In this informal explainer, the presenter breaks down the difference between the advertised $1.5 billion lottery jackpot and the actual cash option a winner would receive. The video explains that the lump‑sum cash payout is about $930 million (roughly 62 % of the advertised amount) because the lottery invests the remaining funds over a 30‑year annuity. The presenter then walks through the tax implications: the $930 million is treated as ordinary income, placing the winner in the highest federal tax bracket (39.5 %), which reduces the amount to roughly $570 million after federal taxes. State taxes vary, with some states charging none, while others range from about 3 % (New Jersey) to 8.6 % (New York), further trimming the net. Excluding state tax, the net after federal tax is about $570 million, still a massive sum. The video ends with a brief cautionary note about prudent investment and avoiding wasteful spending.
MrBeast!
The jackpot for the last lottery was $1,500,000,000. Now let's say hypothetically you won the $1.5 billion jackpot. Do you know how much of that money you would actually keep? You see, if you won the $1.5 billion and you asked for the money immediately, you would not get $1.5 billion. If you asked for all the money right when you hand them the ticket, they're only gonna give you $930 million. But if you spread out the payments over 30 years, you will receive the full $1.5 billion. This is because the lottery lies to us. You know, when you see the billboard or the commercials, you see $1.5 billion, how they advertise the jackpot being that high. That's not how much money they have. In fact, they only have $930 million, 62% of that, but they advertise it at $1.5 billion, which is why if you won the $1.5 billion lottery and asked for the money right away, they'd only hand you a check with $930 million. But if you spread it out over 30 years, that gives them time to invest the $930 million. And so if you spread it out over 30 years, you would receive the full $1.5 billion they advertise. But that's only if you wait 30 years instead of asking for it up front. This is because they take the money and invest it. Obviously, if you borrow $1,000 from a bank, you're not going to owe the bank $1,000. You're going to owe the bank $1,000 plus interest. So you're going to owe them like $1,100, and that's what the lottery does. If you wait 30 years, then that gives them time to loan out the money to people and make, you know, investments, you know, make return on their money. And that's why if you get the money right away, you get $930 million, but if you wait 30 years, they will invest it and you'll get the full $1.5 billion that they advertised and told you you would. So anyways, let's say you took the $930 million. Well, now you have to pay your federal taxes, which, because you got $930 million and that is classified as income to the government, that puts you in the highest tax bracket, which means you have to pay 39.5% taxes on your $930 million, which basically means of your $930 million, you're gonna owe the government $368 million, which is only gonna leave you with like $570 million after that. And then lastly, you have to pay your state tax, which 6 different states don't actually charge a tax. So that's pretty nice if you win in one of those states. But the lowest state is New Jersey, which charges 3%, and The highest is New York, which is like 8.6%. So if you win in New Jersey, you know, after the $570 million after federal, and you know, the lottery takes their part, and then state tax is probably going to take, you know, from New Jersey like $20 million, so you're still going to be left with, you know, $540 million. But if you win in New York, that 8% is actually going to take a little bit of a chunk, you know, because 8% of a billion dollars is $800 million. So $500 million, 8% of that's still going to be like $40 million. So if you win in New York, try to move somewhere else before you claim your ticket or something like that. I don't know if that's how it works. Anyways, that's that. So all said and done, you win the lottery. Let's exclude the state tax just because that's based on where you live. If you win the lottery, you're going to get $570 million. That's not including state tax, and it's advertised as a $1.5 billion lottery. But if you actually win, you're only going to get $570 million, which is still a lot. Your kids, kids, kids kids, kids, kids, and no one in your family is ever going to have to work as long as you invest it and aren't, you know, an idiot and blow it all in like cocaine and alcohol and stuff like that. So anyways, that's the video. Hopefully you enjoyed.
