Set for Life

Something a bit lighter for this long weekend (in VIC anyways).
Just walking the dogs past the newsagency and saw the "Set for life" advertisement and for some unknown reason my first thought was "wonder if the banks would lend to that as income".

Yes I know why do you need the banks you just won lotto but this one is a bit different, it's paid as $20,000 every month for 20 years. It's tax free and would equate to 4.8mil over that period.

We all know banks won't lend based upon a one off windfall because what's to stop you from blowing it but again this is more like income.

I know if I won set for life I wouldn't want to wait all those years to purchase property and I know I wouldn't be working either.

Thoughts?

 

Great thought!! I think I'll be interested to know that too.
But to know how banks take this there has to be an application put through.
Usually there won't be any such thing in their policy.

 

Im determined to win it so banks need to implement it into policy! Haha

I just checked and it's roughly equivalent to a gross annual salary of 400k.

It's got me thinking a little further though as well. If banks WOULD lend to this then I wonder if it would be possible to set-up some legal structure whereby if you had a lot of cash you could instead have it paid as income?

 

Is it based on the kbowledge that most people are not financially responsible to handle a lump sum?

 

You may be able to commute it to a lump sum?

Otherwise simply save the whole amount for 12 months. That would give you $240K as a deposit, and demonstrate your ability to use the money wisely.
Marg

 

The tricky part is that it's tax free. You can't use tax returns to demonstrate the income.

You could show regular deposits into a bank account over an extended period. If you get it for say 6 months and have paperwork from Lotto you'd probably be okay.

It's certainly outside of the banks regular policies, in fact probably so rare they don't have a policy. I think you'd be able to get a lender to accept it though.

 

Geez, I wish I had a lot more 'tricky' money coming my way .

 

Printing your $$ own is hard work but a rewarding career path

 

@Peter_Tersteeg even if it was taxable and you did have tax returns, what business are you operating?

 

Just buy commercial with nil requirements for personal income verification - especially if you've already got a strong income coming in monthly.

 

Apparently you get free accommodation for life, whether you're successful or unsuccessful .

 

Lease Doc.

 

Who's offering a 10 year IO fixed rate?

 

Yep. Form a DT. Every month give the DT your $20k. Use the finds to buy high yielding ETF's. At the end of the year, distribute the dividends to you. In the first year you would only earn around $ 24k. But by the end of the second year it should be around $50k. That should get you a big enough loan to buy your first IP. Within 4 years, the income from the DT should hit $100,000 per annum. At that point I would start buying a couple of LICs. After another couple of years pick up some more stable ETFs like Vanguard. Then just keep topping up what is value and reevaluate every 12 months to tweak the strategy. Reinvest all dividends.

I would be reasonably confident that this strategy could net $10 million by the end of 20 years with an annual income in excess of $600,000. Yes please!