5 Ways to Spend a Billion-Dollar Lottery Jackpot

TL;DR: Don’t do any of these things, at least not without first having a heart-to-heart with a financial advisor.

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Written by Rick VanderKnyff
Senior Assigning Editor
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Assistant assigning editor at large
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Billion-dollar jackpots are getting more common, thanks to some behind-the-scenes-tinkering by the people who bring you Powerball and Mega Millions. In fact, there were six billion-plus jackpots in 2022 and 2023.

Most of us, alas, won't see that kind of money in our lifetimes. But just in case: How much is that, really?

OK, let’s say you just scored a job with a dream salary of $1 million a year. Go, you! So, at that blistering pace, just how long would it take you to earn a billion dollars in total salary?

Oh, only a thousand years.

So it’s not surprising that when a potential shortcut to big-time riches is dangled in front of us, we reach for it. Somebody’s going to win that jackpot, so why not us? And if we don’t, that $2 was worth the daydreams it spawned. Right? Right?

Stay with me here. If you’re having trouble daydreaming, I’ve got some starter ideas for you. Most aren’t practical, or even socially responsible. Some might be called vulgar. Still, I think you’ll find they’re kinda fun to think about.

We’re NerdWallet, so allow us a sober moment here before we drift off fully into dreamland. Here’s a bit about how a big jackpot really works, and what you do should any large sum of money magically fall into your hands.

  • How much do I really get? Let's say you win an even $1 billion. Alas, you don’t actually get all that money if you win. Oh, no. If you choose a lump sum, you get a little more than half of that: about $516 million. Or you can spread those billion bucks over 30 years. Which will it be?

  • Do I have to pay taxes? Of course you do. There’s 24% in federal taxes off the top, probably more down the road, plus state income taxes where they apply. (You can do the math on our lottery calculator.)

  • What are my chances of winning? Sorry, but you asked. They’re roughly 1 in 303 million.

If you do win, or otherwise become instantly wealthy, please don’t rush off and do any of the things on this list without first getting some real, trusted financial and tax advice. And lay low until you figure this all out. A billion dollars should last a while if you play it right. And if you’re still tempted to blow it all at once, read one of the countless lottery horror stories on the web. Murder! Divorce! Bankruptcy! Betrayal! Endless, soul-sucking legal proceedings! (Trust me, just search for “lottery horror stories.”)

Individual reality checks are offered for each item below. You may shield your eyes if they spoil the mood.

So, here are five often irresponsible things that you could do with your jackpot winnings, should you win. But you won’t. (Just kidding. You totally could.)

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1. Buy a big (and I mean really big) boat

Interesting fact: Billionaires, on average, take up no more physical space than non-billionaires, yet require much larger boats.

But seriously, is there anything more cliché than a rich person owning a yacht? So lean into it. If someone gives you grief, call it irony. Or ignore them. You’re rich, am I right? Get one of those skipper hats, then buy a big yacht. Superyachts also come in handy should you decide to become a supervillain.

I did a little shopping at yachtworld.com and found a lot of yachts for sale, and settled on an adorable little German-made yacht, 331 feet long (football field, plus one end zone, for reference) and only $185 million. It’s brand-new — in fact, you have to order it and wait 42 months. But that will allow you to add your own private touches, the particulars of which we don't need to hear about, frankly. And as long as you have to wait anyway, why not just order two?

Reality check: There will probably be a tax of some kind depending on where you live, where you buy your boat and how creative your accounting team is. Also, don’t forget you need to hire a crew. These things don’t drive themselves. Towergate Insurance, a maritime insurance company, estimates the annual operating cost for a luxury yacht to be 10% of its initial value. Did you imagine budgeting almost $19 million for things like fuel, dockage, vessel insurance, maintenance and repairs, and crew salaries in your yacht fantasy? I bet you didn't.

Fun billionaire fact: Jeff Bezos decided he wanted the biggest yacht in the world (naturally), and it has been under construction in Rotterdam, Netherlands. The boat is almost ready, but there’s a hitch — it’s too big to pass under the bridges that lead out to the open sea. It’s stuck in the harbor. Twitter loves this story.

Nerdy tip: If you really want a boat, lottery be damned, you can get a personal loan for that.

2. Buy a private jet

A private jet carries much the same baggage, metaphorically speaking, as a boat, while being faster. I’ll lay out my own prejudices: Rich people with a private jet want to project a ruthless corporate-raider image, rich people with a gigantic yacht are inherently partiers who fell into a lot of money, and rich people who own both are corporate raiders who want to pretend they have fun sometimes. Forced to choose, I’d be a boat person. However, planes do also get points for supervillain potential.

It’s hard to price new jets. The websites are coy. Basically, if you have to ask, you can’t afford it. So I looked at used jets on avbuyer.com. I found a 2020 Gulfstream G600 — the only G600 currently for sale, according to the ad — for just under $53 million. Do you go to a lot of places? Do you need to get to them fast? And alone, if possible? This may be your ticket.

Reality check: Taxes. Operational costs, again. I’m not going to look up the math this time, just assume it’s a lot. Also, an indefensible carbon footprint. Don’t buy a jet, seriously.

3. Buy a house. Heck, buy houses for all your friends.

The national average price of a home, say the feds, is $525,000. If you had $1 billion, by my calculations, you could buy about 1,900 average houses. That’s more than one person could live in, presumably, but you could give houses to all your friends and family and still have houses left over for bare acquaintances. Houses for everybody you know, plus everybody you think you know, and probably even some of the people who heard you won the lottery want you to think they're people you know.

But maybe you’re newly elite and want to live in a coastal city. Average just won’t do. San Francisco usually ends up at or near the top of “most expensive city” lists, and Zillow says a “typical” house there costs $1.6 million. Again, by my calculations (and I was a journalism major, mind you), you could buy 625 houses with a billion dollars. Friends and family still in, hangers-on may have to be pared back.

If you wish to buy fewer houses in closer proximity, you could buy what the Bohemia Realty Group site alternately calls a “neighborhood” and a “compound” in the Bronx — “where you can gather your extended family or co-workers in one picturesque location and still be within NYC.” I find myself slightly skeeved out by this listing, but if this is your thing: $120 million for 15 brand-new luxury homes ranging from 8,000 to 15,000 square feet, each with a pool and an elevator.

Reality check: There are annual property tax and maintenance costs to consider. That’s true if you buy one or many houses. And, remember, you don’t really have a billion dollars, even if you win.

Nerdy tip: If you want to buy a house whether you win the lottery or not, check out our fancy mortgage calculator.

4. Give it away

Really, if we’re honest about it, who needs a billion dollars, or the things a billion dollars can buy? A billion dollars is a ridiculous amount of money for one person to possess. But that kind of money can do a lot of good in the right hands. That kind of money can make a difference.

I’ll weave the reality check right into the item here. Give away as much as you feel comfortable giving away, but leave yourself and your significant circle enough to live on comfortably. For as long as you expect to live, and then some. Get expert advice before you give any person or organization a dime. Then decide what causes you’re really passionate about.

And if you decide you want to make giving an important, ongoing part of your life, create a family foundation. That builds a process around each decision. Let your money do smart work. Foundations in the United States gave away $90.88 billion in 2021, according to the National Philanthropic Trust, supporting everything from the arts to the environment to social justice. Well spent, the money can build a social good. But do it carefully so you don’t become another lottery horror story.

Nerdy tip: You don’t have to be rich to give your time or money. And, in some cases, your donations can generate tax benefits.

5. Buy an island. Or make a movie.

I didn’t know which to choose for my fifth and last item, so I picked both. I’ll handle them separately first.

Make a blockbuster: Some movies make a billion dollars in profit, so theoretically you could make your money back and then some. How much does it cost to make a blockbuster? The newest Thor movie from Marvel cost about $250 million to make, according to Variety. The most expensive movie ever made was “Pirates of the Caribbean: On Stranger Tides,” at an estimated $379 million. So what could go wrong?

Buy your own island: May I interest you in Pumpkin Key, one of the famed Florida Keys? Ten minutes to Miami by private helicopter (note to self: buy helicopter). Pumpkin Key is 28 acres and will set you back $95 million. It has a single large home, but plans sketch out a compound (there’s that word again) of 12 additional homes, according to the Vladi, an online marketplace of islands for sale or rent. Pumpkin Key includes a “dock master office and 20-slip marina able to accommodate a mega-yacht.”

And there you have it. A place to park the yacht we bought earlier in this article and thus complete the supervillain ensemble.

Or do both: Hear me out: Buy the island, make a pirate movie. The world is ready again.

Reality check (movie): Movies often flop. Also, movie costs cited in the press (and above) are typically just the production costs and don’t include marketing and distribution, which can run into tens of millions of dollars. “Avengers: Endgame” spent $200 million on worldwide marketing — and seriously, do you want to compete with Disney? Start small. Find a kid with a camera and an idea and see what they make. Even if it’s bad, it’s bad for the right reasons.

Reality check (island): Don’t forget property taxes. Also, sea-level rise is swallowing the Keys, thanks in part to people in private jets and superyachts.

Reality check (island and movie): Pirate movies are never coming back. “Our Flag Means Death” is a good show, though.

Good luck.

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