What to do With USD1.5 billion?

[tomcat]

Powerball Math: Winner Faces Inflation Dilemma on $1.5 Billion Payout

The lottery jackpot has swelled to near a record high with the next drawing set for Saturday. Here’s what to consider if you win.



The next Powerball draw will be held on Nov. 5.
By Mackenzie Hawkins (Bloomberg)

November 3, 2022 at 11:45 PM GMT+7Updated on November 4, 2022 at 1:07 AM GMT+7

The Powerball jackpot swelled to an estimated $1.5 billion after no winner was declared in Wednesday’s drawing, nearing a record payout.
As Americans flock to buy tickets for the next drawing on Saturday, it’s a good idea to think about how you would manage that much cash in the extremely unlikely chance — about one in 292 million — that you win. It’s no small task, and inflation, interest rate hikes and a looming recession make it that much harder.

The lucky winner will have to choose between 30 annual payments that grow 5% each year and average $31.54 million after federal taxes, or an immediate cash payout of $745.9 million, which would drop to roughly $470 million after federal taxes. There’s argument for each strategy. But in the current high-inflation environment, financial advisors say a lump sum is the way to go.

“If you think about it, the annuity payment option is like buying a 30-year bond, and 30-year bonds have a lot of inflation risk,” said Noah Damsky, a principal at Marina Wealth Advisors in Los Angeles. “That's a really concentrated risk to take when you have half a billion dollars after tax potentially coming your way.”

Lottery winners — like all investors — should pursue a diverse portfolio that includes fixed income, equities and alternative investments, Damsky said. The exact composition of that portfolio is “really a function of the person’s risk tolerance and their time horizon,” said Marguerita Cheng, chief executive officer of Blue Ocean Global Wealth in Maryland, adding that a lottery windfall is a great opportunity for impact investing as well as charitable or philanthropic giving.
Heavy Taxes

Right now, 5% growth in annual lottery payments falls far short of September’s 8.2% inflation headline. Still, opting to receive annual payments through 2051 would give the winner a much higher net payout, before any investment returns — and 30 times to try their hand at the market, preventing their winnings from evaporating after any one bad decision. On the other hand, taking a lump sum means a chance to build a diversified investment portfolio with greater returns each year than the standard 5% annual bump.

Either way, the windfall is heavily taxed: The federal government takes 37% — because the winner would move into the highest income tax bracket — and state and local rates vary, from no lottery taxation at all in some states, like California, Florida and Texas, to 10.9% in New York, with an additional 3.9% tacked on for New York City residents.

“I think the bigger question is, do you want to pay all the taxes up front or each year?” wrote Eric Kazatsky, senior US municipals strategist at Bloomberg Intelligence, of the decision between a lump sum or annuity. “At these rates I would want to pay the taxes up front and lock in long-term exempt rates.”

That would mean opting for the immediate cash payout and then investing it in a tax-exempt security like municipal bonds. This year’s economic headwinds have boosted 30-year yields on AAA-rated bonds to 4.08% — and for in-state buyers, none of the interest earned on the bonds is taxed at the federal or state levels.

Theoretically, investing the $745.9 million cash payout for 30 years at a 4.08% rate would bring your earnings to an estimated $1.66 billion. Even at $470 million, the return would make the winner a billionaire.

[S Landreth]

Picking up her ticket today after cashing in on her 26 Powerball draws from the last time we visited the states.

She told me if she ever did win a large amount, she would keep it a secret.

Edit: because she’s a foreigner, as I understand she'll pay a little more in taxes

[tomcat]

...secrecy would be paramount for me: I don't want to be bothered by relatives, pseudo-relatives, friends bearing congratulations and donation suggestions, charities real and fake, persistent thieves of every stripe and offers for the best sex I've ever had...rather, I'd donate USD100 million to a favorite university's endowment, USD100 million for scholarships at that university and USD100 million for academic staff research...along with a written promise that the institution must never contact me again seeking funds.

[S Landreth]

I'd donate USD100 million to a favorite university's endowment, USD100 million for scholarships at that university and USD100 million for academic staff research

Whatshername told me she would start a foundation and send less fortunate Thai kids to college who otherwise couldn’t attend without the help

[david44]

I'm dreaming of a white turnip

[Stumpy]

I dunno what I would do. My youngest daughter and I play. As I told her, it's a long shot, but you can't win if you don't play.

We agreed we would definitely take the one time pay out. Forget payments. It's a staggering amount of money but fun to think what you might do with it if you won.

[aging one]

I dunno what I would do. My youngest daughter and I play. As I told her, it's a long shot, but you can't win if you don't play.

We agreed we would definitely take the one time pay out. Forget payments. It's a staggering amount of money but fun to think what you might do with it if you won.

When we were last home there was a big powerball payout as well. The wife got caught up in it and had fun. Nothing near big, but did hit a $500 dollar payout that just about covered what she "invested". I told her about this and both kids were called to buy $100 in tickets each. Then because I have the US account, which I have to close soon as I dont have a stateside address had me transfer the money back to them. So I am all in!!!

[Stumpy]

So I am all in!!!

Good Luck AO. I still have an active US bank acct that both my daughters have ATM card to. My youngest pulled out $50. She is in for $50.

[bsnub]

but fun to think what you might do with it if you won.

I think this is why I buy these tickets. I only play them when the jackpots get like up over $300 mil. Not only that, but I do not go overboard on buying them $5 or $10 a pop is good.

[S Landreth]

Just one Powerball ticket

[panama hat]

^ How do you expect to win with that!!!!! You need numbers, SL!!! Sheesh . . .

[S Landreth]

Powerball Jackpot grows to record $1.9 billion as no tickets matched all winning numbers Saturday

The Powerball jackpot has now grown to an estimated $1.9 billion after no winning tickets were sold in Saturday night’s drawing, according to the California Lottery Association.

[S Landreth]

Here’s why Powerball numbers weren’t drawn Monday night

If you were patiently waiting for Monday night’s Powerball numbers to be drawn, you’ll have to wait a little while longer.

A technical error has caused a delay in Monday’s numbers being drawn, a games spokesperson said during the scheduled drawing at 10:59 p.m. ET.

Additional details have not yet been made available.

According to the California Lottery, Monday’s drawing has been delayed “due to participating lottery needing extra time to complete the required security protocols.”

“Powerball has strict security requirements that must be met by all 48 lotteries before a drawing can occur,” the California Lottery wrote on Twitter. “When the required security protocols are complete, the drawing will be performed under the supervision of lottery security officials and independent auditors.”

In a tweet shortly after 12:30 AM ET, the California Lottery explained an issue in another state is causing the delay. They added that “there is currently no estimated time for the drawing.”

Powerball’s website does note that results are pending. Results will be posted on the game’s website and Powerball’s YouTube channel when numbers have been drawn.

It’s unclear how long the issue will take to resolve.

[happynz]

I have a ticket for New Zealand's NZ$12 million Powerball jackpot. Not as spectacular as the US behemoth, but a winning ticket would suit me right down to the ground.

[S Landreth]

^Results of large lotteries are exciting to watch for. Interesting to see or read what winners will do with their new wealth.

I supported the Florida lottery when it first came out. To sell it to the public Florida said the money that was made would go to schools/public education. Nothing wrong with that.

However, it turns out that yes the money is going to public schools,.......BUT now in Florida’s yearly budget almost nothing to set aside for public education. They’re using the Lottery money.

It should be State funds plus Lottery money going to public education.

[prawnograph]

I have a ticket for New Zealand's NZ$12 million Powerball jackpot. Not as spectacular as the US behemoth, but a winning ticket would suit me right down to the ground.

Brother in Auckland buys my online tickets for me 10 draws at a time. A matter of trust ... He (not me) won $700 on Saturday a welcome bonus for a grizzly pensioner.

[panama hat]

I have a ticket for New Zealand's NZ$12 million Powerball jackpot. Not as spectacular as the US behemoth, but a winning ticket would suit me right down to the ground.

Sorry mate, I have four lines on that so you'll have to win next time

[S Landreth]

One person got very lucky

One winning ticket for $2B jackpot sold in California

There's one winning ticket for the $2B Powerball jackpot!

That lucky ticket sold at Joe's Service Center in Altadena, California, lottery officials confirmed on Tuesday.

The winner matched all six numbers drawn in the delayed Monday, Nov. 7 drawing - white balls 10, 33, 41, 47, 56 and red Powerball 10. The Power Play multiplier was 2X.

Due to a technical issue, the Powerball drawing was delayed Monday night and performed at 8:57 a.m. EST on Tuesday at the Florida Lottery draw studio in Tallahassee.

The win comes on the 41st draw of the jackpot run. Final ticket sales pushed the jackpot beyond its earlier estimate to $2.04 billion at the time of the drawing, making it the world's largest lottery prize ever won.

The winner will have the choice between an annuitized prize of $2.04 billion or a lump sum payment of $997.6 million. Both prize options are before taxes. If the winner selects the annuity option, they will receive one immediate payment followed by 29 annual payments that increase by 5% each year.

[S Landreth]

Record-setting $2.04 billion Powerball jackpot winner in California finally identified

After months of anticipation, the winner of November’s historic $2.04 billion Powerball jackpot was identified Tuesday as Edwin Castro.

Castro did not attend a news conference at California Lottery headquarters in Sacramento. Aside from his name, no other information was released. However, lotto officials confirmed that Castro opted to receive the lump sum payment option of $997.6 million.

Lottery officials also read a statement on his behalf:

“As much as I am shocked and ecstatic to have won the Powerball drawing, the real winner is the California public school system,” Castro’s statement said. “The mission of the California Lottery, which is to provide supplemental funding for California public education … makes this a huge win for the state. As someone who received the rewards of being educated in the California public education system, it’s gratifying to hear that, as a result of my win, the California school system greatly benefits as well. “

Castro declined lotto officials’ invitation to appear publicly.

California public schools indeed reaped the benefits of November’s jackpot, generating a record-breaking $156 million, officials said. As a result, the California Lottery raised $2 billion in just one fiscal year.

“Clearly Edwin Castro shares in our love for California’s schools on this Valentine’s Day, couldn’t be more fitting,” California Lotto spokeswoman Carolyn Becker said.

In November, the Powerball jackpot reached the record-setting amount after 41 consecutive drawings without a jackpot winner.

The winning ticket was purchased at Joe’s Service Center in Altadena. The store’s owner, Joe Chahayed, received a $1 million prize for selling the ticket, lottery officials said.

In an interview Tuesday, Chahayed said the money is going in part to his grandson’s college fund. He also believes Castro may be a local resident.

[dirk diggler]

I'd probably upgrade my iPhone X first.

Maybe fix the cracked screen protector and get a case for it made out of tanzanite or something.

[Topper]

A billion will be just enough to cover the cost of gas for a couple of years in Cali.

[dirk diggler]

You plan on sending all the Jews for a shower?