For only the second time in history, a lottery jackpot — in this case, the Mega Millions jackpot — is now over a billion dollars in payout. And while even a fraction of that money would be life-changing for just about anyone reading this article, that kind of cash 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 — assuming 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 as a lump-sum payment of roughly half of the advertised total. The second option amounts to $565.6 million as of this writing, according to the Missouri Lottery.
The very first thing that’s going to happen — regardless of which form of payout the winner selects — is that the so-called “tax man” is going to take their cut. So, if our hypothetical winner takes a lump-sump payment, he or she will wind up with about $400 million.
And while $400 million is a staggering amount of scratch, it’s not a font of unlimited wealth.
If the winner wanted to buy the most expensive home in America, for example, they’d have to shell out approximately $250 million for the Bel Air, California, property — according to Business Insider — taking 62.5 percent of their nest egg with it. The property taxes, maintenance costs, and utility bills would be extravagant, and the winner would be broke again in approximately ten years.
The winner could probably get a private jet, however, if they wanted to go broke keeping it. According to Bankrate, a fully-equipped ride costs about $70 million — but requires a pilot to fly it, a crew to keep it running, and a hangar to store it in. Fuel costs simply add to the luxurious price tag attached to such a high-flying venture.
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 the winner took the whole advertised jackpot, and didn’t lose out on taxes. A more “modest” yacht would set the winner back by about $200 million, but they would, again, have to fuel it, harbor it, and crew it.
The bottom line is that wealth is all relative. A $400 million check would launch the winner into stratospheric net worth, but they would still be a pauper compared to the world’s richest people.