What I'd do with a $20 million lottery win

Note: I will be starting college again March 1st.  I will be attending Western Governors University.  I originally wrote this for a scholarship from Yakezie.com to help pay for college. but was about 3 hours late turning it in.  I think I did a pretty good job so I figured I’d post it here.

I believe that if I would to win a $20 million dollar lottery, while portions of my life would change, overall, my life wouldn’t change very much.  Upon winning the lottery, I would immediately call my dear sweet wife.  She is a stay at home mom to our three beautiful children.  My wife and I would go out to dinner so we could discuss our financial plan.  The next day, I would write a check and pay off the mortgage.    I would also write a check to my Church for 10% of the winnings.  Of course, the government would also take 30-40% in taxes.  This would leave me with about $10 million dollars. I would take the money and divide it up into various bank accounts so that no one bank was above the FDIC coverage limit (I have had several banks that I have dealt with fail).   I would tell my family, but I don’t think I would tell many, if any, other people.  There just isn’t a smart reason to tell non-family members.  They would either think I’m bragging, or want to borrow money from me.   I do think I would take a weeks’ vacation from work and go on a nice trip with my family.  When we got back (or perhaps before we go), I would setup trust accounts for each of my 3 children for college, fully funding, with some extra, their anticipated college expenses.  I would then purchase some real estate and rent out the properties, to help bring long term income into my family.  I would talk to my parents and my wife’s parents about paying off their home mortgages, thus bringing some financial peace to them.  I would keep $5 million dollars in good growth mutual funds to allow this money to keep growing.  By having this money grow at 6%-10% annually, I would bring in at least $300,000.00 annually that we can live on without touching the remaining $5 million.

However, I would not stop working.  I may quit where I was working and find a job that I would enjoy more, but I would keep working.  I might get out of the rat race and start my own business.  But I would do something.  People who do not continually engage their minds lose them, thus I want to make sure I am always problem solving and finding creative solutions to various problems.  The problem with winning this (or any other) money is that money does not bring happiness.  Money is simply a tool.  It’s how you use it, or abuse it, that matters.  I do not plan on blowing through this money, but to try and be wise with it.  I believe that by following this simple plan, $20 million dollars would positively affect my family for generations.  This is the problem with so many lottery winners, famous actors, sports stars, etc, is that they do not have a plan.  They live like every day they’ll earn millions, but lottery money can run out, actors fall out of favor, stars stop shinning as bright.  All too often, they enter denial, thinking that is they purchase one more lottery ticket, have one more auditions, one more tryout, everything will go back to “normal”, or back to how it was.  But, that rarely happens.

I do not believe that I would ever win a $20 million lottery (in part because I have never purchased a lottery ticket in my life, nor do I plan on doing so in the future), but these principles work the same way on a $30k, $50k, $100k, and a $200k a year salary; spend less than you have and prepare and plan for your future and your families future.  This is how you gain financial peace.  Dave Ramsey, a financial author and motivational speaker, always says that your salary is your best source for wealth creation, which is one reason why he teaches debt free living.  My wife and I have been working on doing getting out of debt, and we are now, except the mortgage.   We are committed to staying out of debt, which I believe will help us in our life more than most people who win a $20 million lottery.