How to Invest $1.6 BILLION DOLLARS if you win the Powerball Lottery

What's up you guys, it's Graham here!

So here's something that's probably all crossed our minds at some point or another: have you ever been faced with the dilemma of what happens when you win the one point six billion dollar jackpot lottery, and you simply don't know what to do with all of that money? Yeah, me neither! But in case anyone here watching wins the one point six billion dollar Mega Millions lottery, which is now officially the largest lottery payout in history, it's really important for you to be smart with that money and really plan out how you're gonna spend a billion dollars, which is exactly what this video is for.

So let's discuss exactly how you should invest your money if you get such a significant windfall like this, exactly where the money should go and why so many lottery winners end up broke. And if you happen to be the lucky lottery winner who watches my channel and also subscribes, I happen to offer a lottery winner consulting service that just costs just a fraction of a billion dollars. But let's get into the video!

First off, have you ever wondered what your chances are of actually winning the Mega Millions lottery? Well, wonder no longer because according to math, your chances of winning the lottery are one in three hundred and two million. Now I get that that's a very hard number to wrap your head around! Just to put that in perspective, your chance of flipping a coin heads 27 times in a row starting on your first try is one out of 132 million. Your chances of being struck and killed by an asteroid impact is 1 out of 75 million. Your chances of being bit by a shark is 1 out of 11 and a half million. The chance of you getting struck by lightning is one out of 700,000.

And according to my own analytics, the chances of you watching this video right now and not being subscribed is only one out of two! So make sure you change that and hit the subscribe button if you haven't already! So anyway, that means statistically speaking, you are four times more likely to be killed by an asteroid or 431 times more likely to be struck by lightning than win the lottery. But that doesn't stop us from dreaming, right?

Now, in order to understand what to do with such a huge windfall whenever I win—I mean whenever you guys win—it’s first important to reckon why so many lottery winners end up broke. It's estimated that a third of all lottery winners end up declaring bankruptcy at some point after their lottery winnings, and 70% end up losing all of it after just a few years. Other studies have shown that lottery winners frequently become estranged from family and friends, are at greater risk of drug and alcohol abuse and depression, and have a greater risk of getting divorced than the average person who has not won the lottery.

So why does this happen? Now, when I started doing research on this and digging deeper, I discovered that the type of person most likely to be buying lottery tickets had very little financial background or education, hence why they're buying lottery tickets in the first place. Now, this isn't to say that wealthy people don't go out and play the lottery for fun, but it's estimated that here in California, forty percent of the people that purchase lottery tickets are unemployed. And while I couldn't find any specific studies to back this one up, it was claimed that more than half of all lottery tickets were sold to people in the lowest 30% of annual income.

So statistically speaking here, if a person with very little financial literacy suddenly subscribes to a billion dollars, chances are they're not gonna have the financial sophistication to properly manage it. And then you combine that with all of your friends and family asking for handouts, all the sob stories, all of the risky investments, all of the extravagant purchases that you've always wanted to make but never had the money to actually buy. You also don't want to be that person who says no to giving someone money when you have a billion dollars, and that's more than enough to last several lifetimes.

It's very easy to see how this could go from quickly being a dream to suddenly becoming a nightmare. So what can someone do to potentially avoid all of these issues? Now, the first thing that you should do is absolutely tell no one! Unless you're trying to fake it to get followers, in which case tell everybody! In 2016, a man named Eric Brig posted a photoshopped picture of himself on Instagram and announced that he was the winner of the billion dollar lottery. He quickly gained over 50,000 followers before it was proven to be fake. But hey, you know what? It worked! But the real winner, however, stayed quiet exactly as they should. Otherwise, you can face the real-life situation of Bow Wow in the movie Lottery Ticket, where he wins 300 million dollars and has to survive the week with everyone knowing that he won the money.

So I think it goes without saying: don't tell anyone, don't post about it, don't mention anything. You could just tell me! Then, the second thing you should absolutely do is hire an attorney. Now, many lottery winners end up setting up a blind trust held by another trust held by a parent company to try to remain as anonymous as possible when they go and claim their prize.

Now, even though this seems totally counterintuitive to me why this ever even exists, many states require you to publicly disclose yourself when you go and claim your prize, which means that all of your information could potentially be publicly leaked. This means that maybe sociopaths could go and find you! In fact, it was a New Hampshire lottery winner who successfully sued for her right to remain anonymous from claiming a five million dollar prize, and of course, she won.

Now, even though this seems common sense to me that you should have the right to remain anonymous, not only is it so important not to tell anybody about it, but it's also very important that you don't publicly claim your prize as well. You know, the third thing you should do is just take the lump sum! Always take the lump sum. This is because your other option is an annuity that's paid out over the following twenty-nine years.

Now, when you look at the money that you invest over the long term, you're almost always going to come out ahead by taking the lump sum and investing it than just taking the annuity over twenty-nine years. Even if you put all the money in something as safe and simple as a Treasury bond, you're still going to come out ahead by a landslide. The other aspect to consider is how tax laws might change over the next 30 years that might affect the income that you get from the annuity.

It's a lot less risky to lock in your tax rate right now and be taxed upfront than risk tax rates going up in the future over the next twenty-nine years. On the other end, if you know you're the type of person to tell everyone you won the lottery, to go and post about it, to go and spend frivolously, to not plan ahead at all—just do yourself the favor and take the annuity! Now, even though mathematically you're gonna end up with less over the next thirty years, sometimes less is worth way more than more of nothing if you're the type where you know you're just gonna go out and spend it on boats and hoes!

Now, number four: what do you invest all of this money in to make sure it will last you many generations and many lifetimes without ever having to worry about money again? Well, if you take the lump sum payout at one point six billion dollars, you're gonna be left with about nine hundred million dollars. Now then, after paying about fifty percent of that to federal and state taxes, you're going to be left with four hundred and fifty million dollars net in your pocket after paying Uncle Sam.

Now, if this were me and I won the lottery, this is exactly how I would spend that four hundred and fifty million dollars. The first thing that I would do is put a hundred and fifty million dollars into a low-cost total stock market index fund by Vanguard. This gives you exposure to the entire US market, and assuming you just spend three percent of this annually, that is going to give you a very cool three hundred and seventy-five thousand dollar per month income without ever touching the principal.

Now from there, I would put another 150 million dollars into a low-cost total bond market index fund to also buy Vanguard. This will give you a very safe, very stable investment that you can rely on because, after all, at this point, it's more about wealth preservation than it really is about growing this to any absurd levels and taking unnecessary risks. Now, according to Vanguard, the total yield on this bond index is 3.24% annually, and if we did the same thing as above and we only decided to spend 3% of that, that would leave us with another very cool three hundred and seventy-five thousand dollars per month in income.

So now after we've spent three hundred million dollars, I would then take another fifty million dollars and spread that across commercial triple net real estate in highly dense cities like Los Angeles, San Francisco, or New York. I'm talking about investing in shopping centers and office buildings—everything at long-term triple net leases, which means the tenant is responsible for the entire building's upkeep and maintenance. If you end up having long-term 20 or 30-year leases on these buildings, that should provide a very safe, very stable 4% annual return on that investment.

You can also use a lot of that real estate to income and depreciation to write off some of the income you're beginning from other sources. So again, let's assume you do the same thing as the other two examples where you spend 3% and then you save the other 1%. This will give you another very cool 125,000 dollars every single month in income.

I would then take another 50 million dollars and spread that throughout some very safe residential real estate in highly populated cities again, like Los Angeles, New York, and San Francisco, mainly in buying apartment buildings. This gives us a little bit more diversification against commercial real estate while still being able to utilize a lot of the tax benefits of owning real estate. Just like in the previous example, you can easily achieve a net 4% return, spend only 3% of that, and again be left with another 125,000 dollars in income every single month.

Now, at this point, you would still have another 50 million dollars left over. Now, if it were me, I would keep 10 million dollars in a cash reserve spread throughout several banks across the world, and that gives you 40 million dollars to spend on pretty much whatever you want! How is this? Lambos, boats, and hoes—whatever you want! That forty million dollars is yours to spend!

At the same time, all of your investments are gonna be bringing you about 1 million dollars of income every single month indefinitely without ever touching the principal. So being able to blow forty million dollars on whatever you want, having ten million dollars as a cash buffer, and having 1 million dollars a month in income for the rest of your life for as many generations as you possibly can think of will prevent you from going broke.

And this is, you guys, exactly how you should spend four hundred and fifty million dollars net after taking the lump sum and after paying taxes if you end up winning the Mega Millions lottery. Good luck, and remember to throw a few million my way in the event you win!

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Just type in GP Stefan on Instagram and then just click the little follow button. Really easy to do! It's free! It's free! I just told you how to spend four hundred and fifty million dollars, so the least that we can do—so anyway, feel free to add me there. Thank you again for watching, and until next time!