Just What Would I Do with $550 Million?

What would I do with $550 million? I will never have that problem, even if I win the "$550 million" Powerball drawing at 11:00 pm EST this evening. But it's fun to think about I would do with all that money.

(1) Choose the cash option not the annuity option. The cash option is estimated at $360.2 million. To get the full $550 million I would have to take it in annual installment payments over 30 years. The first installment would only be around $9,806,555 (before taxes) and grows each year to a final payment in 30 years of around $30,583,225. In the meantime, the state sits on my money, forget that.

(2) Pay the income taxes. I don't want to end up in jail like Survivor winner Richard Hatch who failed to report his $1 million in winnings. Assuming I have to pay a combined federal/state rate of 38.45%, that would chop off $138,478,890 and leave me with $221,721,110. That sucks but I knew that going in.

By the way, if I don't get the check until next year, I would potentially get hit with an extra $29,378,632 in federal taxes at the higher 46.6% rate that may apply. The fiscal cliff just stopped being funny.

And, if I took the annuity option, the total taxes over 30 years adds up to $256,306,600, an additional $88,449,078, so it's not like I'd really be getting the full $550 million that way either.

(3) Set aside $20 million or so for charity, by creating a private foundation or donor-advised fund. That will save me $7 million in taxes up front and let me dole out $1 million a year to worthy causes.

(4) Get a thousand $100 bills I can pass out for a couple of days like Rockefeller used to hand out dimes, and a couple hundred $1,000 bills for close friends and family. OK, they took the $1,000 bill out of circulation so maybe it will have to be gold coins for the friends and family.

(5) Move to Oregon, which has no sales tax, the government already took its cut. Portlandia, here I come. If I am going to spend this money, I want to do it from a nice condo in the Pearl District. Nothing too fancy, $1 million should do it.

(6) Put $3 million into farmland, perhaps a few hundred acres in Yamhill County, something I can tell all my Cambridge friends is a winery and all my Iowa friends is a ranch. Then, because grapes and cattle are too much work, I'll find some lazy farmer to seed it down and cut it for hay a few times a year.

(7) Buy a Ford Escape Hybrid SUV, $32,320 MRP, 31-34 mpg and no bailout.

(8) Buy a new laptop, $2,000 should cover a 13 inch MacBook Air with retina display and a few accessories.

(9) Buy a case of Dark Chocolate M&Ms. I can't find them anywhere but on the internet. It looks like I could get a gross of 12.6 ounce packages from Amazon.com for $469.20.

(10) That would leave me with $175 million, which if I invested in the stock market would give off about $3.5 million in dividends each year. The tax man's cut could be as much as $1.6 million, leaving me with $1.9 million a year. I could live on that.

I bought 2 QuickPicks for $4 earlier this evening. I don't consider it gambling because I know I'm almost certainly going to lose. It's a $4 entertainment, more than 2 trips to RedBox, less than going to a movie.