Tag Archives: free house

The Catch With Winning A Free House

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My friend that won the house ran into one problem with her great score!  

Big time taxes

Taxes!!!

The $200,000 that my friend won in the post “My friend won a house“, had the taxman at her door wanting his fair share!  

Luckily my friend “Sis” wasn’t making as much money as she does now.  But still the capital gains on $200,000 is quite substantial.  I’m not privy to the actual tax amount she paid, but from what I read it would have been taxed as if it were regular federal income tax rate, and then the state tax rates too…  So I’m sure it turned out to be a pretty penny, but not 50% like I’ve heard in the past.  

(Check out this funny and informational post by www.bargaineering.com: “Prize Winnings Tax” ) 

So how did she pay for the winnings?  

To start, she sold the new car that was part of the prize package (it was a hyundai).  Next she sold some of the gift certificates to friends.  She used some of the money that she had in savings, but I doubt that was enough either.  I’m guessing that she probably borrowed the rest from her parents.  I do know that she was pretty stressed out coming up with the money for the taxes.  

So I started wondering what would I do in her case?  

  • First, I’d have to liquidate all of my regular stock account holdings.
  • then I’d have to take a $50,000 loan against my 401(k).
  • I would expect that should do it, but if it didn’t, then I’d also take a home equity loan against the house I just won :(.

I guess in this case, every silver lining has it cloud.  😉  

But hey, it’s still good!

My Close Friend Won A House

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A few years back, my best friend’s sister (my close friend too, let’s call her Sis) won a new house (a townhouse), car, and other prizes that added up to a tune of about $200,000.

What is her secret?

Sis (and her boyfriend) filled out 50 postcards and snail mailed them to a radio show contest.  At the radio show, 100 winners were selected (obviously, Sis was one of them), and each of those winners won $100 if they immediately called the radio show (which Sis did of course…).  A few weeks later, those winners were entered into a contest to win a “Dream Life” contest.  In this contest, the 100 winners competed for a house, and other “Dream Life” amenities.  So the prizes included a house, car, big screen tv, ticket to the theatre, etc…  to compete, the $100 winners were to show up at the prize house, choose a key from a box, and if the key opened the door to the house, the key holder won the house!

Now the story goes that the day of the “Dream Life” showdown, Sis was scheduled to leave for vacation with her family.  Half of the family went to the vacation location, but Sis, her dad and boyfriend stayed behind (at Sis’s insistence) so she could compete in that contest. 

My friend knew statistically, her chances were a bit better than 1% in winning the house.  Why a bit better?  Because there is always someone that can’t make such contests (maybe because they were going on vacation too).  1% doesn’t sound like much of a chance to win (and in normal matters it isn’t), but when compared to the chances to win via a state lottery ticket!!!  Well, it was definitely worth a shot!

Sis was the 47th person to try.  She put in the key and started to turn expecting to be a miss, but it kept turning (probably that second seemed like a lifetime), and turning, and turning… until the door opened!  She was ecstatic (I saw the pictures of her online).  I couldn’t imagine just graduating from college and winning a house!  Talk about jump starting your financial life!  As an analogy, it would be like Sis is in a race with everybody else that graduated from college, expect that everybody else starts at the start line, but Sis is allowed to start a quarter ahead of everybody else!  I’m a little jealous!

The point of this story is never give up, make your own luck by trying the best you can and going the extra distance to make it happen.  I’ll be honest, I wouldn’t have won that house if I were in her shoes.  I’m sure I wouldn’t have inconvenience my family’s vacation.  I would have skipped it thinking I probably wouldn’t win.  But if you don’t believe and try, then you definitely won’t win!!!

Always remember, you already won a big lottery just being born.  And if you are from the United States, you won another big lottery being born in a free country.

You will never know what you are capable of ,if you don’t believe in yourself and try your hardest in whatever you do!!!  I know this now!!!

And now to you readers, do you personally know someone who has won at least $100,000 dollars or other big amounts?

-D