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How to invest $ 1.6 billion Mega Millions winnings




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Mega Millions lottery tickets are printed by a lottery machine at a grocery store. (AP Photo / Nam Y. Huh)

One of 300 million. is not good, but your chances of winning the massive Mega Millions lottery are as good as the next person. The current jackpot is estimated to be over $ 1

.6 billion. It's $ 1,600 for those who are used to to see less prizes According to the United States Mega & nbsp; lottery website the lucky winner will bring home $ 687 million after tax if he or she chooses the cash option – life-changing wealth of any standard. fun to just dream how would you spend or invest the money if you used to be. The possibilities will be endless. Well, almost.

You can still not buy an NFL team or an NBA franchise. They are reserved for the many billionaires, not anyone who has just 687 million dollars. Still, you can still afford most of the life outages. When you & nbsp; Having shared the wealth with family members and your favorite charity organizations, you would eventually have to come down to business to invest in your mouth. Do not worry; There would be many counselors knocking on your door with all kinds of ideas. Help is only a 1% fee away, after all. But if you're more of DIY investor (who most likely will change $ 687 million to your name), there are some suggestions to get you started.

Diversification should be the key to preserving your capital. It will include an allocation to private equity, stock market, hedge fund, real estate and interest income – & nbsp; Like the model, many giftings follow . Within each bucket, a single investment in a company, strategy or fund should not be greater than 3%. There is no need to take outsider. You would be in the "get rich" game, not the "get rich" game. It is impossible to predict what your actual return would be; but in the long run, you can expect to make around 5-6% of your investments annually, depending on the distribution of property distribution, market conditions and advisory fees. It will give you an annual allowance of over $ 30 million (before tax) without eating into the principal. There are many tools available for forecasts return by asset class. The projected gross return in each asset class described below is from JP Morgan Asset Management .

Allocations from Garth Friesen. Expected return from JP Morgan Asset Management. [19659000] Garth Friesen

Cash

Not that you need "rainy day" money with a net worth of nearly $ 700 million, but have a modest 5% allocation (about $ 35 million) of cash or liquid short-term investments It is possible to be quick with investment opportunities when they arise. Also, it may be useful if you find yourself in a situation where you need to buy a yacht, jet or a smaller league baseball team. All sorts of surprises happen in life. Expected Gross Return: 2.0%

Private Equity

You can afford some illiquid investments when you have hundreds of millions of dollars to go to work. Private equity investments often require a 7-10 year commitment, but returns have historically exceeded public markets. & Nbsp; You can catch the "illiquidity principle" associated with linking your money for such a long time. Allotments should include a variety of strategies: traditional buyout funds, timber, private debt, risk capital, etc. Choose about ten funds across different market segments and geographic areas and allocate to them. Expected gross return: 7.25%.

Hedge Fund

Hedge funds have not been very good in recent years compared to the US stock market. There are many explanations (or apologies) for the weak return, but one reason is that most hedge funds are actually secured! Few hedges have 100% long exposure to the stock market because their investors want a different / uncorrelated return stream. If investors wanted 100% beta for S & P 500, they could simply buy a cheap ETF. Hedge fund investors are waiting for the day when a dynamic, secured portfolio surpasses the broad public equity market. Given the volatility to late, such a day may come sooner than later. Diversify your hedge fund allocation by not setting more than 3% of the weight of a single manager or fund and spreading your money on multiple strategies: Long-term equity, interest-income-related value, unpleasant credit, event-driven, etc. Expected Gross Return: & nbsp; 4.25%.

Real Estate

The real estate breakdown should not include your newly acquired beachfront or castle in France. The main purpose of the allocation to real estate is for the tax-efficient income and potentially attractive long-term total return. It is also happening to give you inflation protection, which is important since inflation can be a primary driver of wealth erosion ( refer to Venezuela to see the devastating effects of hyperinflation ). Investments should include both commercial (office buildings, hotels, warehouses, etc.) and residential properties (multi-family complexes as apartment complexes). These investments should also be diversified across geographic areas. Some of the best opportunities (and potential returns) are abroad. This is the hardest allocation to do-it-yourself. Hire a company with expertise in the area and be prepared to spend time being careful at the chateaux. Expected Gross Return: 6%.

Public shares

Unlike hedge funds, private equity or real estate, you are likely to invest in public stocks as long as you keep going on the market for a long time and do not try to select next Google or Amazon. Drilling, cheap index funds or ETFs can give you exposure to the entire market. It should include an allocation to international and US equities in addition to emerging markets. The target for & nbsp; should be trying to get the market return instead of trying to beat the market. Add stockpiles to the precious leaders in the portfolio of hedge funds. & Nbsp; Expected Gross Return: & nbsp; 6%.

Fixed Income

Yes, your return is low, but you need a steady source of income for your new lifestyle. House employees and auditors' auditors and lawyers need to be paid; You will not be in a situation where you are forced to & nbsp; cash one of your towers to meet your payroll. Interest income also tends to sing when your other risk-based assets fall. This will not always be the case, but an uncorrelated return flow is the primary objective of investment diversification and explains why many of the largest long-term investors & nbsp; Maintain at least some allocation to the bond market. You should spread the money around the various interest rates: corporate bonds, municipal bonds, US government bonds, agency bonds and some bonds from higher-yielding emerging markets. Expected gross return: 3.5%.

As mentioned above, the expected mixed annual gross return for this asset allocation is close to 5-6%. The goal, remember, is to be rich and not make investments where you risk losing everything. A 5% return of $ 687 million is $ 37 million a year – sufficient for anyone who wants to live a & nbsp; rock star lifestyle. Jackpot fever consumes the nation, but as it says, "do you have to be in it to win it". Despite the odds, the imagination of winning can only be worth the $ 2 ticket price.

The views mentioned above are the author's and not his employers or other partys. These views should not be interpreted as investment, legal or tax advice. When you win the lottery, consult your professional financial advisors before investing your winnings.

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Mega Millions lottery tickets are printed by a lottery machine at a grocery store. (AP Photo / Nam Y. Huh)

One of 300 million. The odds are not good but your chances to winning the massive Mega Millions lottery is as good as the next person. The current jackpot is estimated to be over $ 1.6 billion. It's $ 1600 million for those who are used to seeing smaller prizes. According to the United States Mega Lottery website, the lucky winner will take home $ 687 million after tax if he or she chooses the cash option – life-changing wealth according to any standard. fun just dreaming about how would you spend or invest the money if you won. The possibilities will be endless. Well, almost.

You still can not buy an NFL team or an NBA franchise. They are reserved for the many billionaires, not anyone who has only $ 68 7 million. Still you can still afford most of li vets extravaganser. Once you've shared the wealth with family members and your favorite charity organizations, you'll eventually have to come down to business to invest in your mouth. Do not worry; There would be many counselors knocking on your door with all kinds of ideas. Help is only a 1% fee away, after all. But if you are more of DIY investor (which most likely will change with $ 687 million to your name), there are some suggestions to get you started.

Diversification should be the key to preserving your capital. It will include an allocation to private equity, stock market, hedge fund, real estate and interest income – similar to the model many trust follows. Within each bucket, a single investment in a company, strategy or fund should not be greater than 3%. There is no need to take outsider. You will be in the "stay rich" game, not the "get rich" game. It is impossible to predict what your actual return would be, but in the long run you can expect to make about 5-6% of your investments annually, depending on the distribution of property distribution, market conditions and advisory fee. It gives you an annual allowance of over $ 30 million (before tax) without eating into the principal. There are many tools available to calculate returns by asset class. Expected return from JP Morgan Asset Management.

Garth Friesen

Cash

Not that you need "rainy day" money with a net worth of nearly $ 700 million, but having a modest 5% allocation (about $ 35 million) of cash or liquid short-term investments, allows you to be peeed with investment opportunities when they occur. It can also come Practical if you find yourself in a situation where you can quickly buy a yacht, jet or a smaller league baseball team. All sorts of surprises happen in life. Expected Gross Return: 2.0%

Private Equity

You can afford to have some illiquid investments when you have hundreds of millions of dollars to go to work. Private equity investments often require a 7-10 year commitment, but returns have historically exceeded public markets. You can catch the "illiquidity principle" associated with linking your money for such a long time. Allotments should include a variety of strategies: traditional buyout funds, timber, private debt, risk capital, etc. Choose about ten funds across different market segments and geographic areas and allocate to them. Expected gross return: 7.25%.

Hedge Fund

Hedge funds have not gone very well in recent years compared to the US stock market. There are many explanations (or apologies) for the weak return, but one reason is that most hedge funds are actually secured! Few hedges have 100% long exposure to the stock market because their investors want a different / uncorrelated return flow. If investors wanted 100% beta for S & P 500, they could only buy a cheap ETF. Hedge fund investors are waiting for the day when a dynamic, secured portfolio surpasses the broad public equity market. Given the volatility to late, such a day may come sooner than later. Diversify your allocation to hedge funds by not adding more than 3% of the weight to a single manager or fund and spreading your money on multiple strategies: Long-term equity, relative value in fixed rate, bad credit, event drive etc. Expected gross return: 4.25%.

Real Estate

The real estate breakdown should not include your newly acquired beachfront or castle in France. The main purpose of the allocation to real estate is for the tax-efficient income and potentially attractive long-term total return. It also happens to give you inflation protection, which is important since inflation can be a primary driver of wealth erosion (look to Venezuela to see the devastating effects of hyperinflation). Investments should include both commercial (office buildings, hotels, warehouses, etc.) and residential properties (multi-family complexes such as apartment complexes). These investments should also be diversified across geographic areas. Some of the best opportunities (and potential returns) are abroad. This is the hardest allocation to do-it-yourself. Hire a company with expertise in the area and be prepared to spend time on due diligence at your castles.

Expected Gross Return: 6%.

Public shares

Unlike hedge funds, private equity funds or real estate, you are likely to invest in public stocks as long as you hold on to the market for a long time and don & # 39; Do not try to select next Google or Amazon. Drilling, cheap index funds or ETFs can give you exposure to the entire market. It should include an allocation to international and US equities in addition to emerging markets. The goal should be to try to get the market back instead of trying to beat the market. Share the share of the precious managers in the hedge fund's portfolio. Expected Gross Return: 6%.

Fixed Income

Yes, your return is low, but you need a stable source of income for your new lifestyle. House employees and auditors' auditors and lawyers need to be paid; You will not be in a situation where you are forced to cash one of your towers to meet your payroll. Interest income also tends to zig when your other risk savings fall. This will not always be the case, but an uncorrelated return on returns is the primary objective of investment diversification and explains why many of the long-term investors maintain at least some allocation to the bond market. You should spread the money around the various interest rates: corporate bonds, municipal bonds, US government bonds, agency bonds and some bonds from higher-yielding emerging markets. Expected gross return: 3.5%.

As mentioned above, the expected mixed annual gross return for this asset allocation is close to 5-6%. The goal, remember, is to be rich and not make investments where you risk losing everything. A 5% return of $ 687 million is $ 37 million a year – sufficient for everyone to live a rock star's lifestyle. Jackpot fever consumes the nation, but as the saying goes, "you must be in it to win it". Despite the odds, the imagination of winning can only be worth the $ 2 ticket price.

The views mentioned above are the author's and not his employers or other partys. These views should not be interpreted as investment, legal or tax advice. When you win the lottery, consult your professional financial advisors before investing your winnings.


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