Not as much as you think, as it turns out. For only the second time in history, a lottery jackpot – in this case, the…
Not as much as you think, as it turns out.
For only the second time in history, a lottery jackpot – in this case, the Mega Millions jackpot – is over a billion dollars. And while even a fraction of that money would be life-changing for just about anyone reading this article, that kind of money doesn’t necessarily mean that anything and everything is within reach.
For starters, no one is going to win a billion dollars all at once – that’s not how lotteries work. Even if we exclude the very real possibility that the billion-dollar jackpot is split among multiple winners, a single winner isn’t getting a billion. Far from it.
The winner (and for this article, let’s assume that it’s a single winner and that the jackpot isn’t split) will have a choice to make. He or she can take the money either as an annuity – the advertised jackpot in annual payments of $40,000,000 over 25 years – or a lump-sum payment of roughly half that ($565.6 million as of this writing, according to the Missouri Lottery).
The very first thing that’s going to happen, lump-sum or annuity, either way, is that the Tax Man is going to come calling. So if our hypothetical winner takes a lump-sump payment, he or she will wind up with about $400 million, give or take.
That’s not a billion.
And while $400 million is a ridiculous amount of scratch, many times over, it’s not a font of unlimited wealth.
If you wanted to buy the most expensive home in America, for example, you’d have to shell out $250 million for the Bel Air, California property (according to Business Insider), taking 62.5 percent of your nest egg with it. The property taxes, maintenance costs, and utility bills would eat you alive, and you’d be broke again in ten years.
You could probably get a private jet, however, if you wanted to broke keeping it. According to Bankrate, a fully-equipped ride will cost you $70 million – but you’d need a pilot to fly it, a crew to keep it running, a hangar to store it in. And you’ll need to put fuel into it. Again, you’d go broke trying to be rich.
And let’s not even get started on luxury yachts. According to Greek lifestyle magazine Luxehabit, the most expensive yachts top out at about $1.1 billion – out of reach even if you won the whole jackpot and didn’t lose out on taxes. A more “modest” yacht would set you back $200 million, but you’d have to fuel it, harbor it, and crew it.
The bottom line is that wealth is all relative. A $400 million check will launch you into stratospheric net worth, but you’ll still be a pauper compared to the world’s richest people. And that means that their toys will continue to be well outside of your reach.
