunate to win something, I’d certainly want to share.  However, if it looks like the sharing is not fair it might ruin more friendships than it helps.  In which case it might be better to do nothing at all.

Of course an actual solution gets even harder even for Dan’s simpler idea.  Who is included or excluded?  You’d also have to resist setting up a tiered system.  And other than an initial or recurring gift the issue will come up in a dozen other forms too.  Would you invest in a friend’s company/idea?  Would you lend/gift them money if they are in a tight spot?  (Which?)  If you started a business with your winnings would you hire any friend’s family?  Do your answers change between a mad money winning and a smaller $1m winning?  Just considering the pitfalls makes me happy not to be in such a situation.

The final note of interest was the last bit of discussion we had.  How much would you give to charity (and which)?  Everyone agreed that over 50% would be so dedicated.  But it is an easily question when we  are talking about the mad money amounts.  Giving away $25m leaves me with $25m which is still likely more than I can spend.  But giving away $500,000 of $1m means I can only afford a large house now.

Obviously we weren’t talking actual percentages, it was an ‘at least’ idea.  Tricky though.

During the same discussion I noticed that a lot of the ideas seemed to need less money than time.  As in “I’d devote my time to helping such and such.”  The unspoken assumption being that without a job to tie up time more could be spent on charity.   I wonder if we make a couple false assumptions there.  First that more time would be available.  It seems to me that regardless of your circumstance responsibilities can fill your time – they grow to fit the space available.  Additionally, even now we have the ability to make time for those things that are important.  Finding time for charitable work isn’t the luxury of the rich.

(I don’t mean tom imply that folks aren’t being charitable with their time and money right now in any way.)

Anyway, I’ve asked a lot of questions and provided no answers.  I don’t really have any.  Fortunately I’m no likely to win the lottery any time suddenly.


8 thoughts on “Lotteries

  1. craig says:

    Well once you run out of Ferrari’s may I suggest the Bugatti Veyron.

    As to the charity angle I have donated both time and money, the lottery winnings would make it simpler has I could donate cash. The skill set I have isn’t terribly in demand in the non-profit sector. On a selfish note the areas that I could do volunteer work are ones that I won’t really want to do, so the cash makes it easier. On a side note charities that I have worked/volunteered for had a preference for cash over time.

    I would end up puttering endlessly, the number of projects would grow at a near exponential rate, few if any would ever get fully completed. Part of this is just my personality and part of it is to annoy Sue. I would take 100s of courses and finish few if any degrees, in short become a dilettante.

  2. First, cooking isn’t in demand?

    Second, don’t sell yourself short. I’m sure you can annoy Suellen even in your current circumstances!

  3. Gary George says:

    Craig, unless things have changed, most smaller charities are in desperate need of computer & network skills — they can’t convince themselves to waste scarce dollars on something they can work around (maybe).

    Todd, to address the question tangentially, the first thing I would do is try to find a way to avoid anyone knowing I’d won it: I’ve seen some very unfortunate consequences from “found money” and the expectation that there might be some more to be found. Giving large-value presents is a rather delicate social issue, particularly for someone slightly tone-deaf to the feelings of others like me.

    After that, disposing of it in ways that will be effective and useful rather that ways that will line the pockets of crooks and sycophants is a challenge — just ask Mr. Gates or Mr. Buffett.

  4. Robin Turcotte says:

    The way I see there are only two ways to give the money away to family, friends, strangers and charities. You either set yourself a set of rules with a line that you can’t cross and don’t cross it, or you go with a case by case senario. Either way you will just have to except that some people will get pissed off and fall back on the old adage that if you lose a friend because of this situation then they aren’t really a friend in the first place.

    • That is an old adage? i think you just made that adage up.

      I think the old adage is, “if they are just friends with you because of your Bugatti Veyron who can blame them!”

      I’d really suck at case by case. I’m more of the “If there isn’t a good reason not to, why not?” This would eventually result in nothing left…

  5. Robin Turcotte says:

    so a paraphrased. 🙂 and who says having noting left is the wrong way maybe that will lead to whole lot of fun… 😉

  6. Dano says:

    Nothing left certainly solves alot of problems.

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