At the original time of writing1 there was a Powerball
jackpot in the US of a record $1.9 billion dollars. I don’t play the
lottery as the probability of winning is too low, with this one for
example apparently having a
chance in winning. The odds of somebody winning is not much
better either, as each of the numbers selected is not unique. You would
probably be better investing that money into yourself.
That said, what would you do with $1.9 billion dollars?
Futurama’s ‘What If’ machine
The first problem to deal with is actually getting the money. In most
Countries you lose about a half straight up due to tax. We’re
essentially left with just $1 billion.
The next problem is, do we get it one cash sum, or multiple sums?
Given the current rate of inflation, in 30 annual payments this money
will be worth a lot less than it is currently worth. It may actually be
worth taking a little less now but all in one go. It’s also entirely
possible that the lottery itself is disbanded under some new law
introduced and in 30 years time they are not even there to pay you -
“tough luck buck”. As things currently stand, I would probably
take the lump sum. This does now mean you get approximately $500 million
dollars.
Now you still have the inflation problem, but you are empowered to
deal with it. Where do you put this money to stop it devaluing over
time? I have a few ideas on how to diversify this amount of cash:
Property - Land and property tend to never devalue, they
are fundamentally limited resources. In the UK for example as long as
the immigration policy remains relaxed, there will be a housing crisis
forever more. For land for example, I would pick locations that are
rapidly growing and select land just outside those areas, betting on the
fact that in the future they will likely want to develop there. For
property, I would invest in not brand new, not really old, but well
established properties (10+ years). The reason for this is that brand
new homes devalue but tend to settle at their real price once they start
to get a little older. You then get an idea of the culture for the local
area, which drives the price.
Precious metals - These tend to be relatively stable, with
metals such as gold and copper forever being important in infrastructure
and manufacturing. They will always be safe bets as we know all the
fundamental elements and they are the best at their particular
applications. I would not invest in artificial markets such as
diamonds.
Historic items - Some historic items will forever be
valuable. Maybe not most art, but things of significance to the
formation of culture. These are things that are hard to quantify and
predict, so are a little more risky. I suspect we will see items from
WWI and WWII become rarer and rarer, and their significance in European
culture will become more and more profound as time goes on. Another
historic item to be will be classic cars, especially as we move towards
electric vehicles. There is something fundamental to a human hearing a
large engine firing, hearing the explosions and roar power in your
chest. Future generations will be fascinated by this, as all humans are
by fire.
US Powerball lottery
Now I think I know where to store the majority of my money, what
would I look to spend in the short-term? I think I would get the
following:
Each family member a home. They can choose to live in it,
rent it or sell it. But ultimately it would offer them financial
freedom. Assuming up to 50 homes, that is $50 million. I would consider
this obligation complete.
A home built from scratch. I want a home built from scratch
designed to survive for over 100 years. I want it to be off the grid,
bomb proof and secure, have secret compartments and an underground lab.
I would probably pay up to $5 million for this to be built. This would
also include a car, etc.
Fund a small research lab. I would fund a small research
lab to carry out experiments and ideas that I have. These would be
‘hacker’ types as our goal would be to just invent stuff, maybe create
some spin-off companies. Let’s say we invest $5 million to see where
this goes, at $500k per year over 10 years.
This would be $500 million minus $20 million over 10 years, bringing
the total to $480 million.
I would give myself a ‘wage’ of $500k a year to spend on life. If I
have 60 years left in me, this is $30 million, bringing us to $450
million.
The rest of the money would be invested to protect against inflation,
where the intention would be to give my children and family comfortable
lives.
Coffee Space 
