'A major ongoing financial burden': $2B Powerball winner buys 3rd multimillion-dollar home, Porsche 911 reports say. Experts call it a mistake — 3 ways to better diversify your portfolio (2024)
If you were to win the lottery, what would you do with the money? Perhaps purchase a $50 million mansion, complete with a champagne room and DJ turntables?
That’s apparently what Powerball winner Edwin Castro has recently done, according to USA Today.
The publication reports Castro bought a luxury Los Angeles property for $47 million in September. It’s his third high-value home purchase since he won his $2 billion jackpot last year — he’s also bought a $25.5 million mansion in Hollywood Hills and a $4 million home in Altadena, California.
And luxury homes aren't the only thing Castro seems to be spending his money on. Apparently, he also got his hands on a sweet set of wheels. According to the New York Post, Castro has been spotted cruising in a $250,000 vintage Porsche 911.
Castro definitely seems bent on enjoying his riches, but despite such a large jackpot win, can one afford to keep spending at such a pace?
Financial observers believe Castro is making big mistakes with his newfound fortune. Experts interviewed by Fortune say that buying up luxury items like fancy cars and houses after a big windfall can put you on a fast track to bankruptcy.
Paul Karger, co-founder of wealth advisory firm TwinFocus, told the magazine that luxury homes often become “a major ongoing financial burden that [can take] several years to sell.”
Simply maintaining a home can cost 1% to 4% of its value annually, which means Castro could potentially spend millions of dollars each year just to hold on to such properties. This alone could take a chunk out of his winnigs.
So if real estate isn’t necessarily the best way to spend your fortune, what are other ways to diversify your investments?
Alternative real estate investments
Buying million-dollar homes may not necessarily be wise for lottery winners, but clearly nobody told Castro about alternative real estate investments. These are investments that get you in the real estate market without having to own a physical property.
Real estate investment trusts (REITs) are one of the ways to do just that. REITs own profitable real estate investments, like apartment buildings and shopping centers. You receive dividends from the rent that they collect – all without the hassles that come with being a landlord.
Read more: Owning real estate for passive income is one of the biggest myths in investing — but here's how you can actually make it work
Artwork investments
Billionaires don’t invest in art just for a pretty picture on the wall, but because it can be a great investment. ArtTactic reported a 64% increase in single-owner sales value in 2022.
Though some art pieces can sell for millions of dollars, you don’t need to win the Powerball to invest. You can become a fractional investor in a classic work of art. It’s similar to investing in a stock: you don’t own the entire painting, but just a share of it. Plus, you don’t have to spend hours scouring galleries for the right piece or store it yourself.
Alcohol investments
It’s said that wine gets better with age. That goes for taste and sometimes value as well, as bottles of fine wine become more rare with each passing year.
It’s possible to invest in wine by purchasing your own bottles — but that requires a place to store them at the right temperature, and wine cellars can cost tens of thousands of dollars.
Since not all of us have won the lottery, there exist wine investing platforms that do the hard work for you. That includes selecting, storing and insuring bottles of wine — and they’ll even suggest good times to sell.
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The winner of the record-breaking $2 billion Powerball jackpot is being sued by a man who alleges the ticket was stolen from him by a guy named 'Reggie' A man is suing the winner of the $2 billion Powerball jackpot alleging the ticket was stolen. Edwin Castro was identified as the historic winner in February.
What did $2.04 billion lottery winner do with his prize money? Since his historic win, news reports show he has splurged, buying three multimillion-dollar homes in California and at least five vintage cars.
Scammers are impersonating lottery winners on social media, often using the names of real winners to make their posts sound legit. If you reply to their posts, the fake lottery winner might ask for your phone number and send a text saying you won the money but need to act fast. That's the first red flag.
(NewsNation) — A man who won $1.35 billion playing Mega Millions is now fighting his family in court, with relatives saying he owes them part of the jackpot. The Maine man, who is named as John Doe, won the jackpot in January of 2023, opting for the lump sum payment.
Currently the two highest income brackets are taxed at 37% for incomes over $578,125 and 35% for incomes over $231,250. The governing lottery body withholds 24% of the prize automatically, leaving the balance to be paid by the winner, according to Lottery USA.
From the start, the winner losses 24% federal tax withholding that goes off the top to the IRS. On the $2.04 billion win, the cash election is really $997.6 million. Tax withholding of 24% amounts to $239.4 million, leaving $758.2 million.
The ticket was sold at Joe's Service Center in Altadena, Calif., just north of Pasadena. On Feb. 14, 2023, California Lottery officials revealed the name of the winner, Edwin Castro, but did not release further information about him at his request.
That's because lottery winnings are treated as income by the federal government and most states, so the jackpots are subject to state and federal income taxes. However, there are 13 states that do not collect taxes on residents' lottery winnings.
“Most people take the lump sum because they want the money, they want to control it,” Robert Pagliarini, president and chief financial advisor for Pacifica Wealth Advisors and author of “The Sudden Wealth Solution,” previously told Nexstar.
“If you're lucky enough to win the lottery, keep it quiet," says Rob Burnette, financial and investment adviser at Outlook Financial Center in Troy, Ohio. "Get organized and make a plan. Consider staying anonymous, if it's a possibility.”
California resident Edwin Castro is the sole winner of the record-breaking jackpot from November 2022. The California Lottery is maintaining it verified the rightful winner of the record-breaking $2.04 billion Powerball jackpot, after a man claimed he had the winning ticket before it was stolen from him.
The largest Powerball jackpot in US history was won by Edwin Castro in Southern California, totaling $2.04 billion. The ticket was sold in Nov. 2022 at Joe's Service Center in an unincorporated community near Los Angeles. Here is a list of the largest jackpots won in the US and the state where the tickets were sold.
California resident Edwin Castro is the sole winner of the record-breaking jackpot from November 2022. The California Lottery is maintaining it verified the rightful winner of the record-breaking $2.04 billion Powerball jackpot, after a man claimed he had the winning ticket before it was stolen from him.
The wins for Alvarez and Struyck continued the string of Californians claiming big Powerball jackpots: In 2022, the largest Powerball jackpot in history, worth an estimated $2.04 billion dollars, was claimed by a California Lottery player.
Nearly one-third of lottery winners eventually go bankrupt within three to five years, which is more likely than the average American, according to the Certified Financial Planner Board of Standards.
For most, winning the lottery is a distant dream. But for Edwin Castro, it became a reality when he struck gold with a $2.04 billion Powerball jackpot in November 2022, the largest in history. Choosing a one-time lump-sum payment, Castro received an astonishing $997.6 million, just short of a billion.
Introduction: My name is Stevie Stamm, I am a colorful, sparkling, splendid, vast, open, hilarious, tender person who loves writing and wants to share my knowledge and understanding with you.
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