Episodes / Episode 01
You Won $1 Billion. Here's Why You're Still Broke.
What a $1 billion lottery ticket actually pays, the three hidden bills that eat it, and why the famous "70% of winners go broke" stat is itself broke.
17,000 rent-yearsChapters
- Advertised
- $1,000,000,000
- Cash option
- $450,000,000
- After taxes
- $260,000,000
- Cousin tax
- up to $50M (reported)
- House that eats
- $600K / yr
- Business idea
- undefined
- Rent-years
- 17,000
Total: More than Ray. Less than the sign.
Sources
Numbers in the episode are estimates built from these. If you spot a mistake, tell Ray: hello@brokeray.com.
- NEFE statement on the "70% of lottery winners go bankrupt" statistic (January 2018)
- Hankins, Hoekstra & Skiba, "The Ticket to Easy Street? The Financial Consequences of Winning the Lottery", Review of Economics and Statistics 93(3), 2011
- Cesarini, Lindqvist, Östling & Wallace, "Wealth, Health, and Child Development: Evidence from Administrative Data on Swedish Lottery Players", Quarterly Journal of Economics 131(2), 2016
- Cesarini, Lindqvist, Notowidigdo & Östling, "The Effect of Wealth on Individual and Household Labor Supply: Evidence from Swedish Lotteries", NBER Working Paper 21762
- Powerball odds and annuity rules
- IRS: gift tax FAQ (2026 annual exclusion $19,000, lifetime exemption $15M)
- IRS: 24% federal withholding on lottery prizes; top federal rate 37%
- Jackpot analyses: cash option typically 43–50% of the advertised annuity
- Private jet charter rates: industry estimates
Shorts from this episode
Not financial advice. Narration: synthetic voice (ElevenLabs). Script and animation made by hand.