Imagine this…
Against your Oz-Bargain spirit, you buy a ticket for this Thursday's powerball draw. You watch the draw and how's that - you've won! You've won the whole $10 Million!
If this happened to you this week, what would you do with it?
10 Million Dollars
lemc6125 on 18/03/2015 - 19:45
Comments
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in ozbargain :D
so did you win?
so did you win or?
It hasn't been drawn…
so, did you win?
With 10mil, OZB is now beneath him and he no longer has to save.
… forgot to buy a ticket…
Take the annuity option (payout over 20 years I think it is) travel for a year or two whilst saving up for a place to live as even after winning powerball the average place is over 800k in Sydney.
Take up whatever training courses you were thinking about and do them because you can. Have a serious look at what you want to do work wise and find whatever is most agreeable to you without the worry of having to earn a living.
Last but not least is trying not to shout to everyone that you have moneybags whilst trying to help those around you which would be the most difficult task. More money than I can dream of earning but hundreds of thousands of dollars can still go missing over a year or two.
Annuities are a good investment option, they even have inflation protection.
Yes, but how do you manage risks like a 1929 style depression (where the annuity issuer could disappear) or Argentinian style sovereign default (where the payout could remain but be worthless). Need to be careful where you put your money and in a mix of assets.
I thought Australian lotto winnings are tax-free and lump sum? Only American lotto winnings have an annuity option?
yes Australia is one tax free lump sum.
Scrimshaw is suggesting you invest the tax-free lump sum in an annuity after you receive it. Effectively buying yourself a fixed term or lifetime pension, either at a set rate or inflation linked.
There are a few Aussie contests that have an annuity prize. NSW has a 'set for life' scratchie that pays $5k/month for 10 yrs, and I think I read Vic was getting a similar lottery.
We're leaving this dump. Forget the normal cab, we can afford the Silver Service!
Step 2: order Domino's without a coupon code.
Ballin'!
Nope. Nope. Nope.
Couldn't do it. Not even with $10M in my back pocket.look for deal with Uber
Delivered!
I upvoted this comment BEFORE it was cool.
8)
A McFlurry at menu price.
Eneloops
If you could get a solid 4% return then you'd make $400,000 per year without ever touching the principal.
If you couldn't live on that as an Ozbargainer you need to have a good look at yourself.
That's what I would be looking at.On $10million the banks would be happy to offer you 4% or more.
Maybe. It gets harder to get a decent return the more you have to invest, which is why Switzerland and some scandinavian countries are offering negative government bonds!
What you talking about Willis? Large sum term deposits have always been subject to special rates of interest, well above the headline rates.
This is no longer meaningfully true.
Look at the terms on most high interest saving accounts, They will have an upper limit that they will accept.
In the past, the main return to the bank was loaning out your deposit to others.
These days, they pay above the norm interest to online savers as a way of marketing other financial products to those people who have money to invest.
I can get a better rate for 12 months for $10k than $10m.@mskeggs: I don't believe that at all. Term deposits have always had upper amount limits, it never meant that banks didn't deal with bigger sums on an individual basis.
On $10million the banks would be happy to offer you 4% or more.
Care to link to one that would take the full 10M @ 4%
mskeggs is correct
Sadly this isn't true guys. I have worked at a bank and while your general term deposits over the counter may have upper limits; banks WANT people with big sums to come in and negotiate.
I've seen someone get a solid 2% above best Market rate many times.
Forgot to add. Often the bank isn't just wanting the money for their own financial reasons; it's often because they don't want another bank having access to a high net worth individual.
So they can often pay to have you as they know HNW individuals have premium needs elsewhere financially.
@TheBatman101:
I agree that you will get a higher term deposit rate if you have more money to invest. What I was getting at is that the highest rate is in online savings accounts, which pay more to attract customers for cross marketing, and will put upper limits.
E.g. Ubank 3.77% online saver vs. Ubank 3.11% term deposit.
The saver is limited to $200k, and the term deposit to $2m.most of been a crap market rate, when the loan rate and the current savings rate is barely more than 1%
@mskeggs: Pffft thats barely above inflation. I'd rather buy a MacDonalds store or other stable businesses and have people run them for me. Plus it'll keep you busy when you eventually get bored of relaxing too much
I very much agree (well, not a maccas, but a business with consistent revenue and similar stability).
But with such a windfall, it would be sensible to diversify and hold some other assets here and abroad to hedge against disaster.@mskeggs: ya, i agree, you can never go wrong if you diversify properly. Property, businesses, stocks and maybe a bit of bullion just for fun. Plus, owning assets in other countries gives you a good excuse to travel and have yourself an adventure.
I would never put all the $10 Mil into one place.
Yeah, banks are one option but not the only one.
There are plenty of solid blue-chip companies with yields over 4%.
It would be hard to find a decent managed fund that wasn't returning over this.
Mortgage-backed securities also offer well over this figure.
Do your own research but these are some options (with varying degrees of risk.I would need to win $10mil before looking into it. Somehow don't like my chances…
Don't forget the poor old taxman
(Profanity) taxman, they are not touching my $10M peanut money.
Is there any efficient way to move $10M overseas?On a big yacht.
You can put it in a no interest bank account (which of course you won't get the 400K (on current rates) every year). The $10m is a tax-free "windfall" gain.
There is no restriction on you moving your money wherever you like. If you ship it as cash it must be declared, but it isn't restricted.
If you invest abroad, but stay an Aussie resident for tax purposes, you need to declare any income on your tax return.
Most people concerned about this would probably look into gaining residency in a low tax jurisdiction. Think Caymans, Solomons or Channel Islands if Europe is more appealing.
Or set up a business in such a place, loan it your money at zero interest, then get it to employ you. You would need to declare salary to the ATO if you stayed resident here, but your foreign employer could give you perks like a company car/house/meal allowance.
This is basically how Google and Apple ship their profits out of Oz with only a skerrick of tax being paid.
U have to pay tax on the interest earned buddy. So ur getting 50%
It's still $234000 after tax.
yeah, and there's a thing called inflation as well… if your gona leave a conservative 2.5% in the bank… how much are you really getting?
Hence my question. In some countries you pay no tax on interest earnings.
Is there any efficient way to move $10M overseas?
@T1OOO > Would you invest in robotics?
You can also move overseas to some cheap countries in SE Asia, keep the money in Australia and declare yourself as a non-resident to ATO. For interest earnings it's only 10% withholding for non-residents.
Are u sure ? I thought it was the top rate as if u didn't declare.
Also. Banks will only guarantee 200,000k of ur money. The rest u could lose. Yes will never happen here ?? State bank anyone ?
Our banks are too big to fail. The 2 biggest in America has to be bailed out. English oldest bank leahman bros went up creak. No 1 helped them.
Buy some gold.
I think you mean Barings the UK bank. Lehman Bros and Bear Sterns were American investment bank failures, and there were plenty bailed out.
For the record, the AU gov will guarantee the $200k per person, per authorised deposit taking institution, so you can have $200k at Westpac, $200k at Bendigo etc.
If you have $10m this sort of risk is quite real. And you also run the risk of the government not being able to afford the guarantee if things got grim (e.g. like Iceland).A large asset base requires diversity for security reasons.
Step 1, by far, is go to your accountant, set up a discretionary trust that you fund with $2m.
Make it a corporate trustee, with yourself (and possibly 2 others you trust implicitly if you think you might make bad calls!) as directors.
You are now fireproofed from any dumb decisions you make, as nobody can sue away your last $2m.
Cost will be about $700 p.a. to operate this set up. You might want to consider setting it up off shore if taxation is an issue, maybe even somewhere like Switzerland it you worry the AU government might change rules in the future. Invest in a broad range of safe assets (various cash options in various currencies, a residential property somewhere you could bear to live would be a reasonable option too). You want to hold some growth investments too, to stop inflation eating away this nest egg.
You now have complete freedom do take risks/do anything with the other $8m knowing you will never be out on the street, no matter how badly you screw up.With the rest, it's time to start doing things.
Various studies have shown that material possessions after a surprisingly low bar, don't increase happiness, but doing good, achieving milestones, building close relationships and working towards a goal all do increase happiness (oh, and involvement in religion, spirituality stuff, which sits uneasily with me).
I would look toward running a few businesses in my local neighbourhood - a cafe, maybe a bar, possibly a couple of simple shops. The idea being that I could accept a less than market return on the money invested, pay above market wages, keep my mind active with a bunch of new challenges, help the local unemployment rate, up my involvement with local groups and lead a useful life.
I think such an approach would be very personally satisfying, and be positive for the wider community (a bit like a Kiva loan but on a big, hands on, local scale) and be engaging for me.
I'd probably like a month travelling in Europe each year too ;-)Can't directors still be sued for negligence?
Yes, but the trust insulates the directors from such a suit (well, unless the shareholders were not also the directors, which they probably should be). All the directors do is appoint a trustee. The trustee can be personally liable for negligence (hence why have a corporate trustee) but the proceeds of the trust would then be protected.
It is a very effective form of protection of assets, but the main limitation is people don't want to extend credit to you, as they have limited recourse to recover it if things go bad.
In this case, where there are substantial assets, that is less of a problem.Good work mskeggs.
Setting up a unit trust and superfund wouldn't be a bad idea eitherWow - love getting legal advice on the internet!
So, isn't the trustee entitled to indemnification out of the trust assets? How sure are you that the corporate trustee could never be wound up?@BigTed:
If the corporate trustee is not carrying out any business except acting as trustee, it has no creditors to apply to wind it up.
This isn't some super complex thing, it is the routine way discretionary/family trusts are structured. Any accountant will be able to advise.
Do NOTHING. Here's a very good detailed comment on Reddit about it. It's a very interesting read to say the least -> http://www.reddit.com/r/AskReddit/comments/24vzgl/you_just_w…
I can't read that without my bull***t meter screaming, but at the very least, consider that things are very different in Australia.
LEt's just agree that winning the lottery isn't something to be avoided ;-)
I read a good deal of that Reddit thread, I almost DON'T WANT TO win the lottery after that. WHAT A HASSLE! LOL
America…
@ranmalynx thanks for the read.
I'm so glad we don't have to pay taxes on lottery winnings here in Australia :)
Actually, if I won the lottery then I would be glad, I guess.. :(
If you win you Better Call Saul ASAP
buy another lotto ticket to win the next weeks jackpot as well.
"what would you do with it?"
Stop imagining :P
Best answer
Going to buy a small shed in sydney.
Lucky bastard living rent free.
Strata and council fee will be $10k per quarter, kthnx.
I'd buy something full price at David Jones!
Calm down, high roller.
I'd sue anyone that had wronged me in the past, then I'd sue the government.
you're going to need more than $10mil!
The only winners will be the lawyers.
Buy a house for each member of my family, put 50% of whats left in a term deposit, drink the rest.
Pay off my house and go on a holiday. Then come home and quit my job, and go study a Masters in something useful, then start at the bottom of the rung and work my way up to a good wage.
Avoid telling anyone I've won. Give away $1 million to charitable causes I believe in. Invest the remainder. Keep working my job, keep renting my apartment. Find a girlfriend who doesn't want me for money and doesn't know I have the money.
Yeah I always see those stories on ACA about families becoming ruined after winning a fortune. They usually don't know what to do with the money so they blow it on gambling, houses or they have greedy family members.
Because happy stories don't catch eyes and sensible winners don't want to expose themselves to ACA.
So, you'd lie to your gf?
Not a lie but just withhold the info. At a later time it could be disclosed to her as a surprise.
After the prenup?
Why would anyone want to work after winning $10 M? This is bizarre. You are not born to work but to be happy and enjoy the 'thing'called 'LIFE'.
what if WORK is my LIFE ?
"Life is not a problem to be solved but a mystery to be lived"
Some people (ie. myself) thoroughly enjoy their work.
My job pays very well, so I suppose, 10M means being able to offer services to those who cannot afford it. I get to do more work :)
What's your occupation may I ask?
I occasionally cut people up, drill into people and/or glue stick bodily thingies to other bodily thingies.
You are not born to work but to be happy and enjoy the 'thing'called 'LIFE'.
That is your belief and assertion. How do you know it's true?
A lot of people have spiritual beliefs that we are called to labour for an eternal harvest. (See Matt 9:37-38)
"And what do you benefit if you gain the whole world but lose your own soul? Is anything worth more than your soul?"
That is your belief and assertion (I assumed that you lumped yourself into the "A lot of people"). How do you know it's true?
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Spend it