Mega Millions Fever has hit the USA and the most interesting post involves financial planning. If you win, best wishes and Smart Money has great advise to make the winnings last a lifetime. If you do not have the winning ticket, this information may be helpful regardless if one has millions to invest or not.
Repost By Jonnelle Marte for SmartMoney.com
Chances are that few, if any, of those dreaming what they’d do with the $640 Mega Millions jackpot fantasize about what their financial adviser might say. That’s because these buzz kills with CFPs think lottery winners should be as boring as possible -- at least, that is, when it comes to their portfolios.
After taxes, the record payout is likely to be closer to $320 million as a lump sum. However, tickets purchased in states such as Delaware and California will be worth even more due to the lack of income tax on winnings, according to USAMega.com.
Regardless, the prize money should be more than enough to fund a lifetime of lavish spending. Too often, of course, lottery winners blow through the cash so quickly they end up bankrupt. That’s where the dullness comes in, advisers say. The winner might consider investing like a grandma, with a surefire and downright boring portfolio. "If they are conservative they can have an amazing life style year after year," says Andrew Feldman, a financial planner in Chicago. "If they take too much risk they may lose too much."
The sheer size of such a portfolio, advisers say, makes it possible to earn an outsize income with ultra-conservative investments. And lottery winners wouldn’t even have to spend a dime of their actual winnings to maintain millionaire lifestyles. Taken to the utmost extreme, investors could keep the entire stash in cash as three-month Treasury bills, where the $320 million would earn 0.07%, or $224,000. But no one needs to be quite that conservative, advisers say.
Instead, one approach could be to put half the winnings in high-grade municipal bonds, where the income earned is tax exempt, says Matthew Goff, a financial adviser in Houston. That could bring in roughly $3 million a year in income, he estimates. Another 40% of the winnings could be put in high quality corporate bonds, where it could earn about $2 million a year. And for the sake of helping the jackpot keep pace with inflation, the rest of the cash could be invested in dividend paying stocks.
All told, that adds up to an annual income stream of about $7 million, that winners can live off of without having to touch the prize money, says Goff. “You could be much more conservative than say someone with a more typical portfolio,” he says. “Risk taking becomes more of a luxury than a necessity.”
Of course, the reality of winning could be much more complicated when one considers phone calls from distant relatives, student debt and life-long dreams of owning a business. Winners will probably have to dip into their principal, for instance, if they want to set up a private foundation for children with disabilities or buy their high school a new wing, says Brian Kazanchy, a wealth manager with RegentAtlantic Capital in Morristown, N.J. They might also want to buy companies rather than just invest in them. For that reason, Kazanchy recommends separating a portion of the winnings to cover large one-time expenses like charitable foundations, family trusts and a business ventures. The rest of the cash can then be invested conservatively to cover living costs, he says.
Most people buying a Mega Millions ticket today will find the odds aren’t in their favor: the chances of winning the Mega Millions jackpot on Friday are about one in 176 million, according to lottery officials. And even those who win may have to fight for their share. But that doesn’t stop people from dreaming about it. Indeed, psychologists say just the act of playing the lottery and fantasizing about what one would do with the winnings makes the jackpot feel more attainable. “The enormous amount attracts attention and people inevitably think of what it might mean to win,” says Nobel-prize winning psychologist and behavioral economist Daniel Kahneman. “That thought, in turn, makes the event more plausible."
How to invest your $640 Mega-Millions
:::: Until Next Time: à Donf ::::
Friday, March 30, 2012
Tuesday, March 27, 2012
New Research on Cohabitating Couples
A new government study finds that men and women who live together before marriage no longer run a higher risk of divorcing like they did in years past.
Oh, but I should mention….being engaged helps.
"[Living together before marriage] is not playing as big a role in predicting divorce as it used to," said Casey Copen, the lead author of the study.
But the study, which surveyed 22,000 men and women, found that the divorce rate is higher if the shacking up couple isn’t engaged. So if you’re living together and marriage isn’t in the works, but you do eventually end up getting married, that marriage is more likely to end. How much more likely? About 7 percent.
Read Full Article Shacking Up No Longer a Major Divorce Predictor
Tags: Relationships, Divorce, Marriage
Tuesday, March 20, 2012
Thursday, March 15, 2012
Hemy Neuman Guilty Verdict
March 15, 2012, The Associated Press announced Hemy Neuman, the defendant in a murder trail accused of killing the spouse of whom he was having a affair, was found guilty.
The prosecutors proved to the jury Hemy Neuman knew right from wrong at the time of the crime, and the motive for the murder was jealousy. The victim’s spouse, Andrea Sneiderman, was employed with Hemy Neuman at General Electric.
According to Greg Bluestein’s Associated Press reporting “The jury's decision … means Hemy Neuman will go to prison, but he will get mental health treatment while serving his sentence for the killing of Russell Sneiderman in November 2010. He could face up to life in prison.”
Read Full Article Hemy Neuman Guilty Verdict
Until Next Time: a' Donf
Tags: Hemy Neuman, Relationships, Conflict, Interpersonal Relationship, Intimate Relationships, Relationship Dilemmas, Marriage, Divorce, Sex and Relationships
Saturday, March 10, 2012
Violent Relationships: Hemy Neuman’s Not Guilty by Reason of Insanity Plea
Losing Credibility. A new video in the Dunwoody Day Care Murder Trail may disprove defendant Hemy Neuman’s claim auditory hallucinations commanded him to harm Rusty Sneiderman.
By Dr. Lawana R. Lofton, PsyD -
Reportedly, Hemy Neuman was having an affair with Rusty Sneiderman’s spouse, and then “voices” of Barry White and Olivia Newton John instructed him to harm Rusty Sneiderman by using a fire arm to shot him four times at close range. Neuman added “Angels’ and “Demons” were also significant influencers prompting him to carry out such a crime.
Hemy is now on the record describing in elaborate detail all his previously planned scenarios he would execute to harm Sneiderman, yet there was always a glitch of some sort to foil the plan. As with any crime, elaborate planning suggest premeditation.
PREMEDIATATION: contemplation of intended crime: the act of thinking about and planning a crime beforehand, rather than acting on impulse in a moment of passion or mindlessness.
When one begins to analyze the level of ones planning sophistication used, the question then becomes; Was the defendant insane at the time of the crime? At this point in the trail it would seem testimony suggests Neuman’s reported Mental Health symptoms are inconsistent with someone suffering from a psychotic process; insanity at the time the crime was committed. A second question in need if further discussion is Neuman’s Mental Health History; Is there a history of Mental Illness?
Read Full Article Violent Relationships: Hemy Neuman’s Not Guilty by Reason of Insanity Plea
Until Next Time a'Donf
Tag: Hemy Neuman, Rusty Sneiderman, Andrea Sneiderman, Relationships, Conflict, Interpersonal Relationship, Intimate Relationships, Relationship Dilemmas, Marriage, Divorce, Sex and Relationships
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