That's a Lotto Money

At some point in all our lives, it can seem as though a true solution to whatever ails us in the moment would be a large cash infusion. Speaking purely in terms of financial stress, problems like excess debt, school loans, medical and dental bills, home and auto repairs, property taxes and just about anything else that keeps us up nights worrying about our bank statements can be solved by the deposit of a large sum of money into our accounts.  As a fantastical remedy to these ulcer-causing stresses, many of us dream of winning the lottery. Of those who partake in this fantasy, some few actually play the lottery by buying the tickets, but the point is nearly anyone you ask will nod with exuberance if you ask them if a lottery win would help. How could it not help? Rich people, poor people, middle class people (as if there was such a creature anymore) all would like a six-to-eight figure payout please and thank you.

I admit that it would be helpful to have that money overnight, as it were. There is a kind of financial fanhood in our country now where we idolize those who are super wealthy and place on them our respect merely because of their total worth. There is nothing truly moral about being rich anymore than there is with being a redhead. Also, most of the wealthiest people are only valued by their total assets rather than their in-the-moment liquidity. There might be billionaires wandering around out there, fewer than one tenth of one percent of the population, but they don't have rapid access to all that money. Much of it—most of it, actually—is tied up in investments or other long-term projects. These mega-rich individuals don't have the ability to access an ATM machine where they can draw out three million in cash. Nevertheless, to be thrust up into those dwindling parameters and find ourselves far closer to those tax brackets could seem ideal. The only way most of us will ever approach those echelons is by winning the lottery. Most of our parents do not own an emerald mine they can donate to us, but I do intend to ask my Pops, just in case.

Winning an obscene amount of money has its drawbacks, though. Especially for regular folks. Depending on how much I might win—assuming one could actually beat the galactic odds—the amount owed in taxes back to the local, state and federal entities who are now suddenly quite focused on our cash flow, would be about sixty percent of the total if we opted for the lump sum payout option of our winnings. In substance this means that if I won 500 million dollars, about three-hundred million would be headed right back into Uncle Sam's greedy claws. Of course, that seems like a lot until one calms down enough to realize that two-hundred million is far more money than I ever had or ever was likely ever to have.

Assuming one proves the statisticians wrong, there are usually two options for how the winnings will be dispersed. The first, as discussed already, is the lump sum. The other is a kind of ongoing payout of weekly checks for vast sums of money for life. Someone once told me he felt he could more reasonably manage his new gigantic income if he simply got direct deposits from the lottery each week, thus slowly building that wealth over time. Plus, he noted, the taxes would be lower. I didn't have the experience I have now of being a homeowner, but with a couple decades under my belt, I now understand the folly in this option.

Payments for life is one of those tricky phrases intended to sound much better than it is. Assuming one wins that 200 million above, and assuming one lives for say, thirty years, that’s a weekly payout of just over one hundred thousand dollars per week; way more than anything I could ever hope to make while not being the CEO of a major corporation (also very unlikely). My luck, having chosen this option out of some momentary idiocy, I would probably be squished by a random falling object plummeting to earth out of low orbit on the very next day after winning. My payout would last a day. Uncle Sam gets to keep the rest, I guess. Secondly, the total taxes over the course of those thirty years, should I live long enough to get the whole amount, would be closer to three quarters of the total rather than sixty percent. It’s possible that I could live, but I’ve already beat the odds at winning the lottery, so why risk the other statistical improbabilities? If you win the lottery, assume you will be attacked by a shark, struck by lightning and develop a long-lasting pen-pal correspondence with Vladimir Putin exchanging deep personal feelings and tips for how to make the best borscht.

Despite how nice it is to fantasize about winning the lottery, there are serious real-world problems with a sudden and massive influx of money. The largest of these problems isn't the sudden wealth, but the attention one will get. Lottery officials are required to announce winners to papers and news organizations via press release in almost every state. A large sum win may even make it to the national news. For me, when a person in Wichita wins a bazillion bucks, it's just a name and a slight pang of jealousy for a person in a place I know nothing about. To someone who has lived and worked locally for decades in the same place, to win that much money is to have a target placed on one's back.

That thought fills me with dread. We know literally hundreds of people because of where we live and work in our town. Many of them are no more than just a smiling wave and nod but each of them would suddenly become a potential friend if we got very rich very fast. The doorbell would have to be disengaged. We'd have to move somewhere remote and barren of people like Antarctica (well, we could probably afford it). Word travels fast in a small town. There would be no escape from ‘friends’ asking for money with every kind of sad story and lament imaginable. Some of those stories might be true, some not, but I’m not in the business of knowing the difference outside of our family and very close friends, so the prospect of suddenly being expected to dole out cash winnings is unpleasant.

I fully empathize with anyone who legitimately needs help. Owing money can be a painful thing. In their shoes, I might ask a newly minted millionaire for some cash, too, in that circumstance, especially if someone in my family was quite sick. The problem I would have is with the temptation to help. Worse than knowing that someone has that kind of money is knowing that they are willing to share. If I helped one friend in need and not another, we might have serious issues. 

There would also be the safety concerns. A woman in the 1990s won a comparatively small lottery amount and found that an unbalanced coworker had slashed her tires, killed her cat, tried to kidnap her mother from an assisted living facility and made badly faked pictures of her in a compromising position with her supervisor all to extort several thousand of her meager few hundred thousand dollar winnings to pay off a gambling debt. This is only one of thousands of stories of people who, finding their dreams coming true, were later found dead or kidnapped or had children and pets threatened or harmed. Right now, if we want to, we can walk downtown and get a bite to eat or just stroll leisurely through the leafy neighborhoods surrounding our own. Having the world know we’re suddenly super rich would be deeply forbidding. We'd have to have a security detail. No more strolls. No more going outside at all. Trips would have to be rare and only after months of planning. Forget running to the store to get alfredo sauce. We'd have to hire shoppers, people to impersonate us, doughty former marines to go with us anywhere and add an alarm system and network of cameras all over our house and property. The thought is not a pleasant one.

None of this even considers the fact that, suddenly, one has lots and lots of money that has in no way been earned. That's a problem in itself for most regular people. Large sums of money are like galactic distances. We can talk about them all day and never really have any sense of what their values truly are. Two-hundred million dollars is a lot of cash. To be in possession of that amount basically overnight proves too massive a change for most people. Psychologically and emotionally speaking, suddenly being rich might actually be quite devastating to a grounded, rational, typically functioning human being. How many people do you know that are typically functioning or well-balanced?

Stories abound of men and women who won lots of money and then quickly went around the bend and became candidates for committal. Some rapidly spend all their cash on frivolous items; sports cars and helicopters; jets and massive yachts. Some decide to have a whopping party, spend hundreds of thousands on booze and drugs and dancers and bands and then wind up in legal trouble (or worse). Hard to spend that money from prison. Some people do better at saving, but begin to become paranoid because of all those new friends who keep showing up with proverbial hats in their hands. There are those, too, who change fundamentally overnight, leaving long established and otherwise happy marriages and children to hide out on some Caribbean island surrounded by bikini-clad women and getting tribal tattoos. Money makes people behave strangely even in normal, non-lottery cases. Just ask any CEO or Bond villain billionaire you happen to meet and see if they are in any way what you might define as normal, mentally healthy or typically functioning.

If one has the misfortune to win a vast amount of the green stuff, there are appropriate and cool-headed ways to deal with it and stay safe (relatively). Our son is an investment banker and certified financial planner and he has made clear what to do in the extremely rare case one of us ever wins the lottery. He recommends not claiming the winnings right away. Instead, we would hire a trusted lawyer who deals with finance (make sure they’re from a smaller, more trustworthy firm with experience in these matters) and put them on retainer. Then, once everything is prepared and the paperwork signed, have the lawyer claim the ticket and winnings (thereby keeping the actual winner’s identity a secret) and have the money doled out by the lawyer, acting as an executor or trustee. Even this, Ethan says, can be locked down and tweaked for specific requirements. One could have the trust set up in such a way that even the winners cannot get access to it except at certain times per year or under limited circumstances, limiting access for those impulse buys and also preventing anyone from being able to take a hostage to get at the cash. 

It all sounds like a headache just to pay off some debts and be free to not go to work every day. I ought to point out here that perhaps our system is broken if the only way that people feel they can be free of the massive work-a-day responsibilities in order to have food and shelter and the peace of knowing that I may just be able to retire sometime before age ninety is to hopefully win the big bucks lotto. I admit that to me winning a large sum of money sounds good on the face of it, just for this reason. I like my job and am grateful for the chance to do something I believe in, but given the chance and the financial independence for us to travel the world and raise sheep and bees on a small but lovely wooded parcel with a beautiful view of the sunset and not have to clock in or bow to the false hierarchies of capitalism, I’d take the latter without much hesitation. When we consider just how big a headache the money becomes and what might be at stake—relationships, mental health, our lives—I think it might be better to just go on hoping with fingers crossed that we never have the horrible luck to win super mega millions. Perhaps, though, I will befriend a billionaire Bond villain, in which case, we should be golden.