What should I suggest that my friend do?

15 years ago

We got to know one another fairly well when his wife was running for Federal Parliament several years ago and I helped with the campaign ... and she was on our city's executive committee for a few years, recently.

When visiting a few days ago, he said, during the course of the conversation, that he'd won the lottery. To the tune of slightly over 3.5 million.

He has a couple of brothers and shared a substantial portion with them ... and has given quite a bit to charity ... and their favourite political party (we had an election in our province, recently).

When I asked whether he'd ridden in a limo to Toronto to pick up the prize, as many do (and are publicized for it), he laughed and asked what did I think, as he's a pretty low-key kind of guy (he hadn't - just his own car).

He said that the lady who interviewed him on video tape said that he was the worst interview that she'd ever had, as most people jump up and down, are going to go to Florida ... buy their mother (or themselves) a house ... pay off mortgage, etc. Smiles, laughter, singing ... cluttering up the place.

Ted just said that he figured that he'd give some to family, some to charity, some to favourite political party ... that was about it.

When I expressed thanks and appreciation for his generosity, he said that, he didn't know - that wouldn't many of the rsidents of our city do similarly? The potential number may be somewhat smaller, I think. When he asked whether wouldn't I act similary ... I agreed that, yes, I probably would - but I'd never get the opportunity, as I never buy lottery tickets (they being a poor investment, in my vocabulary).

So - what suggestions should I make to Ted as to what to do with the rest of the money??? (Should he happen to ask).

ole joyfuelled

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Comments (13)

sleeperblues
15 years ago
Are you saying he gave you a gift of money? I'm not sure I read that correctly. If so, I'm happy for you. And certainly congratulations to Ted. But it doesn't sound like he needs any help with the disbursement. Seems to me he's spending the money exactly how he wants, by giving it to people and causes that mean something to him.
patti43
15 years ago
Well, OJ, I don't think you need our input since you are a student of investing money wisely. I'm sure not, but I know gold would be a good investment right now. The best advise I could give would be to get a good investment counselor (or whatever they're called). That's an awful lot of money and, truthfully, I'm glad it's him and not me. Not that I wouldn't like to know what it's like to be wealthy, but because I think it changes people.
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Georgysmom
15 years ago
I don't think it changes everyone and I sure wouldn't turn it down if it came my way. However, it's not likely since like OJ I don't buy lottery tickets. It was very nice of your friend to share some of the winnings with you...at least that was the impression I got. He's been very generous with his winnings so far. It sounds like he's not too needy. Even so, saving some for a"rainy day" would be a good idea. As far as investing it, you're the expert here.
sue_va
15 years ago
When I expressed thanks and appreciation for his generosity, I think OJ was thanking him for those choices he made, just as so many now are routinely thanking veterans for their service.

Sue
sushipup1
15 years ago
Perhaps your friend would like to sponsor a college scholarship for a deserving high school senior? Maybe to his own alma mater? Or to a local high school? Or in a field that he cares about, a student who wants to study in a field that he likes?

There's something special about investing in the future, especially in the minds of the future.
joyfulguy
Original Author
15 years ago
My thanks was along the line of general principles, of thanking someone for a job well done, for consideration of others ... he hasn't offered me a nickel ...

... so far.

I'm considering making some suggestions ... largely along the line of spreading tax savings out, rather than qualifying for them all at once but having a major portion of them die unused.

They're of retirement age.

o j
suzieque
15 years ago
Sounds to me like he already knows what he's going to do and has already done some of it. He sounds as though he's pretty smart and on solid ground. If he doesn't ask you for your advice, I'd suggest you not give it (in other words, MYOB).

Or did you simply want to get into a discussion (here and/or with him) about your apparent opinions on investing? I think some of your opinions on investing are sound, but that some of your opinions on how to save are not. But I don't involve myself in those threads. To each their own. :-)
jemdandy
15 years ago
I think he has his mind already made up. if you asks for advice, he's probably looking for a confirmation of his thoughts. But then, if he asks, give him your best advice. Whatever you do, direct him toward a positive endevor; Caution against "blowing" the wad of money.

I sould point out that he now has the chance to build himself an income fund that could work for him the rest of his life. I would look for sound investments. At least half of the fund should be blue-chip, dividend paying, stocks. Go light on mutual funds. When you have enough money to buy enough different stocks, you can create your own "mutual" fund and skip paying the fund fees. In the long run, you'll make more money. Be careful about munincible bonds. Because of the economy meltdown, many cities, counties, and states are nearing bankruptcy; some are already there. Munis are a good investment, when they are sound, since in many cases, tax codes allow reduced taxes compared to regular dividends. However, if you invest in a school system and it goes banktupt, you loose.

In better times, a chunk shold be in CDs or similar. In the past, those have averaged 5% dividend, but not now. The rates are so low, they do not keep up with inflation. I'm not savvy enough to know the entire picture, but I don;t like the idea of some financial instutition using my money for nothing while their executivies roll in cash. My take is they don't get to use my money until I see some return! I can make about the same by holding the cash in a saving or checking account, and it very liquid to boot.

Mortgage rates have slipped to 4% and that sets the tone for how much one might get on an interest bearing account. Your take will less than the mortage rate.

Drug comapnies may appear attractive and some are, but before you leap, look at the number of patented drugs in their pipeline, and the date when patent protection runs out. For example, Abbott Labs looked like a good steady dividend payer 2 years ago, but today, they have only one patent protected drug and none in the pipeline. The patent protection on this drug runs out in a couple of years or more and it provides a large amount of the company's income. Abbott has announced they plan to split the company into two businesses spinning off the drug development division into a separate company. Abbott Labs may be an ok investment, and then maybe not. Caution is advised.
minnie_tx
15 years ago
I have the same problem as your friend . I haven't won the lottery yet but after generous gift to family and friend what to do?? I know I's set up Marilyn C something for the continuance of her animal care and a few others but really. . . There must be a site somewhere with some good advice for winners or potential winners.
minnie_tx
15 years ago
I did a google on good advice for winners and found a lot of sites I'm going to look at them later

Here is a link that might be useful: good advice for winners - Google Search
cynic
15 years ago
I like what he's done so far. Frankly, he's doing what he wants, as he should and I would commend him for doing what he's done and applaud his generosity and common sense. Beyond that, sounds like he has a level head and sure wouldn't need my advice.

It's nice to see deserving folks win.
workoutlady
15 years ago
I think you should tell Ted to give the money to me. That would be the best investment of all. LOL.
joyfulguy
Original Author
15 years ago
Hi scissors,

And without being too cutting to you ... what would you do with it, may I ask?
_____________________

Did go to visit, and talked of setting up a charitable foundation, but that would take several hunded thousand or half a million to justify the set-up and ongoing admin. expense ... and would throw off a large tax credit all at once, and they need a smaller one on an ongoing basis. I think that they could claim part of the credit now and defer the rest.

Told how I used to give cheques to a dozen or so charities, then gave a single gift through the London Community Foundation, with instructions to send a certain amount to each of the charities (which they can send to most via electronic transfer) and they like me to leave some for them, so I've given them about 10%, which seems to satisfy them.

Later, I chose to transfer some stock/mutual fund certificates which had developed substantial capital gain to them, which meant that I didn't have to pay tax on the capital gain. If I'd sold the stock, then give the money through them, I'd have to pay tax at regular rate on half of the capital gain.

That way, they could contribute what they chose to, each year, depending in part on how much charitable contribution tax credit they wanted.

He was aware of most of that ... and we got a chuckle out of the fact that he'd closed most of his stocks a few months ago when he felt that the market was too high ... so didn't have much in the way of stocks which had developed a major capital gain.

They'd won it back in the spring, but he hadn't checked the numbers right away and had been under the weather through much of the summer, then in the fall his wife had been campaign manager for a candidate running in our provincial election ...

... so they'd been busy.

Good idea for one to keep one's priorities straight, right?

Let's see ... interest at 3% (afer-tax) on $3,500,000. for about 4 months would run something like ...

... oh, sorry - the calculator's at home ... and what have I said about young folks these days being so tied to calculators that to ask them to figure out mathematical calculations in their head is a losing enterprise?

Is it $35,000.00 ... really? (They have a calculator in the computer).

ole joyful

What should I suggest that my friend do?

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