Weekend Plans Post: The Windfall (Theoretical)
Back in December, the Megamillions and Powerball were both up to some absurd amount again and I idly thought “I should buy a ticket” before entering a quick daydream where I:
- Bought a new house.
- Sterilized the new house.
- Hired someone to buy bare bones furniture for the house (bed for bedroom, couch for TV room, dining table for dining room, computer desk)
- Sterilized the new house again.
- Waiting a couple of weeks before moving into the house with 7-10 outfits and the cats.
- Buying another new house.
- Hiring someone to move the stuff in the old house into house #3.
- Sterilizing house #3.
- Waiting a couple of weeks.
- Debating over whether I’d rather live in house #2 or house #3.
And that’s depressing as heck. The corona has even ruined daydreaming about winning the lottery!
But that got me thinking about the amounts that it’d take for me to have a good lottery daydream given the corona.
I remembered what “the lottery” was like when I was a kid. There wasn’t powerball or megamillions or anything. There was just the Michigan Lottery. The big jackpots tended to be around 7 or 8 million (granted, those were Reagan dollars). The other jackpots were closer to 2 or 3 million. Those were back when you’d hear stories about people who won the lottery and then they were bankrupt a few years later. It might be difficult to imagine running out of money if you win one of the billion dollar jackpots and even if you take the lump sum, you’ve still got $700 million. You’d have to make a company and make a product to spend that much money. Spending 2 or 3 million? Anybody could do that!
So when my mind wandered toward an actually pleasant lottery daydream, I went small.
What was the smallest lottery amount I could win that would let me quit my job and retire? I mean, not buy a house in San Francisco, Seattle, Portland, Tampa, Brooklyn, and Cheyenne. I mean “pay off the house and then retire and live off the interest and still maybe go travel every once in a while but nothing crazy”.
So we have to pay off the house or buy another house (sterilize it, etc) and that will be the retirement house. Ideally, walking distance from a handful of amenities: grocery store, diner, maybe a dispensary. That would make a car unnecessary. So the only money we’d need is for food, electricity, heat, and entertainment. So that’s… $60k/year? $5k/month?
And to do that, you’d only need 1.5million in the bank, according to the investment calculator I just checked. So the Colorado Lottery is at 4.6 million dollars. Cash value is 2.2 million dollars. According to the lottery tax calculator, that would leave the winner with a cool 1.5 million.
Just pay off the house and… oh, dang it. Now it’s less than 1.5 million.
But it’s close enough for jazz. That’s the jackpot I’d need to retire. Maybe not have wild daydreams about… but the pandemic has pretty much ruined the wild daydreams of winning the powerball. A nice, socially distanced daydream? Now we’re talking.
That’s what I’m daydreaming about this weekend.
So… what’s on your docket? (And what’s the minimum you’d need to retire right now?)
(Featured image is Sleepy Alice. Photo taken by Maribou.)
Sterilizing the house seems unnecessary. Viruses are pretty fragile and just don’t live that long outside of a host, and my understanding is that surface transmission turned out not to be nearly as big a deal as initially assumed.
Theoretically I guess I could retire in a low cost of living area now, but to retire in a rich country I still have a ways to go.Report
I actually don’t think I’d retire right now if I were offered money to. After a year of isolation, a part of it where I didn’t leave home and didn’t really DO anything (the summer), I need to be out and active and “earning my place.”
Though if I were given a large chunk of money, no strings attached? I’d get after all the deferred-maintenance in my house and also get the place resided (and better insulation under the new siding, I learned that during our recent cold snap, this place is NOT well insulated).
I’d also consider buying up the house next door and kicking the renters out (they are loud, they have caused damage to the yard of the neighbor on the OTHER side) and set it up as something like a guest house and then just make it known among my friends/acquaintances “hey are you writing a dissertation and need a quiet place to get away to? You want to take an extended quiet vacation somewhere where there’s not a heck of a lot to do?” and let them stay there. (I suppose the downside would be that word would get out and people would ask if their boyfriend’s best friend or other people I don’t know/don’t trust could crash there, and then we’re back to the loud and irresponsible neighbor problem)
I would also use it partly for storage. I have a LOT of books, and it would be nice to move the ones I’ve already read but want to keep out of THIS house. Also could use the upstairs bedroom in that house to just store stuff like holiday decorations.
Or, alternatively: set it up as a giant studio and FINALLY buy the longarm quilting machine I kind of want but have no room for (and no money to buy currently) and store all my sewing and knitting stuff over there, and that wins me back space in the main house.
My weekend plans? Tomorrow is my birthday, AND I am 2 weeks out from my first Pfizer vaccine, so I am going out to a fabric store.
On the one hand I am super excited to do “nonessential” shopping in person again; on the other hand, damn, it’s sad how small my world has shrunk that being able to go to the JoAnn Fabrics is a huge and unusual treat.
Heck, I might even go to Ulta Cosmetics, too.Report
I actually don’t think I’d retire right now if I were offered money to. After a year of isolation, a part of it where I didn’t leave home and didn’t really DO anything (the summer), I need to be out and active and “earning my place.”
A question I used to ask colleagues as they approached possible retirement was, “How are you going to fill up all the hours in the days?” Few of them had given the matter any thought. When they asked me, I had a list of the software projects I wanted to undertake and my ongoing research project into questions about how a particular partition of the United States could happen. (I note that I started on that as a hypothetical question long before it became routine to read comment threads at Lawyers, Guns & Money that the country is doomed, it’s impossible to live with the other side, etc.) That last one should last me pretty much forever since I keep discovering new topics that I need to know about (eg, 20th and now 21st century urban history.Report
Take the all-cash-right-now option. If your state taxes lottery winnings (mine does) you’ll wind up with about 2/7 of the face value of the jackpot. So if you need $1.5 million to retire and essentially maintain a weekend-at-home-but-everyday lifestyle for the balance of your life, you need to hit a jackpot of (7/2*1.5M=) $5.25M. Cool — that’s less than an opening jackpot for most of the multistate pooled lotteries. I think the Powerball starts at what, $20M, and the MegaMillions at $15M?
So if your goal is as @jaybird describes here, almost anywhere you pick to live* should be consistent with winning any level of the available jackpots. Nor would it be difficult to find a competent and honest financial advisor to actively manage the funds so as to guarantee never needing to work.
* This may not be strictly possible if your home is in a massively impacted real estate market like San Francisco, New York, or Washington DC. I’m thinking my own city of Portland is going to be roughly like most places in the US — looking around Zillow within the city limits, I’m hard-pressed to find a place to spend more than $2.5M, at least on a single-family home. I could spend more than that if I were to invest in a multi-use development or an apartment block or something like that. Which would be something to think about with all those surplus LottoBucks, but that’s a different discussion than the one called for by the post.Report
I’m more of a pessimist about some aspects of it than most people. If there were suddenly $350M, say, and no way to keep it secret, I’d have to hire one or more people to take care of it. I’d have to hire one or more people to answer the phone and open the mail. If I’m really pessimistic, I have to arrange for security for people. Is kidnapping still a thing rich people worry about?Report
With $350M, you pretty much *HAVE* to create a company at that point.
Michael Cain Incorporated. MCI, for short.
Buy a house. No, one bigger than that. No, one bigger than that. Make 80% of it “MCI Headquarters” and live in the other 20%. Hire your wife as VP. Maybe the kids as PMs. Maybe your bestie as Consultant Extraordinaire.
Put up a fence. Pay yourself dividends. Maybe give a scholarship to a kid here or there. Make them write an essay first.Report
No, a building in Fort Collins, not too far from campus, with us in the penthouse and MCI on the floor below. A couple of universities will get an endowed chair. What it really screws up is the list of software I have intended to write in retirement. It’s hard to justify not just hiring someone who can do it better and faster.Report
Is kidnapping still a thing rich people worry about?
Dr. Fauci had to hire security for himself and his children, so whatever else you do, don’t use your new celebrity to differ with Donald Trump.Report
I used to work with several groups at one company-accounting and finance. The accounting group got into the Powerball lottery game and everyone in both depts played, usually once it got over 100m. There was always the fantasizing of what we’d do with the money and how much we’d get per person since we went in together for the tickets.
Me: depending upon how much money, ofc, but I’d start travelling. Hiking in Nepal, diving in the great barrier reef. Ankor Wat, Manchu Piccu, Kyoto, Antarctica, Petra, India, etc. And the food….eat all the local food. God it would be wonderful.Report
I am retired right now, and we’re attempting it on about a million-and-a-half total (various forms) plus Social Security. And Medicare, which under certain unpleasant circumstances would be a sizeable stack of money. As Paul Krugman has said in the past, with fairly rare exceptions it is possible for a person to save enough to cover their retirement medical bills, or their retirement non-medical bills, but not both. The pile accumulated through some good planning, some good luck, and thirty-five years.Report