John Marks <marks[at]aol.com> wrote:
- quote -

Gambler's Anonymous
A good psychiatrist
A good financial planner
A good lawyer

I'm being utterly serious.

Its not rare for a big lottery winner to be utterly broke after winning
the lottery.

Plenty of horror stories for your browsing:
http://www.lotterypost.com/news-100530.htm
http://www.greenwichtime.com/busines...,7484235.story

70% of those who win the lottery (much larger amounts then $300k) are
broke within a few years.

Perhaps your friend is part of the 30%. Perhaps not. $300k isn't much,
but depending on the extended family, its probably enough to bring
shirttail relatives and any past ex-whatevers out of the woodwork (thus the
psychiatrist and lawyer).

If your friend has any sort of a gambling problem, or has the warning
signs of a problem gambler, the GA's is a good idea.

No offense intended by the above post.

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"John Marks" <marks[at]aol.com> wrote in message
news:Xns95A1E168065D9marksaolcom[at]216.196.97.131...
- quote -

First - pay off ALL debt. The only good debt is no debt.

Second - open a savings account for emergencies - I recommend an ING Direct,
it pays about 2% - and put aside 3 months of living expenses, calculated
AFTER the debt payoff.

Third - visit with an Independent Financial Advisor and get an education
about investments. This should include (IMO) a discussion of Variable
Annuities that offer income guarantees.

Fourth - Invest the balance of the lottery winnings. In 15 years with the
right VA he could have at least $370K and could likely have closer to double
that amount.

Fifth - Put the savings from no debt payments into emergency savings until
he has 6 months of living expenses set aside.

Sixth - now, start investing the old loan payments. If he invested these
into the same VA as item#4 he could have between $600K and $1M in 15 years.
(as a point of reference, if the investment hits the $1M mark, he could
retire at age 57 and draw about $6,500 per month until he reaches age 90)

Seventh - Make NO major upgrades in their current lifestyle. Winning the
lottery had given your friend an opportunity to jump out ahead of most
people. He should be very, very careful about spending it away.

Good luck,
Gene E. Utterback, EA

John Marks <marks[at]aol.com> wrote:

- quote -

Pay off all the debt, especially the credit card debt. If any of the
autos are excessively old or in a poor state of repair, replace them
for reasons of safety.

Tell your friend to quit playing the lottery, it's just a tax on
stupidity.

--
Ron

In article <Xns95A1E168065D9marksaolcom[at]216.196.97.131> , John Marks
<marks[at]aol.com> wrote:

- quote -

I would put the money in a money market account or short term CD's
and just let it sit for a few months. A major change like this
requires some time for adjustment and to think through how it will
change the future. I wouldn't suggest anything rash, and to not
make any commitments or major purchases for at least a few months.

The only thing I would consider is paying off the house. This really
isn't spending the money since you could borrow it back if needed,
and they will get it back when they sell the house. The 6.5% is
a pretty good garanteed rate of return (ignoring the tax issues).

A good accountant and financial planner might be able to find
something to do with this money to minimize taxes. That would be
a good place to start for future planning. But again, even if it
saves some money now, I'd still not do anything rash without having
a few months to ponder it over and figure out how the future will
change with this new money.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

Hey

A friend of mine won a lottery of $300,000 after taxes. He wishes to invest
this, but does not know the best way to go. Some background for you. He is
42, married with one child. Both of them work and make about $45,000 a
year. 2 year Morgage on a home at I think 6.5% rate. He owes about $130,000
with the home included at a average rate of 9.5%.

What kind of thoughts would you have here?

Jm