What would you do if you suddenly won $1.5 billion? On Jan. 13, 2016, one very, very lucky winner could walk away with the highest Powerball jackpot ever. However, if you'd like the earnings all at once (instead of over 30 years), you'll get $930 million. Then, after a 39.6 percent federal tax cut, you're left with $561.72 million -- still an enormous amount for the average person.
Suddenly coming into such a huge fortune can be overwhelming. A study by the National Endowment for Financial Education found that up to 70 percent of people who suddenly receive a large sum of money (such as an inheritance, insurance payout or lottery win) go broke within five years.
With all this cash, what can you do that won't leave you filing for bankruptcy? We decided to investigate some fun -- and mostly practical -- ways to spend and invest your winnings while having a decent amount left over.
1. Pay off your student loans and credit cards: $44,000
It seems like a no-brainer to pay off any student loan and credit card debt you may have, especially when the amount would likely hardly make a dent in your winnings. College students who graduated in 2015 owe an average of $35,000, and a balance-carrying household has an average of about $9,000 in credit card debt. It's probably wise to use some of your winnings to pay them off immediately, especially since credit card interest rates have crept higher with the federal rate hike in late 2015.
Cash left: $561,676,000
2. Own a fast-food franchise: $3,500,000
Have you ever wanted to own your own business? Besides getting to be your own boss, running a successful business means that you'll continue to build wealth and you'll still have money coming in if you do happen to blow through all your winnings. However, starting a business from scratch may seem scary. If that's the case, consider becoming part of a franchise. Some fast-food franchises require just a few hundred thousand dollars to get started, while others may require a few million. Either way, you have the money now -- and your net worth would probably dwarf any minimum needed.
Cash left: $558,176,000
3. Pay off a mortgage... or three: $471,450
Buying a house is probably the most expensive purchase for many Americans. The average mortgage balance is about $157,150, with the most expensive states boasting average balances of $250,000 and more. In addition to any credit card or student loan debt, you can easily take care of your mortgage, but why stop there? You can also pay off any mortgages your family members might have. Taking care of your own mortgage, your parents' mortgage and even a sibling's mortgage would only put you back about $471,450.
Cash left: $557,704,550
4. Send 8,076 high school students to college: $274,584,000
Getting an education is pretty expensive, and the cost of going to college keeps rising. According to The College Board, a nonprofit organization that helps prepare students for college, in 2010, the average cost of attending a public four-year out-of-state college was $28,000. Now, the average cost for attending college from 2015 to 2016 has risen about 21 percent to $34,000. With some of the money you have left, you could cover a year of tuition, fees, and room and board for the largest high school in the U.S., which has 8,076 students.
Cash left: $283,120,550
5. Buy a private island: $5,500,000
Forget buying a vacation home on the California coast or in Florida. With this much money, you can truly splurge on a home away from home. You may think private islands are for celebrities and CEOs, but like houses, private islands can come in all different sizes and prices. Some of the cheapest islands start at less than $100,000, but let's say you're after something nicer, like an island in the Caribbean. Even then, that'll only set you back $5.5 million.
Cash left: $277,620,550
6. Buy 100,000 shares of Johnson & Johnson: $10,000,000
If used wisely, your lottery winnings could last you a lifetime, even after considerable spending. However, you could also grow your wealth by investing some of it in dividend stocks, which typically will pay you every quarter just for being a shareholder. While Johnson & Johnson may not be as cool or attractive as Apple or Netflix stock, it's a dividend aristocrat, which means it has increased its dividend payout every year for at least 25 years. Right now, Johnson & Johnson is paying around 75 cents per share every three months. If you were to buy 100,000 shares at around $100 per share, you could expect to get paid $75,000 or more every quarter without even having to lift a finger.
Cash left: $267,620,550
7. Start a fund for something you care about: $199,463,300
If you have a specific passion or interest, you could start a fund to finance projects, research and causes you care about. Perhaps you could be the next Alfred Nobel, who left what today would amount to about 1.7 billion SEK, or roughly $199,463,300 USD, in his will to start the Nobel Prize. With some money management and investing, your fund could continue to grow beyond your initial contribution and last for ages. Whether you're interested in space exploration or wildlife conservation, there are some noteworthy projects that could benefit from your winnings.
Cash left: $68,157,250
8. Set up you and your family for retirement: $8,000,000
It's a common question: How much do I need to save for retirement? One factor to consider is the retirement lifestyle you want. Assuming you and each of your family members reach the age of 65, on average, women can expect to live until about 87 years old while men can expect to live until about 85. If you, both your parents and your sibling retired at age 65 and lived until an average age of 86, setting aside $2 million per person -- not accounting for any income you could gain through investing -- would give each person an annual income of just over $95,000, allowing you to live a comfortable lifestyle.
Cash left: $60,157,250
9. Take 350,000 people to Disneyland: $54,250,000
What child or adult would say "no" to a day at The Happiest Place on Earth? With most of the money you have left, you could take yourself and 349,999 of your closest friends to both Disneyland Park and Disney California Adventure Park, since one-day park-hopper tickets currently cost $155. In California, 350,000 people is slightly less than the population of Placer County, which is just northeast of Sacramento. Alternatively, you yourself could go to Disneyland for 350,000 days, or a little under 959 years. We think it's probably more fun to spread the happiness and spend a day out with other people.
Cash left: $5,907,250
With $561.72 million, there are countless ways to spend and still have plenty of money left over. Maybe your dream is to build your own house, move to a new country or quit your job. Whatever it is, you could probably achieve it. You could also make an impact in other people's lives, whether it's making sure your parents are financially secure for the rest of their lives or supporting a cause you believe in. So, what would you do with $561.72 million?
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