In November 2022, Californian Edwin Castro stopped for petrol at Joe’s Service Centre in Altadena and bought a PowerBall ticket that won him $2.04 billion (roughly R37 billion), the biggest lottery jackpot in history.
His story is a masterclass in what to do when life hands you a once-in-a-lifetime windfall.
What the Powerball winner paid in tax
Here is where it gets interesting.
Castro chose the lump sum payout of just under $1 billion (around R16.6 billion) before taxes.
Then the US federal government took its cut.
After paying roughly $370 million (about R6.1 billion) in federal taxes, Castro walked away with approximately $628.5 million in cash. That’s around R10.4 billion.
Still not bad for a trip to the garage.
Worth noting: California is one of only two US states that does not tax lottery winnings. So at least he caught a break there.
What he bought first
Castro celebrated his win by purchasing a $25.5 million (about R423 million) Hollywood Hills mansion.
The newly constructed three-storey, 13 000 square foot property features a home theatre, fitness studio, wine cellar and a glass-enclosed garage with a rotating floor.
Not a bad upgrade from a petrol station car park.
He also acquired a $47 million (around R780 million) Bel Air compound and a collection of vintage Porsches.
Smarter than your average lottery winner
Most lottery winners blow their winnings within a few years. Castro is doing things differently. He assembled a team of financial and legal advisors to help him manage his money and protect his privacy.
About 60% of his money sits in safe investments while 40% goes toward growth opportunities. He has also started a foundation to support educational programmes in Southern California.
What about SA lottery winners?
South Africans back home have a distinct advantage over their American counterparts.
Lottery winnings in South Africa are completely tax-free. Any amount won is considered capital in nature and exempt from Income Tax, with a special exemption from Capital Gains Tax as well.
So if a South African pulled off a R10 billion win, they would keep every cent of it.
The odds, just for fun
Castro’s winning odds were roughly 1 in 292 million. You are more likely to be struck by lightning. Twice. But then again, someone has to win.
So the next time you are filling up the car, maybe grab a ticket. You never know.
What’s the first thing you’d buy if you hit the PowerBall jackpot BIG-time?
Let us know by clicking on the comment banner below …
Read the full Realtor.com report on Edwin Castro’s net worth here.
