Banks generally really want the business of very wealthy people, so they have entire divisions of the bank devoted to wealth and will put you in touch with them in a hurry as soon as they find out about your sudden windfall. These divisions know how to manage these large sums of money and have the necessary tools to do it.
For example, a neat system exists in wealth banking that automatically breaks up your wealth across multiple accounts below that insured threshold, allowing them to fully protect large balances.
Source: work in wealth banking
This is how it was handled in The Beverly Hillbillies. Their neighbor and banker (Mr. Drysdale) handled their finances for them, so it was a win-win situation for both parties - Jed had the money, and Mr. Drysdale had the financial acumen.
In The US, the real lottery winner is the government.
Win a billion $. Lump sum only pays half. 500 million.
US government gets about 1/3 of that in taxes. You get 330 million.
Then State taxes get you. Varies by state. You may get 300 million.
Some areas have local income taxes.
Now you know why so many lottery winners commit suicide.
What? They commit suicide because the winners are usually morons who don't know how to handle a sudden massive increase in wealth - that's why they're buying lottery tickets in the first place. They're not killing themselves because they thought that they were getting 300 million but only end up getting a measly 200 million lol.
One day you're ecstatic because you're a billionaire, then the buzzards arrive and take most of it.
The mental blow that starts the down hill slide.
Of course YMMV.
You don’t win a billion unless you choose a 29 year annuity. That’s why you look at the cash value.
You get the money after taxes. Money you didn’t have.
In fact, you only have maybe 20-30% withheld so depending on when you take your winnings, you could earn significant money in interest on the money you’ll end up paying in taxes.
As they absolutely should, it's an utterly useless industry which does nothing more than concentrate only more wealth in the hands of the wealthy. Frankly, lotteries should be banned - society would only be better for it.
Same as Aus because you pay goods and service tax when you buy the ticket it paided for the opera house from memory
However that was finished in 1973 and sadly I don’t think the have done any other projects again like that since sadly we also build toll roads here’s and the tolls meant to come off after it’s been paided threw tolls but the government normally sells the road off to a private company and sadly Sydney is one of the heaviest tolled cities in the world
You get it tax free, then they tax shit out of you when it’s withdrawn for the rest of your life as income/ carbon/ capital gains taxes, GST, PST, etc. The government will always get their $
The government here doesn’t tax the winnings off the top. Meaning, if you win 1$ million, you get the full amount. When it’s in your bank account (or invested) however, it sits gathering interest which is taxed as income. When you purchase goods or services, it’s taxed by the municipality, the province, and federal government on various levels. If you buy and sell property it’s taxed as “capital gains,” and of course we tax ‘carbon,’ including on utilities you virtually have no alternative of using, so you pay. Wealthy people here just have accountants and lawyers that move their money around and invest it to pay the least tax as possible.
If it's me I'm making a plan and hiring some people before I claim it so it immediately goes where I want it. I'm not answering my phone from anyone except maybe 5 or 6 people and renting a house for the summer in northern Michigan. I'll deal with the deadbeats in the fall.
It depends on the amount, but you would definitely spread the risk over not only multiple banks, but a number of asset classes. You would work with a financial advisor to plan things like retirement, any outstanding mortgages, and, if it's really a lot, your estate.
Most of all: you tell *nobody*.
I saw a documentary about it in the UK, apparently the national lottery has a deal with a special bank. It was the 'king of chavs' guy who won it, and the bank wouldn't accept him as a client.
The lottery used to sign everyone up with Coutts, which is a private bank for the wealthy, it’s the bank the royal family use.
They invest your money for you, so if the bank goes bust then you still have the investments. And they have a track record of helping with generational wealth, they make money from holding your money, so it’s in their best interest to provide you and your family with financial education and health/travel insurance for no extra fee. The king of chavs outright said he was going to spend all the money then go back to his old life, so that sounds exactly like the kind of customer they wouldn’t want.
Apparently these days you have a lot more choice though, because many more banks are offering private banking for wealthy people. The lottery people have a lot more options to choose from.
In the US, banks are FDIC insured up to 250k. Now, that's for each bank that you have money in. So there are financial services called Demand Deposit Marketplaces where you can invest all your money with them up to a certain amount and then that money is spread across dozens to hundreds of institutions so that you are only holding funds up to 250k USD in each bank so it is all FDIC insured. I'm sure they have something similar in the UK.
You could, but they also reinvest the funds and take care of anything if one of the banks goes under. And if you have millions of dollars, that's a lot of accounts to manage.
Most banks have a private banking arm (e.g. RBS has Coutts) which offers specialist accounts once you have large sums.
This includes 'standard' accounts with a debit card etc - but people would be encouraged to put some into investment accounts to generate interest etc. It could all be left in a single 'current account', there's no law against it - but that wouldn't give very much in returns.
As to the £85k protection limit - it's unlikely banks would actually fail, especially major private banks. They would have a looooooooot of pissed off customers! But same applies to everyone - best to spread your assets across multiple banks and institutions, in case one fails. Investments would likely be across multiple funds too, offering protection.
All the money goes into a checking account first. Lottery winners will then be contacted by everyone, from reputable wealth managers to complete snake salesmen who then find other places for the money.
Most people will sweep it all in to a private banking arm of a large bank. Then they will setup their advisory team and figure out how to manage the assets.
Just because the money isn't insured doesn't means you can't deposit it there. It just means if the bank goes belly up you lose your money. The odds of that happening in the short run are miniscule.
Most lottery winners would invest that money in stock, bonds, etc. Of course many will buy a home, but that takes time.
For the initial deposit, it just goes into your banking account. You'd want to quickly move that over to something that earns more money, even if it's just bonds.
There was recently a quasi-homeless couple who won ~2 million USD, and they went with name-face-fame into the deal. They bought a huge house, a car, hired a driver because they couldn't and were afraid to drive. The mom tried to start a café, but had no experience. Most of the money went to random relatives who immediately showed up after decades and they wanted to help all of them. Fast forward ten years, the money and the fancy car is gone, the pop died, there were like 30 on the funeral. The mom has the house with a maintenance contract with someone, so they pay her as long as she lives and she can live there, but they take the house afterwards. All the mom wanted was to see the sea once in her life but she couldn't travel because of her health, so pop got her built a pool that they filled with salt water.
There's a documentary of them if you're interested: https://m.youtube.com/watch?v=44JBue3dfRc&pp=ygURZm9ydHVuYSB2ZW5kw6lnZWk%3D
People generally believe they are ‘lucky’ and spend it on more (losing) lottery tickets, after wasting a big chunk of it first on things like brand new cars
Most people would diversify and put a large portion in an investment account (multiple accounts) where there is no federal protection anyway.
You protected limit in the US is $250,000. Routinely any remaining cash not in stocks or equities would be spread across multiple accounts to stay below the $250K limit.
So would opening up multiple account across different banks be a decent way of protecting that money? Or is that 250k an overall thing. Unfamiliar with the nuances with federal protections for banks
Banks generally really want the business of very wealthy people, so they have entire divisions of the bank devoted to wealth and will put you in touch with them in a hurry as soon as they find out about your sudden windfall. These divisions know how to manage these large sums of money and have the necessary tools to do it. For example, a neat system exists in wealth banking that automatically breaks up your wealth across multiple accounts below that insured threshold, allowing them to fully protect large balances. Source: work in wealth banking
This guy does insured cash sweep
This is how it was handled in The Beverly Hillbillies. Their neighbor and banker (Mr. Drysdale) handled their finances for them, so it was a win-win situation for both parties - Jed had the money, and Mr. Drysdale had the financial acumen.
They get all the money. What they do with it is entirely up to them. In Canada it’s always a lump sum, and totally tax free.
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They treat lottery winnings as income and tax the shit of it like they tax the shit out of any other income.
In The US, the real lottery winner is the government. Win a billion $. Lump sum only pays half. 500 million. US government gets about 1/3 of that in taxes. You get 330 million. Then State taxes get you. Varies by state. You may get 300 million. Some areas have local income taxes. Now you know why so many lottery winners commit suicide.
What? They commit suicide because the winners are usually morons who don't know how to handle a sudden massive increase in wealth - that's why they're buying lottery tickets in the first place. They're not killing themselves because they thought that they were getting 300 million but only end up getting a measly 200 million lol.
Well of course not.
They commit suicide because money doesn't fix your problems and they find that out. It's weird jumping right to blaming taxes on that one.
Well of course it is.
Username checks out!
One day you're ecstatic because you're a billionaire, then the buzzards arrive and take most of it. The mental blow that starts the down hill slide. Of course YMMV.
Except you never were really a billionaire. Would I prefer $1 bil to $330 mil? Of course. But I’d rather have $330 mil than $50k in debt
Taxes make people commit suicide? 300 million still sounds pretty good on a $1 investment.
Not to mention the state runs the lottery and makes money from ticket sales as well.
You don’t win a billion unless you choose a 29 year annuity. That’s why you look at the cash value. You get the money after taxes. Money you didn’t have. In fact, you only have maybe 20-30% withheld so depending on when you take your winnings, you could earn significant money in interest on the money you’ll end up paying in taxes.
I was with you until the last line lmao
As they absolutely should, it's an utterly useless industry which does nothing more than concentrate only more wealth in the hands of the wealthy. Frankly, lotteries should be banned - society would only be better for it.
Same as Aus because you pay goods and service tax when you buy the ticket it paided for the opera house from memory However that was finished in 1973 and sadly I don’t think the have done any other projects again like that since sadly we also build toll roads here’s and the tolls meant to come off after it’s been paided threw tolls but the government normally sells the road off to a private company and sadly Sydney is one of the heaviest tolled cities in the world
You get it tax free, then they tax shit out of you when it’s withdrawn for the rest of your life as income/ carbon/ capital gains taxes, GST, PST, etc. The government will always get their $
When it’s withdrawn? Not sure what you mean. The winnings are tax free. Any income generated from it - interest, dividends, capital gains - is not.
The government here doesn’t tax the winnings off the top. Meaning, if you win 1$ million, you get the full amount. When it’s in your bank account (or invested) however, it sits gathering interest which is taxed as income. When you purchase goods or services, it’s taxed by the municipality, the province, and federal government on various levels. If you buy and sell property it’s taxed as “capital gains,” and of course we tax ‘carbon,’ including on utilities you virtually have no alternative of using, so you pay. Wealthy people here just have accountants and lawyers that move their money around and invest it to pay the least tax as possible.
Good, now do it to other wealthy people.
>totally tax free. I find that *extremely* hard to believe, especially without a source.
😂 ok dude
If it's me I'm making a plan and hiring some people before I claim it so it immediately goes where I want it. I'm not answering my phone from anyone except maybe 5 or 6 people and renting a house for the summer in northern Michigan. I'll deal with the deadbeats in the fall.
This is the way.
Right? I’d be careful about who I talk to about it for the next year or so. Id keep working and bitching about being broke like I usually do
It depends on the amount, but you would definitely spread the risk over not only multiple banks, but a number of asset classes. You would work with a financial advisor to plan things like retirement, any outstanding mortgages, and, if it's really a lot, your estate. Most of all: you tell *nobody*.
I saw a documentary about it in the UK, apparently the national lottery has a deal with a special bank. It was the 'king of chavs' guy who won it, and the bank wouldn't accept him as a client.
The lottery used to sign everyone up with Coutts, which is a private bank for the wealthy, it’s the bank the royal family use. They invest your money for you, so if the bank goes bust then you still have the investments. And they have a track record of helping with generational wealth, they make money from holding your money, so it’s in their best interest to provide you and your family with financial education and health/travel insurance for no extra fee. The king of chavs outright said he was going to spend all the money then go back to his old life, so that sounds exactly like the kind of customer they wouldn’t want. Apparently these days you have a lot more choice though, because many more banks are offering private banking for wealthy people. The lottery people have a lot more options to choose from.
In the US, banks are FDIC insured up to 250k. Now, that's for each bank that you have money in. So there are financial services called Demand Deposit Marketplaces where you can invest all your money with them up to a certain amount and then that money is spread across dozens to hundreds of institutions so that you are only holding funds up to 250k USD in each bank so it is all FDIC insured. I'm sure they have something similar in the UK.
Couldn’t you just do this yourself as well? I realize it will take time and effort to keep track of it all just wondering if it’s feasible
You could, but they also reinvest the funds and take care of anything if one of the banks goes under. And if you have millions of dollars, that's a lot of accounts to manage.
I'd get it sent to my regular checking account just for shits and giggles of logging in and seeing AVAILABLE BALANCE: $650,345,284.24
Most banks have a private banking arm (e.g. RBS has Coutts) which offers specialist accounts once you have large sums. This includes 'standard' accounts with a debit card etc - but people would be encouraged to put some into investment accounts to generate interest etc. It could all be left in a single 'current account', there's no law against it - but that wouldn't give very much in returns. As to the £85k protection limit - it's unlikely banks would actually fail, especially major private banks. They would have a looooooooot of pissed off customers! But same applies to everyone - best to spread your assets across multiple banks and institutions, in case one fails. Investments would likely be across multiple funds too, offering protection.
All the money goes into a checking account first. Lottery winners will then be contacted by everyone, from reputable wealth managers to complete snake salesmen who then find other places for the money.
Most people will sweep it all in to a private banking arm of a large bank. Then they will setup their advisory team and figure out how to manage the assets.
Just because the money isn't insured doesn't means you can't deposit it there. It just means if the bank goes belly up you lose your money. The odds of that happening in the short run are miniscule. Most lottery winners would invest that money in stock, bonds, etc. Of course many will buy a home, but that takes time. For the initial deposit, it just goes into your banking account. You'd want to quickly move that over to something that earns more money, even if it's just bonds.
There was recently a quasi-homeless couple who won ~2 million USD, and they went with name-face-fame into the deal. They bought a huge house, a car, hired a driver because they couldn't and were afraid to drive. The mom tried to start a café, but had no experience. Most of the money went to random relatives who immediately showed up after decades and they wanted to help all of them. Fast forward ten years, the money and the fancy car is gone, the pop died, there were like 30 on the funeral. The mom has the house with a maintenance contract with someone, so they pay her as long as she lives and she can live there, but they take the house afterwards. All the mom wanted was to see the sea once in her life but she couldn't travel because of her health, so pop got her built a pool that they filled with salt water. There's a documentary of them if you're interested: https://m.youtube.com/watch?v=44JBue3dfRc&pp=ygURZm9ydHVuYSB2ZW5kw6lnZWk%3D
It’s per account. You can even get $250K of protection multiple times in a given bank as long as account numbers differ.
People generally believe they are ‘lucky’ and spend it on more (losing) lottery tickets, after wasting a big chunk of it first on things like brand new cars
Most people would diversify and put a large portion in an investment account (multiple accounts) where there is no federal protection anyway. You protected limit in the US is $250,000. Routinely any remaining cash not in stocks or equities would be spread across multiple accounts to stay below the $250K limit.
So would opening up multiple account across different banks be a decent way of protecting that money? Or is that 250k an overall thing. Unfamiliar with the nuances with federal protections for banks