How to Spend $640 Million in Lottery Winnings

Brent Pittman —  04/01/2012

Mega Millions Ticket by Lisa Brewster (remember me!)

I originally wrote this for the Mega Millions Lottery back in April 2012, but many still find this article today. There are good lessons of what I’d do if I won the lottery. If you did win big, give me buzz and I’ll share it all over a cup of joe ūüôā¬†

By today, someone has come forward to claim their $640 million Mega Millions Lottery winnings. That is a ton of money.

Let me be clear. I am not for the lottery one bit. The lottery is a terrible idea and a tax on the poor to fund middle class college student’s education. I will not buy a single ticket, not even just for kicks and grins.

There is a 175 million-to-1 odds of winning the lottery. The winner will get a smaller ($462 million) lump sum or 26 annual payments for the full amount according to Reuters.

Even though, I don’t play the lottery it is fun to dream how I would spend the earnings. I was inspired by¬†Money is the Root‘s article.

If I Won the Lottery: Phase I- Pause

I would elect the smaller lump sum upfront of $462 million-Federal taxes-State taxes ($0 in CA for lottery winnings)= $346,500,000 (source). I believe I can get a better return than the trickle 26 payments.

What would I do? Tithe- This will seem strange for some of you not of Jewish or Christian faith, but I would give 10% to my local church before taxes, $46.2 million.

Then, buy a very large umbrella insurance policy and line up a top notch estate planner to set up a family trust. I would also begin to set up a family office to handle taxes, payroll, and daily chores I wish not to bother with. $2 Million should set it up and begin staffing.

Then I would park the money for 3 months in various Money Market and CD’s while I really pray and think through the best use of the money. My wife and I would have to agree on any big decision. I’d take $50K during that time for our family to live off, comfortably I might add.

Steve Jobs said it would be a full-time job giving money away properly. He also said:

‚ÄúIn order to lean how to do something well you have to fail sometimes‚Ķthe problem with most philanthropy-there‚Äôs no measurement can really never measure whether you failed or succeeded. So it‚Äôs really hard to get better.‚ÄĚ-Steve Jobs (1985 interview)

I agree. It would take a while to learn how to give away money ethically, responsibly, and not damaging your family and friend relationships. What good is money if it destroys those you love the most?

If I Won the Lottery: Phase II-Plan

Monthly Salary- I would give myself a modest monthly salary, say $8,000 a month or $96,000 a year (4% raise per year) That should be more than enough to live a comfortable life.

Family and Friends- If I gave money away to family or friends it wouldn’t be enough to set them for life. I don’t want to make them lazy, but they would get a head start or sprung from their debt.

It is reported that Warren Buffett only gave about $ 90K to his son Peter. That is a paltry amount for #3 on Forbes richest people list. What Buffett did give was values and knowledge in how to win in life.

Spending-¬†I think the hardest part would be deciding where to live. Buying a few houses in several states wouldn’t be¬†ridiculous, but I don’t want mansions. I think 5 million in initial spending on houses, cars, new clothes, a scooter (I’ve always wanted a Vespa) would do the trick.

Initial Giving- Initially $40 million would be given to various personal charities that help people physically and spiritually worldwide.

Political Contributions- Not going to happen. Don’t call or ask.

Core- This $50 million will be the core that won’t be touched. Money Markets, Cash, Ladder CD’s. Boring and the goal is preserve this core. My¬†monthly¬†salary, operations for family office, taxes, and property expenses will come off the interest. The core will be given away upon our death.

Single Stocks & Mutual Funds- These will be several mutual funds and single stocks. Any earnings above $25 million will go into the Core. 

If I Won The Lottery: Phase III- Live Life

Now that we’ve got the basic plan set up, it’s time to live the rest of my life. What will I do. Split our time between traveling, running our foundation, and starting business ventures. I’ll probably get my MBA in London or someplace cool too.

I am an Angel- You’ve heard of Angel Investors? Well, Now I’ll have $75,000,000 to invest in companies. If I want to run a company, I will. If I want to just put money in and get a return, I’ll take a gamble. This should be fun. Any earnings above $75 million will go into the Core.¬†

Foundation- This foundation will be our living gifts towards new charitable organizations (50%)  or established (50%). All gifts will be anonymous.

Mad Money and Travel- Theres is a few $3.3 left for just kicking around the world. Mere pocket change.

Original $346,500,000.00
Tithe -$46,200,000.00
Family Office Set Up -$2,000,000.00
Initial Spending -$5,000,000.00
Initial Giving -$40,000,000.00
Core -$50,000,000.00
Single Stocks -$25,000,000.00
Foundation -$100,000,000.00
Business Ventures -$75,000,000.00
Mad Money & Travel -$3,300,000.00
Total $0.00


How would you spend the Lottery if you won? 

Photo Credits Lisa Brewster (Creative Commons)

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Brent Pittman

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Brent is a financial coach and writer looking for the perfect donut. He believes personal finance should be both fun and accessible to anyone willing to learn.
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  • It IS a “tax on the poor”, for sure. ¬†I only buy a ticket when the pots are huge like this. ¬†I bought one, and believe it or not, didn’t win. ¬†ūüėČ ¬†it’s just staggering to think how much money this really is. ¬†$46.2MM is just 10% of the winnings! ¬†Nuts. ¬†I’d be in a similar boat though as far as Angel Investing. ¬†I love new and emerging business.

    • Have you ever read any about Mississippi before they re-instated state gambling? One of the¬†poorest¬†states is now ever poorer. Sad.¬†

  • Joe

    Interesting. It’s great that you’ll tithe so much of it. I like your salary plan too although I probably would give myself a bit bigger salary. ūüôā
    Warren Buffet gave land and other things to his son. I think it’s great that his son is doing his own things and doesn’t depend on dad at all.¬†

    • Joe, Thanks for commenting. Imagine inheriting thousands of BRK A shares! That would really be winning the lottery.