What Would You Do With $8.5 Million If You Won The WSOP?
Imagine winning the World Series Of Poker (WSOP). I imagine winning the WSOP once a year and being a big baller. But then, I snap out of it. 37 Comments / By Financial Samurai / 02/19/2020
* $100,000: Fly 10 of my closest friends down to Vegas and we’d all stay at the penthouse suite at either The Palms or The Encore for a week long party. We’ll eat at the finest restaurants and have bottle service every night at the clubs. Hopefully, we’ll have such a good time we won’t remember a thing!
* $150,000: Remodel my parents house by installing new double paned windows, remodel their master bathroom and guest bathroom, and update the kitchen with new appliances. I’d also get them a killer home theater system for $10,000 since they still have a tube TV with no cable.
* $50,000: During the 2 month remodeling process, my parents will cruise the world in a penthouse suite on one of the great luxury liners.
* $80,000: My parents have a beat up 1991 Camry that makes funny noises every time it goes. A new Lexus LS450 would do, although they’d probably be just as happy with a $28,000 Honda Accord since they’re so low key.
* $50,000: Host a week long family gathering at Auberge du Soleil in Napa during crush month (September). There’s something eating grapes picked right off the vine.
* $50,000: Travel for a month with the wife to Amsterdam, Prague, Athens, Rome, and the south of France. This trip will be next year, since we just had a great time partying it up in Vegas!
* $20,000: Keep cash in a safe somewhere at home and practice “making it rain”!
* $0: Pay off no debt. What you say? It’s all accounting really. When you have more cash than debt, why would you ever tie it up in a house? Debt helps keep me motivated to work and secure my financial future. Without any debt at my age, I’m afraid I’ll turn into a slacker!
* $125,000: Donate to a local organization such as The Omega Boys Club which helps educate inner city kids and keeps them off the streets.
* $3,600,000: Buy a stable value fund with a 4% yield and collect $150,000/yr in gross interest income.
CONCLUSION – WSOP Dreaming
With $3.6 million in the bank, I still won’t quit my job. In fact, I think I’ll enjoy my job more because of the new found financial security. Spending 15% of the winnings and saving the other 85% sounds like a good balance.
Who knows, I may end up giving it all away. But for now, it’s best to lock the remaining money up to avoid temptation, and let reality sink in before spending any more. Besides, $150,000/yr in interest income is good enough, for now!
Readers, what would you do if you won $8.5 million dollars?!
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Financial Samurai – “Slicing Through Money’s Mysteries”
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TweetSharePinFlipShare27. 
I am thinking of taking some time off and not sure if I can get back on the ladder where I get off so therefore I’m being more frugal I guess.
-Mike
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Financial Samurai12/12/2010 at 7:52 amI honestly believe we will die with too much. We need to take more vacations and spend more money, b/c as you’ve seen, making money is pretty easy. Time to live it up during your break!
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One more thing- you are burning through too much of the windfall in your post. I’d say allocate only 1% of the windfall to something fun. We sold out our company and I got paid $500k a few months back for this, the allocation for fun money is spending $6k on a trip to the Maldives next spring.
-Mike
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I guess the instinct is to blow the money because it came so fast, there is not the feeling of the pain of having earned it.
That being said $8.5 million before taxes is about double the average lifetime earning potential of a professional (like a doctor or lawyer), or 4 times the average lifetime earnings of a person with Master’s degree.
Too bad the tax burden is so high at 50%, what a waste.
If you are in your 30’s you would still need to live frugally to make $4.5 million last without the chance of running out of money. By spending like Obama in your post, you are much more certain to run out of runway!
-Mike
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Jared10/28/2010 at 3:06 amIf I won. I would live a semi retired life, travel and volunteer.
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RT10/27/2010 at 3:59 amI would get cable tv
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Crasty11/28/2009 at 8:01 amAre you a professional journalist? You write very well.
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David11/14/2009 at 6:55 pm$4.25MM?
* Tithe 10% which leaves $3.825MM. * Buy a small, profitable corporation for between $1MM and $1.9MM (50% of the remainder). * Make sure as much of your property as possible actually belongs to the corporation. * Create an estate and set up trusts for your children. Put the rest of property and money into the estate and trusts. * Let the estate and the corporation do the investing, live off the interest, and draw a modest salary from the corporation. Make sure the trusts will cover your children’s college tuition. * When you travel write it off as a business expense. * Make your car a company car. * Own nothing (or as little as possible) and live like a king. That’s my plan! Thanks for the great article!
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XtraCrispy11/14/2009 at 8:56 amYeah…I read your post and laughed…than cried. :( I don’t know if I could sell some of the cars you have driven haha. I have also read your 1/10th rule and sadly…I have broken that rule when I bought my current car. 03 Mazda Speed Protege…fairly simple, turbo,fmic, 18″ rims, Tein coilovers, etc…you know how it is. Still paying off the car and that’s fine, don’t plan on getting rid of it anytime soon. (bought it used from someone in 08 who only had 7800 miles on it!)
Not sure if you remember any of my other comments, one regarding the dream of making 100k that you wrote about. I’m 24 at the moment, and my income is about twice my age currently. To speak of these beautiful cars that we have mentioned, and I agree the new 335 coupe with it’s sexy TwinTurbo package is to drool for, but becoming way to common. All of the cars we have mentioned come with the appropriate price tag. A price…that unless I work extremely hard, get my certs, higher education, and try to go work for the NSA ;) or win the lottery or hone my poker skillz (I play a little)…the price will remain out of reach to that rule for quite some time.
I understand one has to be patient. Earn what they want. I’m sure you can agree with me that the passion we share is an expensive one…and one probably most enjoyed at a younger age when my reaction time is at it’s peak. I don’t want to be one of those guys who is retired, worked all his life, is now 70is…and is coming out of the local grocery store and hoping in his brand spanking new Mustang GT500. Yes…I saw this, as his car was parked to mine and I was getting ready to leave. No offense to him in the least…he worked hard or long, and earned it…but it took him almost 15 minutes to walk from the store to the car! I don’t want a car with that kind of power at that age! :)
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The 1/10th rule is simply a motivational rule for me. When I want that $45,000 bimmer, I try and think of every single way possible to try and make $450,000. It’s a damn scary goal, but a goal I focus on whenever thoughts of spending that kinda money on a car comes to mind!
Nice story on the old man who took 15 minutes to walk to the store from his Mustang GT500! Ahh… I remember back in 1995, there was a sweeeet GT500 I wanted to buy for $10,000… the gurlge of the engine. Too bad I only had $30 bucks to my name! :) FS
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I agree with you…the lambo is a sweet choice as well and I think I would go with the dark grey. To that list…I think I would add a Aston Martin DBS with the color cold Casino Royale! :) and while we are at it, Saleen S7 (of course…only the TT model though). Yeah…I can see me merging onto the highway in first gear which peaks out at 63mph!!!
Cars are my sickness…
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I really like the twin-turbo BMW 335i Coupe from 2007 and beyond. Simple, elegant, fast. There are a lot of people though driving it, so not as original.
Just remember, 1/10th rule! Spend no more than 1/10th your annual gross salary on your car! ;)
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Basics would be invest a large portion. Put the rest in CD’s and use the interested earned every month as income and leave the investment portion alone. Buy a house, pay off my debt, continue working, maybe take a break from work and go to school full time, or do work and school….
But what would be in my garage…a beautiful 2004 E46 BMW M3, black leather interior, 6 speed, sitting on 19″ BBS rims in the back, 18″ in the front, wrapped in Pirelli’s, beautiful Alpine system from head to toe, full built and tweaked Stage 3 HorsepowerFreaks Turbo kit (stage 4 is way to much power on the street in my opinion), and a custom House of colors candy apple red paint job.
Drool…… yes! That would be the dream.
Now back to reality ;)
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Susan11/13/2009 at 1:23 amAhhhhhh it’s so good to dream my own dream when I read your list…
But what? A 21 years old won? Oh no, it’s going to ruin his/her life. I haven’t found a 21-year-old knowing how to handle 8.5 million dollars yet.
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The Genius11/12/2009 at 9:44 amI’d be more aggressive. I’d lock $1million in a 5 yr CD that is truly locked and unable to be accessed, and invest the remaining $2.25 million in various stocks and private equity to hopefully turn it to $10 million!
Hey, even if I lose it all, I still have $1 million that I never would have had in the first place!
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kosmo @ The Casual Observer11/11/2009 at 8:35 pm@admin Lol. Should have clarified. We have a 98 Contour and a 06 Taurus. We’d upgrade the Contour and keep the Taurus as-is.
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ctreit11/11/2009 at 9:26 amDon’t know what I would do with so much windfall income. I will cross the bridge when I get there. Maybe I should learn how to play poker in the meantime….
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kenyantykoon11/11/2009 at 1:56 ami would invest 97% of all that cash into my businesses and my portfolio. the other 3%, i would do or buy something that i have always wanted and hadn’t planned for like a plasma screen or a macbook or an impromptu vacation in the Masai Mara :)
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1) Quit my job 2) Move to a slightly larger house. Baby on the way makes 4, and we could use another bedroom and a bit more storage. 3) Replace the 98 Contour (110K miles) with something newer. ’06 Taurus is fine. 4) Travel. I’d hit a bunch of national parks. 5) Work on my novel. While I’d want to keep my brains cells working, I’d trade my job for novel writing in a heart beat.
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Charlie11/10/2009 at 9:33 pm“Keep cash in a safe somewhere at home and practice “making it rain”!” that’s so funny. haha I’d probably travel the world for a year and take thousands of photographs. It’s interesting though – I’ve heard so many stories of people that win the lottery and end up unhappier with more problems over time. I’m sure it’s crazy awesome in the beginning but public onset of wealth must really change relationships and appreciation of the simple things in life (all of a sudden everybody wants to be your friend and wants something for free with nothing in return etc)
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MLR11/10/2009 at 6:05 pmYou have me salivating. That sounds like a lot of fun.
I would probably wind up spending less on the Vegas stuff and doing something more like the above commenter who mentioned a travel fund.
THAT would be amazing… awesome vacations every year for the rest of my life!
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Evan11/10/2009 at 11:25 am@admin
Well are we talking black/white legal here OR are we talking ‘come on’ its not getting picked up by an audit LOL.
If you bought a home, and your parents lived in it then your gift would be the rent you are forgoing IF you got audited. If that fair rent is under $26,000/yr you’d be or even if fair rent was $52,000 (your 13 to both parents and your wife’s 13 to each parent).
After you hit your max on gifting, you start to eat it into what is known as your Lifetime exemption amount. Easiest way to explain this: Everyone has heard of the $3,500,000 you get to give at death…well, the gov’t lets you slice off $1,000,000 during lifetime. So now you have that $1mil PLUS THE GROWTH out of your estate.
After all that you start with the 45% gift tax OWED BY THE DONOR.
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2) I wouldn’t put it in a stable fund, I would buy Munis upon Munis – and live off the money like FS but make it tax free
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It’s a good point you bring up. So, that’s why I’m spending money on things for my parents. May I ask though, do you know if I just buy a 50k car for my parents, it’s not considered a gift if I just keep it under my name? What are the official rules here to avoid double taxation!
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John DeFlumeri Jr11/10/2009 at 9:21 amProvide for my family members, travel, and relax.
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Craig11/10/2009 at 8:57 amI used to play games like this in class in college when really bored. I would first set enough money aside for savings, retirement, potential family so I don’t have to worry about any of that. Then I would treat family and friends to some celebration, put plenty of money aside for traveling and then invest in a business or two, possibly real estate. And help out with some charity.
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FB @ FabulouslyBroke.com11/10/2009 at 8:29 amDROOL!!!!
If I won 4.25 million (I count everything net after taxes) I’d probably do this:
Throw 3 million into a stable fund with a low yield and grab the money in interest income.
Spend the other $1.25 million: – Giving each of my immediate family members $100,000 each to do with what they’d like (So that’s $600,000 total)
– Take the other $500,000 and put it in my “travel” fund, and take fun trips with BF to different countries each year on the cheap.
We spend about $1000/U.S. city for one week each, so $2000 total for the both of us.
And about $5000 each international trip, visiting 4 countries, so $10,000 total for both of us.
– $125,000 — I dunno. I guess I’d buy a nice leather jacket, a trench coat, and that baby grand digital piano I want (Roland RD700). And the rest.. er.. I’d keep it until I think of other things I might need.
I wouldn’t do much, eh? I don’t need anything, nor do I want anything so desperate that I’d spend cash on it right now.
No need for a car, I don’t want a home (maybe a condo..) and.. that’s about it.
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Hence, the only way around it is to just buy your loved ones what you think they need or would want to buy!
FS
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