> “I’m getting the shaft, on top of the shaft,” said John Wyllie, 60, from Bellingham, Wash., who won $5,000 a week for life from Publishers Clearing House in 2012.
> Mr. Wyllie had been receiving an annual check for $260,000 every January, money that allowed him to retire and buy a home on six acres. But this year, the checks stopped. A few months later, he learned why: Publishers Clearing House had filed for bankruptcy protection without warning.
> Mr. Wyllie, who had not worked in more than a decade, said he had recently found a part-time job, but added, “I won’t make enough money to even pay the mortgage.”
Wow this guy has been getting $260k every year and still hasn't paid off his mortgage. I guess the spending habits of some people expands when they get more money.
Wow this guy has been getting $260k every year and still hasn't paid off his mortgage. I guess the spending habits of some people expands when they get more money.
Depending on your mortgage rate and how long you've held it, paying it off might be a really terrible financial decision.
Only if you’re wealthy. At $260k/yr, you’re barely middle class; better to owning your primary vehicle and residence as soon as you have enough saved to pay their annual taxes for a couple decades, unless you have at least $2.6mil of (semi-liquid, non-volatile) cash savings / money market / index fund investments accrued (so, not real estate or angel investing). Whatever amount of profit you lose on interest skimming isn’t worth the fragility of risking your home because you have a payment due and who knows what went wrong upstream, especially if you don’t/can’t review the annual financials of your annuity payer to see that they’re almost out of runway.
There is nowhere in America where $260k/year is “barely middle class.” 260k/yr is a top 10% income nationally. Calling it anything other than upper class is ludicrous, especially since the payment requires no geographic tie like a salaried job would.
$260k is absolutely middle class, nowhere near "upper class", by any reasonable consideration of lifestyle, freedom, power or day to day experience.
The median home price in SF is $1.3. Using the calculator at zillow (https://www.zillow.com/homeloans/buyability/) with an income of $260k, looking to buy a $1.3MM house, you'd need a down payment of over $300k.
So suppose you get your $260k payout and want to live in SF... you have to rent for what... 5 or 10 years to save up the $300k down payment (while living modestly to save tens of thousands per year). Then finally you can buy your average home, watch half your income disappear to taxes and another third to mortgage, and then you'll still have enough to live a comfortable, middle-class life.
You're not buying yachts, getting meetings with senators or buying your kids into elite schools. You're not flying private, hiring personal assistants or buying a vacation home in Aspen. You're not making dozens of angel investments or being courted as a limited partner by VCs or PE funds.
"Upper class" probably starts at around $10-15 million in liquid assets, to be able to really have the freedom, flexibility and power to live a life that's distinct from middle class existence. If you can't give your son a "small loan of $1 million" to start his business (and be able to shrug off a complete loss as a learning experience) then you're not upper class.
I mean, that sucks for past winners, but it’s a private company. When a company is acquired out of bankruptcy, it’s usually an asset purchase on a debt-free, liability-free basis. That gives the new owners some hope of saving the company.
If you ever win a large sum of money and are given the option to take less now or more over time, take less now.
Perhaps instead we can just rely on the plain meaning of common language around "lifetime" income streams and sweepstakes companies that offer those kinds of prizes should be required to purchase an annuity to guarantee that payment.
Relevant: “Federal court filings and interviews suggest the company once shielded prize winners from financial risk by purchasing prepaid annuities through banks or insurance companies. That practice ended sometime after 2003, said Darrell Lester, a retired Publishers Clearing House senior executive and author of a book about the company.”
Agreed, feels like the company should have been and should be now required to purchase an annuity or other similar product that protects the winners.
I wonder what happened in 2003. Probably the company’s fortunes were already faltering.
Also the business was probably becoming obsolete at that point. The internet brought easier access to magazine content, magazine subscriptions signups, and sweepstakes. I remember there being a pretty big sweepstakes forum community at that point.
It also seems like the most lucrative customers may have been using the sweepstakes as a form of gambling, and gambling options have just steadily expanded for decades.
“lifetime” and “unlimited” in any marketing copy should automatically convey legally binding contract language that dominates any explicit language to the contrary and carry forward to successors. Unless they actually mean “lifetime” and “unlimited”, companies should treat those words as radioactive.
I always found it funny when a "lifetime warranty" was retroactively defined to be the lifetime of the product in question. So the warranty expires when the company decides it should expire.
https://archive.ph/LUDsR
> “I’m getting the shaft, on top of the shaft,” said John Wyllie, 60, from Bellingham, Wash., who won $5,000 a week for life from Publishers Clearing House in 2012.
> Mr. Wyllie had been receiving an annual check for $260,000 every January, money that allowed him to retire and buy a home on six acres. But this year, the checks stopped. A few months later, he learned why: Publishers Clearing House had filed for bankruptcy protection without warning.
> Mr. Wyllie, who had not worked in more than a decade, said he had recently found a part-time job, but added, “I won’t make enough money to even pay the mortgage.”
Wow this guy has been getting $260k every year and still hasn't paid off his mortgage. I guess the spending habits of some people expands when they get more money.
Wow this guy has been getting $260k every year and still hasn't paid off his mortgage. I guess the spending habits of some people expands when they get more money.
Depending on your mortgage rate and how long you've held it, paying it off might be a really terrible financial decision.
Only if you’re wealthy. At $260k/yr, you’re barely middle class; better to owning your primary vehicle and residence as soon as you have enough saved to pay their annual taxes for a couple decades, unless you have at least $2.6mil of (semi-liquid, non-volatile) cash savings / money market / index fund investments accrued (so, not real estate or angel investing). Whatever amount of profit you lose on interest skimming isn’t worth the fragility of risking your home because you have a payment due and who knows what went wrong upstream, especially if you don’t/can’t review the annual financials of your annuity payer to see that they’re almost out of runway.
There is nowhere in America where $260k/year is “barely middle class.” 260k/yr is a top 10% income nationally. Calling it anything other than upper class is ludicrous, especially since the payment requires no geographic tie like a salaried job would.
$260k is absolutely middle class, nowhere near "upper class", by any reasonable consideration of lifestyle, freedom, power or day to day experience.
The median home price in SF is $1.3. Using the calculator at zillow (https://www.zillow.com/homeloans/buyability/) with an income of $260k, looking to buy a $1.3MM house, you'd need a down payment of over $300k.
So suppose you get your $260k payout and want to live in SF... you have to rent for what... 5 or 10 years to save up the $300k down payment (while living modestly to save tens of thousands per year). Then finally you can buy your average home, watch half your income disappear to taxes and another third to mortgage, and then you'll still have enough to live a comfortable, middle-class life.
You're not buying yachts, getting meetings with senators or buying your kids into elite schools. You're not flying private, hiring personal assistants or buying a vacation home in Aspen. You're not making dozens of angel investments or being courted as a limited partner by VCs or PE funds.
"Upper class" probably starts at around $10-15 million in liquid assets, to be able to really have the freedom, flexibility and power to live a life that's distinct from middle class existence. If you can't give your son a "small loan of $1 million" to start his business (and be able to shrug off a complete loss as a learning experience) then you're not upper class.
More terrible than spending it all? (Because he clearly didn't invest it at better rates, or he wouldn't be scrambling now for income to pay it)
I mean, that sucks for past winners, but it’s a private company. When a company is acquired out of bankruptcy, it’s usually an asset purchase on a debt-free, liability-free basis. That gives the new owners some hope of saving the company.
If you ever win a large sum of money and are given the option to take less now or more over time, take less now.
Perhaps instead we can just rely on the plain meaning of common language around "lifetime" income streams and sweepstakes companies that offer those kinds of prizes should be required to purchase an annuity to guarantee that payment.
Relevant: “Federal court filings and interviews suggest the company once shielded prize winners from financial risk by purchasing prepaid annuities through banks or insurance companies. That practice ended sometime after 2003, said Darrell Lester, a retired Publishers Clearing House senior executive and author of a book about the company.”
Agreed, feels like the company should have been and should be now required to purchase an annuity or other similar product that protects the winners.
I wonder what happened in 2003. Probably the company’s fortunes were already faltering.
Wikipedia mentions heightened regulation and litigation around 2000, along with layoffs. https://en.m.wikipedia.org/wiki/Publishers_Clearing_House
Also the business was probably becoming obsolete at that point. The internet brought easier access to magazine content, magazine subscriptions signups, and sweepstakes. I remember there being a pretty big sweepstakes forum community at that point.
It also seems like the most lucrative customers may have been using the sweepstakes as a form of gambling, and gambling options have just steadily expanded for decades.
“lifetime” and “unlimited” in any marketing copy should automatically convey legally binding contract language that dominates any explicit language to the contrary and carry forward to successors. Unless they actually mean “lifetime” and “unlimited”, companies should treat those words as radioactive.
Better yet, just prohibit both terms. They never actually mean what they say.
I always found it funny when a "lifetime warranty" was retroactively defined to be the lifetime of the product in question. So the warranty expires when the company decides it should expire.
Exactly. There's already a rule against perpetual terms in contract law, but for some reason it doesn't apply to advertising.
The "lifetime" is of the company as a going concern.