
Stories of Financial Windfalls - prostoalex
https://www.topic.com/financial-windfalls-15-stories-of-the-money-that-changed-everything
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Pyxl101
These were interesting but some were surprisingly low amounts of money. I was
hoping for some stories of people with 8 or 9 figure windfalls!

My thinking is that it's probably a good idea not to change your lifestyle
unless the windfall is, let's say, at least 2 if not 3 orders of magnitude
more money than you'd normally earn in a year.

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bradleyjg
Two orders of magnitude seems high. Though I suppose it depends on where in
your career you are.

But if you are anywhere close to the peak of your earnings than two orders of
magnitude (i.e. 100x) represents easily more than you can expect to earn in
the entire rest of your career. One order of magnitude (10x) is likely to
represent at least 1/4.

Why wouldn't that kind of optionality change your decisions?

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dgacmu
Some of this depends how you measure it. 10x before tax could come with pretty
hefty tax penalties compared to ordinary income - it's going to come out at
your top marginal rate, and for many of us who already max out 401K options,
you can't really shield very much of it. So it comes out to about 7x an
ordinary year. By the 4% safe withdrawal rate, you've earned enough to replace
about 28% of your normal income for the rest of your life.

That's pretty awesome, but it is not necessarily FU money.

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bradleyjg
The tax point is a good one, but I don't understand the relevance of the safe
withdrawal rate. I'd think you'd want something like an annuity that shrinks
to zero by end of life instead of being equal or larger than what you started
with.

But in the end that's neither here nor there. I'm happy to use your 28% of
normal income for the rest of your life. Why wouldn't that change your
lifestyle--whether that means working fewer hours, buying more things,
planning to retire earlier, being more charitable, whatever it is I don't see
why it wouldn't have any impact.

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dgacmu
The safe withdrawal rate is a statistically likely (inflation adjusted)
percent of your at-retirement savings that you can withdraw every year and be
at >= 0 when you die. It's a very convenient heuristic for thinking about the
effect for the large chunk of money has upon your life -- it has effectively
the same behavior as the annuity you describe.

It definitely has an impact, but if you use it to retire earlier, it would
shave about 10 years off of your projected retirement time. so the impact it
has will be some years down the road.

In my case, I had a fairly similar thing happen---about ten years of income
earned over two years---because my non-day-job income is highly variable. I
was able to endow the next 20 years of my charitable giving, support several
elections that I wanted to contribute to, and plan to retire about 10 years
earlier. Lovely impact, but it didn't substantially change my day-to-day life.
The only thing I did that I probably would not have otherwise done was to buy
a new car instead of trying to have my old one repaired one more time.)

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shhehebehdh
Fascinating how few of these people spent the money on their own financial
security. Can’t say I would make the same decision, but good for them!

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SirLJ
I spent half my money on gambling, alcohol and wild women. The other half I
wasted.

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UncleEntity
I'm kind of curious how one gets $10k at age 10 and gets to cash out $10k at
age 18?

...as I eye my bicycle which is also missing a chain guard from the Schwinn
factory but if I cared about getting a "windfall" all that much I'd have sued
the girl who bought that bike as a replacement to the one she destroyed when
she hit me with her car.

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mgleason_3
Total clickbait. Most are neither windfalls, nor did they “change everything”.

My mother recently passed away. I was just thinking I should find some stories
about what others have done for inspiration.

These are anything but inspirational. They’re just dumb.

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pfarnsworth
[deleted]

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corry
Not sure your moment of clarity deserve massive praise, but surely it doesn't
deserve downvotes. Kudos for sharing.

