Winning a large lottery prize continues to be a dream of many Americans with large payouts for the Powerball and Mega Millions in 2022 leading to both lottery drawings among the most searched items on Google for the year.
Here's a look at the latest Powerball jackpot and some items you can win if you are the lucky person with the winning ticket.
The Powerball Jackpot: At $572 million, the current Powerball drawing is one of the largest of the year, but trails the $1 billion level hit earlier this year and back in 2022.
The odds of winning the Powerball jackpot are 1 in 292.2 million. The overall odds of winning a prize are 1 in 24.9 tickets.
Lottery players can purchase tickets for $2 each in more than 40 U.S. states, choosing to pick their own numbers or receiving a random selection. Five numbers between 1 and 69 are selected, along with a Powerball number 1 to 26. To win the Powerball, a player has to match all six balls in the drawing.
The drawing takes place around 11 p.m. ET on Mondays, Wednesday and Saturdays. If no ticket has the correct six numbers, the jackpot grows for the next drawing.
Lottery Winnings: Winners of large jackpots can take a lump sum cash payment or choose to be paid out the full amount over 29 years with 30 payments. One payment is made upfront and additional payments each year go up by 5% to fight inflation.
The cash payout is lower than the full payout over 29 years. The current cash payout listed on the Powerball website is $286.7 million.
A winner will have to pay federal taxes and will be responsible for state taxes depending on where they reside.
The IRS takes 24% immediately from winnings over $5,000. This means that the cash payout for Wednesday's Powerball jackpot would be $217.89 million based on a lump sum cash option after the 24% federal taxes are taken out.
The winner could choose to save the money, invest it, or spend it on various items.
Here's a look at 10 items that could be considered.
1.S&P 500: If a winner decides to invest the money, they could consider investing in the SPDR S&P 500 ETF Trust SPY, which tracks the broad-based S&P 500 Index of 500 of the largest U.S. companies. The $217.89 million could purchase 465,646.57 shares of SPY with the winnings. The S&P 500 averaged annual returns of 9.90% over the last 30 years, which would be a better return than the 5% return on choosing the 29 years of payouts.
2. Cryptocurrency: A potential investment for the winner could be to put the money in cryptocurrency, which is often more volatile than the stock market. The winnings could be split between three popular cryptocurrencies of Bitcoin BTC/USD, Dogecoin DOGE/USD and Ethereum ETH/USD. The winnings would turn into 1,668.60 BTC, 798,482,849.60 DOGE and 33,291.62 ETH based on prices at the time of writing.
3. Investing with the Oracle of Omaha: Legendary investor Warren Buffett has been one of the top stock pickers of the last 50 years. While Buffett would tell the winner to put their money into bonds or index funds to preserve wealth, the winner could buy 204,585.779 B shares of Berkshire Hathaway Inc BRKBRK.
4. Apple Stock: One of the top-performing stocks of the last 10 years is Apple Inc AAPL, which is currently the most valuable company in the world valued at more than $3 trillion. Apple could remain a market leader for years to come, making it a potential investment idea for someone over the next 29 years. The $217.89 million could purchase 1,115,553.96 shares of Apple.
5. Magnificent 7 Stocks: One of the popular investment themes of late has been the "Magnificent 7" stocks, which are the top high-growth technology names that have carried the market higher and represent most of the gains for the broader market.
The seven components are Apple, Microsoft Corporation MSFT, Alphabet Inc GOOGGOOGL, Amazon.com, Inc. AMZN, NVIDIA Corp NVDA, Meta Platforms Inc. META and Tesla Inc TSLA.
Here's a look at how many shares of each the winnings could buy, when split equally seven ways:
AAPL: 159,34.85 shares
MSFT: 84,009.35 shares
GOOG: 222,925.90 shares
AMZN: 204,703.03 shares
NVDA: 64,392.10 shares
META: 89,130.78 shares
TSLA: 125,715.44 shares
Or an investor could put the lottery winnings into the Roundhill Magnificent Seven ETF MAGS, which tracks the seven stocks.
Related Link: 2024 Predictions For Apple, Tesla, ‘Magnificent 7’ And Musk From Analyst Dan Ives: It’s AI’s ‘1995 Moment’
6. Tesla Cybertrucks: Tesla recently completed its first deliveries of the Cybertruck electric pickup truck and announced initial pricing. Pricing ranges from $60,990 to $99,990 for the vehicle, with the cheapest version available next year coming in at $79,990. Based on this price point, the winner could buy 3,113 Cybertrucks before tax credits. The winner could choose to give away vehicles to family members and friends or build out a collection of impressive vehicles.
7. Real Estate: Another popular investing option for lottery winnings could be real estate. The average home price in the U.S. is $346,048 according to Zillow Group. The winnings could buy 629 average-priced homes in the U.S. The winner could hold the homes to gain value over the years or choose to rent them out. Benzinga has a guide on how non-lottery winners can invest in real estate here.
8. Sports Teams: For the ultra-wealthy, buying a professional sports team has been a way to preserve and gain wealth. The lottery winnings after taxes would not be enough to buy a team in the MLB, NBA, NFL, NHL or MLS. The winner could look to buy a minority stake in a team and gain wealth over time.
9. Gold: Another popular investment option over the years has been to buy gold. The winner of the lottery, who chooses a cash lump sum could buy 107,653.16 ounces of gold.
10. Superyacht: Amazon founder Jeff Bezos is one of the richest people in the world and had no problem shelling out $500 million for a superyacht. The billionaire also spends $25 million annually on the boat and its operation. The winner could buy a superyacht that isn't quite as large or extravagant as the one owned by Bezos.
This article is not intended as investment advice.
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