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How to Invest $1.6 BILLION DOLLARS if you win the Powerball Lottery
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Have you ever been faced with the dilemma of what happens when you win the $1.6 Billion Dollar Jackpot, and you don’t know what you should do with all of that money? Here you go…enjoy! Snap/Insta: GPStephan
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According to math, your chances of winning the lottery are a measly 1/302,000,000. To put that in perspective, you are 4 times more likely to be hit by an asteroid, and 431 times MORE likely to get struck by lightning than win the lottery. But that can’t stop us from dreaming, right?
Now in order to understand what to do with this huge windfall, it’s first important to recognize why so many lottery winners go broke. It’s estimated that a THIRD of all lottery winners declare bankruptcy, and 70% lose all of it within just a few years. I discovered that type of person most likely to play the lottery in the first place had very little financial education and very little savings…hence, why they’re playing the lottery. It’s estimated that 40% of lottery ticket purchasers in California were unemployed.
Then, you combine that with ALL of your friends and family then asking for handouts, risky investments, extravagant purchases, and it’s easy to see how winning the lottery could become so stressful. So what can someone do to potentially AVOID these issues?
FIRST thing you should do IS TELL NO ONE.
SECOND: Get an attorney. Many lottery winners chose to set up a blind trust, within a trust, to remain as anonymous as they can when they claim their prize.
THIRD: Take the lump sum. When you look at the money invested over the long term, you’ll almost ALWAYS come out ahead after 29 years by taking the lump sum and investing it, than by getting the annuity.
FOURTH: How to invest it? Assuming you took the lump sum of $1.6 billion dollars, you should be left with $900,000,000, and $450,000,000 net after taxes. Now if this were ME, here’s how I’d distribute this:
$150,000,000 in a low-fee Total Stock Market Index Fund by Vanguard. Assuming you spend just 3% of this amount annually, that should give you about $375,000 per month in income without ever touching the principle.
$150,000,000 in a low-fee Vanguard Total Bond Market Index Fund with Vanguard. This would give you a very safe, stable investment that you can rely on. It would also give us another $375,000 PER MONTH in stable income.
$50,000,000 and spread that throughout some safe, triple-net commercial real estate in highly dense cities. Lets assume you only spent 3% of this income annually, that gives you another $125,000 PER MONTH in income.
$100,000,000 and spread that throughout some safe RESIDENTIAL real estate, mainly large apartment buildings in densely populated cities. This is another $125,000 PER MONTH in income.
$50,000,000 is the amount you now have over. I’d personally decide to keep $10,000,000 as a cash buffer, and then spend the remaining $40,000,000 on whatever you see fit. At the same time, your investments will also bring in a total of $1,000,000 PER MONTH pretty much indefinitely without ever touching the principle.
Suggested reading:
Favorite Credit Cards:
Join the private Real Estate Facebook Group:
According to math, your chances of winning the lottery are a measly 1/302,000,000. To put that in perspective, you are 4 times more likely to be hit by an asteroid, and 431 times MORE likely to get struck by lightning than win the lottery. But that can’t stop us from dreaming, right?
Now in order to understand what to do with this huge windfall, it’s first important to recognize why so many lottery winners go broke. It’s estimated that a THIRD of all lottery winners declare bankruptcy, and 70% lose all of it within just a few years. I discovered that type of person most likely to play the lottery in the first place had very little financial education and very little savings…hence, why they’re playing the lottery. It’s estimated that 40% of lottery ticket purchasers in California were unemployed.
Then, you combine that with ALL of your friends and family then asking for handouts, risky investments, extravagant purchases, and it’s easy to see how winning the lottery could become so stressful. So what can someone do to potentially AVOID these issues?
FIRST thing you should do IS TELL NO ONE.
SECOND: Get an attorney. Many lottery winners chose to set up a blind trust, within a trust, to remain as anonymous as they can when they claim their prize.
THIRD: Take the lump sum. When you look at the money invested over the long term, you’ll almost ALWAYS come out ahead after 29 years by taking the lump sum and investing it, than by getting the annuity.
FOURTH: How to invest it? Assuming you took the lump sum of $1.6 billion dollars, you should be left with $900,000,000, and $450,000,000 net after taxes. Now if this were ME, here’s how I’d distribute this:
$150,000,000 in a low-fee Total Stock Market Index Fund by Vanguard. Assuming you spend just 3% of this amount annually, that should give you about $375,000 per month in income without ever touching the principle.
$150,000,000 in a low-fee Vanguard Total Bond Market Index Fund with Vanguard. This would give you a very safe, stable investment that you can rely on. It would also give us another $375,000 PER MONTH in stable income.
$50,000,000 and spread that throughout some safe, triple-net commercial real estate in highly dense cities. Lets assume you only spent 3% of this income annually, that gives you another $125,000 PER MONTH in income.
$100,000,000 and spread that throughout some safe RESIDENTIAL real estate, mainly large apartment buildings in densely populated cities. This is another $125,000 PER MONTH in income.
$50,000,000 is the amount you now have over. I’d personally decide to keep $10,000,000 as a cash buffer, and then spend the remaining $40,000,000 on whatever you see fit. At the same time, your investments will also bring in a total of $1,000,000 PER MONTH pretty much indefinitely without ever touching the principle.
Suggested reading:
Favorite Credit Cards:
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