THREAD CLOSED!!! Ask Rande 5000+: USE NEW THREAD

» MichaelC_AU - $120 Million to invest.

Nevermind the obvious, fact that it is 10x+ more likely that an individual would die on their way to buy the ticket than to win the record jackpot tonight;

What would your solution be to the problem of investing a $120 Million, after taxes, from the Big Game Lotto?

I personally would not trust anyone to manage my fortune as Pro-athletes and stars do. I am leaning towards using 3-5 very large banks initially to hold the money before buying the next T-bill auction out, in person.(how would this work) Perhaps, DCAing into an ideal percentage of GNMA fund exposure as those are seem to be looking more and more attractive.

Then maybe buying a small bank, I don't know, about that for sure but if bank PE's get any lower. . .

Or if Greenspan misses the runway entirely and inflation kills all, I can DCA over a 3-5 year span, travel and play, my way into the Forbes list over 15-20 years.

That would be a nice problem to solve.

What would you do, Rande?

-- posted by MichaelC_AU

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» Rande - Michael,

Michael,

Well, here in CA you'ld be left with about $175 million after the federal and state government was finished with the $350 million total (unless the state took a pass as it does with its own lottery). It would be tempting to think about a 100% high-quality muni portfolio -- hard to argue with around $9 million annual tax-free income. Would still probably consider somewhere around 30-40 percent equity exposure as a matter of stewardship for subsequent generations and philanthropic goals (ever the long-term thinker, me). Private foundation for sure and gifts in trust (through tax-favored family limited partnerships, etc., of course). Ocean-view home on Pebble Beach and lakeside place on Tahoe would be my big indulgences. Then lots of traveling. Of course, I'd continue to post right here through it all. Now, somebody pinch me.

-- posted by Rande

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» Kirk - If I won the big lotto

I think I'd buy a new windsurfing van to hold my gear and give all my old gear to Stanford windsurfing school rather than selling it.

Perhaps buy up all the rest of Suite101.com shares on the market and give myself a raise and double Gene's salary again. Probably double Rande's while I am at it since I am feeling so generous.

Lakefront property at Tahoe in Nevada (no CA tax!) with a slip for a boat to purchase later.
I'd want a guest house too for the caretaker to live in so when I come up to snow ski, the place is nice and toasty and he could also pick me up at the airport when I fly in.

-- posted by Kirk

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» Rande - Kirk,

Kirk,

Wow! A doubling in salary. You generous dog, you. Let's see, I'll figure that out on my Excel spreadsheet. What do you know, it comes to a grand total of #DIV/0!. Guess I'll buy another lottery ticket. ;)

<img src=http://www.internetcount.com/1867857677.cgif width=5 height=5>

-- posted by Rande

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» JackSwanson - Jack's bracing himself

Folks...Thursday morning is gonna be an event. Its the day we confirm inflation is out of control...and its the day we learn the fed raises .50 and worse yet...they leave us with a tightening "bias".

Its gonna be ugly folks. Roger will be out in full force, and Jack will continue to get slaughtered in his tech stocks. Haven't sold a share yet folks...but I'm battered and bruised...
Battipaglia, he's in total denial. He's still calling for a 5500 naz. Its not gonna happen. Right now, I'd be happy with a 3500 close for the year.

Folks...we're accepting "nominations". We're gonna tame the title this year, but we've already got a nominee. Its Liz Ann Saunders!!!!!!!!

-- posted by JackSwanson

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» AL_W - Pay Increase Solution

Since the High Accountant can't handle the calculation, I suggest we use a simple eng'r'ng solution...... A Flat Rate Fixed Contract.

Just pay Kirk 2cents for each article he posts.

-- posted by AL_W

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» Karin_ - Rande

ESTATE TAXES--THE UNIFIED CREDIT

On to more cheery topics as we move into the off-season: Death. Always
looking for the silver lining, we'll discuss a way to save you or your
estate some money. Estate taxes represent one thing--financial
devastation.

First let us remind you about the Unified Credit. The Unified Credit
will shield most estates from the estate tax. As it stands for 2000,
the Credit shields $675,000 from taxes. So, if your estate is valued
at $675,000 or less, you will not be subject to any estate taxes. For
those of you above that, look out--estate taxes will be levied on any
amount above $675,000.

The Unified Credit may also be available for use before you die. So,
if you have a house you want to pass on, you can use this credit to do
it tax-free. Thus, if most of your estate is caught up in your
$420,000 house, you can give it to your kids gift-tax free, using your
Unified Credit. But, when you die, your credit will be reduced to (for
2000) $255,000 ($675,000 - $420,000). Interestingly enough, the
Unified Credit is increasing steadily to $1,000,000 in 2006. So, if
you gave the $420,000 house now and didn't die until after 2006, your
Credit would be $580,000 ($1,000,000 - $420,000), which is darn close
to your original $675,000.

Is ESTATE TAXES the same as INHERITANCE TAXES?
Or is there some difference?

-- posted by Karin_

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» JenL_2 - From the May 2000 edition of the JOA

Just making Rande's links clickable:

---

Author: Rande (Rande Spiegelman)
Date: May 9, 2000 6:28 PM
Subject: From the May 2000 edition of the JOA

From the May 2000 edition of the JOA (Journal of Accountancy), some "Smart Stops on the Web":

www......

http://www.401kexchange.com -- Like e-Bay for 401(k)s, if your'e looking for a service provider

http://www.numeraire.com -- All about value investing

http://www.stockpickers.com -- Monitors stock picking sites

http://www.multexnet.com -- Provides access to investment research

http://www.powerize.com -- Access to national and international news reports and articles on investment, retirement, and personal financial planning.

http://www.aimr.com -- One of my favs, The Association for Investment Management and Research, sets the standard for investment performance reporting and sponsors the CFA (Chartered Financial Analyst) designation

Happy surfing!

Rande Spiegelman

---

Rande - The Stockpickers.com site has a for-sale sign.....Jen

-- posted by JenL_2

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» tma500 - Hi all,

Just found this article, hope its not misplaced here, Tara
http://www.business2.com/articles/2000/0...

-- posted by tma500

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» MichaelC_AU - The Big Game

Rande,
They make you choose up front now, whether you want it all up front or over 26 years. This morning the paper said that the lump sum option would pay $110 Million, after taxes, based on a $325M jackpot. Now the prize is $350M. My taxes (state & fed) would be about 45%. The calculation in the paper must have used 5% for a discount rate and omitted state taxes. I get 113M, from a $325M jackpot taxed at 40% or $195M left, discounted at 5% as an annuity of $7.5M over 26 years. I get $121.9M given the current $350M jackpot. It would be preferential if they use 5% as the discount rate instead of the current risk free rate of 6%, as the later would cost the winner $8.7M.

It was a little trying having to decide up front which to choose, with no details given about the lump option, but if it is $120M both options are close enough, to make it a toss up.

A fun topic to discuss, I loved the Captain's response!

Michael

-- posted by MichaelC_AU

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