A real lottery loser.
February 8th 2008 by D in I won the lotteryThats how I feel sometimes. Its been increasingly difficult to deal with the crushing weight that money brings along with it. Plus my kitty is sick. That is making me very sad.
In other news I’m moving! Living on the same street with my family is driving me insane. So I’m moving about 10 miles away. YAY!
I’ve also started working out again, which is bringing my energy levels up to maximum. It feels so good to run and run and run and run. Then lift a few weights. Refreshing.
Talk to you all soon!
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I’m sorry your cat is sick, but you ARE NOT a loser!! You are a great person who goes out of his way to help people he doesn’t even know. Don’t you dare get down on yourself. Anyway, you should be happy that you have the money to be able to get your kitty all healthy again!
D! I agree with amnesty. C’mon now, you and I both know, things could be worse. I can’t say that I relate, but I feel for you. And it will get better…I promise. lol @ 10 miles…how about…30! Get well soon kitty.
hahah its uplifting to be getting a change of scenery.
The press conference and the attention are just hype created by a mostly unwealthy group of people who imagine what a lottery winner would want. The reality is that none of that stuff matters in the least bit. The reason that all these lottery winners go broke is because they have the mindset of the 90 percent of society who are not rich. It all really depends on how much you win also. If you win anything above ten million it gets a lot more difficult to manage. Anything under that you’re not really that rich anyway so it’s easier to get back to reality. My advice which I am sure that you have dealt with already but may contain the mindset needed is this.
1. If you win 1 million to 10 million you have little room for error and your main goal should be protecting yourself. You want to create a list of all family members that you have had any type of relationship with. Designate a gift amount to each family member based on their “senority” in the family. Grand parents and parents get equal amounts. Brothers and sisters half of that amount. Cousins,Aunts and Uncles get a nominal fraction of this amount. The example I will use is 10 million. This ends up being about 360k a year after taxes for twenty years. The only year you designate money for family/gifts is the first year. Here is how I would divide the 360k. 100k goes to raw living expenses for yourself in an interest bearing liquid account. 100k goes to direct gifts to family members based on their senority. 100k goes into an equity fund with aggresive growth targets in companys like Coke,Pepsi, Pfizer that can withstand a weak dollar and have made strong moves in foriegn markets. 60k goes towards whatever you want.
The second year you would elminate the family gifts and increase the stock investment plan to 200k a year. You can decide to splurge on family with the 60k if you want but anything beyond that is highly dangerous to your potential wealth. If you have won a larger amount you increase the amounts Proportionally and the same for a smaller amount. If you follow this plan you
will have more money in twenty years than you did at the start of it. For people that win and take the lump sum the ratios are effectively the same. You give 5 percent to family and friends. 5 percent for splurging. 20 percent in highly liquid investments like US treasurys. 5 percent for housing with accurate estimations for costs to furnish etc. 65 percent in strong non exotic Amercian Companys like Coca Coca,Procter And Gamble,General Electric
etc.
The number one thing is that before you give the gifts to family and friends is that you tell them that this is the only time you will be giving out cash directly to them. A great way to handle this is to split each of their gifts in two and let the first batch of money be their “mistake money” and the second batch of money be the final gift. Each gift should be preceded with talk about your strategy and how you just want to make sure you don’t go broke like all those other lottery winners. If they love you they will understand and since you are about to give them money they’ll be in the mindset of gratefulness anyway.
Very informative post John! Thanks for stopping by.
Here’s some more info.
It all depends on the company. A well run company will have outstanding returns on capital and equity. Some companys even though they are managed really well will never increase more than a few percentage points per year due to limitations imposed on them from the following things.
1. Competition
2. Branding
3. Plant replacement or updating costs
4. Cost to produce and time to production
5. Inventory stagnation
6. Labor cost
Let’s take two companys and compare them and well see why one company is far superior to the other.
1.General Motors: It employs a ton of people and its labor and associated costs are extremely high. The cost of its inventory is high and is expensive to store. Its plants need to be constantly retooled and updated at great expense. Its greatest strength was that it had barriers to entry but now due to globalization it faces intense competition from companys with a better product,stronger resulting brands,and a lower cost basis due to superior manufacturing and government subsidized currency advantage. Due to union contracts it cannot adjust quickly enough to adapt to surplus inventorys and shrinking market share makes it difficult to supply franchised dealers who are struggling or completely going out of business.(which further damages its brand due to public perception of failure) It faces a high cost of capital due to the markets correctly devaluing its debt which further strains its profit potential. Even in fleet sales where the government could inject profitability the government stiffs the domestic car companys by pitting them against each other in a pricing war which destroys their margin.
Coca Cola: It has pricing flexibility due to an oustanding brand and a superior product. It doesn’t have to build new plants. Its cost of inventory is very low. Its margins are very high. It does well in international markets and increases its share of those markets every year. It has a recession proof product that alleviates a base human need and its product has demand across all social and economic classes. It employs very few people and each person it employs represents a large chunk of sales realitive to their salary. It only has 1 major competitor and they divide practically the entire market amongst themselves and don’t compete aggresively on price. It has outstanding managment and distribution systems. Its stock is owned by smart money which allows it to always be managed by smart managers. It’s basically the perfect company.
Great info John. That’s really something to consider when you want to invest.
i thought you were back to regular updating! what happened?
could you maybe do updates on the random acts of kindness? like, how is your family liking the water filtration system? did you ever see that family you bought the minivan for again? what did you end up doing for those dog groomers? what about the kid with the guitar? i think all of these people have a little place in our hearts now, as well as you… so do you have any new info? or new rak stories for us to weep over?
That\’s the only reason why people don\’t talk about it.
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