Financial Planners. I just won the Power Ball.

Financial Planners. I just won the Power Ball. Where do I park my money in a secured investment?

Send me a check, I’ll handle the rest.

One word:* Plastics…*

The first thing you want to do is make sure everything you do is compliant with federal regulations. Penalties for non-compliance on that kind of money will seem very attractive to federal bean-counting investigators, who will make it their life work to find you. Audits will become the central feature of your life.

I know a guy in Lagos. His name is Ayo Adeniji and he probably already has your e-mail address. :eek:

Diversify - Don’t put all your eggs in one basket.

Mix of stocks, bonds (municipal and corporate), real estate, varied investment sectors, foreign and U.S.

For example: Energy, medical, industrial, retail, etc.

Look at the investments of large endowment or non-profit funds as an example.

I won once. I used the money to buy 2 more tickets.

Thanks Me_Billy. Never thought of that.

What does “secured investment” mean to you?

The ironic thing is that I am a planner. And I’d be violating regulations to answer the question.

I believe one interpretation of the question is, until the winner figures out how much to use to give to charity, endow scholarships, pay off all family debt, fund a business start up, put in a medical expenses account, buy an island, build a custom yatch, and set aside for hookers and blow… where does he put that money so that it’s safest from loss.

I don’t doubt you, but I’m curious. Why is that? Why can’t a CFP answer a general question about what to do with a windfall?

Honestly, I suspect that the money would safe for a few weeks or months if deposited in an account at one of the really big banks (Citibank, Bank of America, Wells Fargo or Chase). Yes, you’re going to exceed the FDIC insurance limits, but even in the 2008 crisis there was no chance any of those banks were going to fail.

My firm is extremely compliance-centric and somewhat paranoid.

You’ve seen those times on the board where our resident lawyers say “I am a lawyer but I am not your lawyer…” and so forth. The idea there is not to create an attorney-client relationship wherein the advice provided could be acted upon and a potential liability created. The same counts for us but that sort of phrasing is specifically discounted by our compliance department.

Therefore, were I to provide specific advice on actions to take on a message board - this one, for example - and someone acted upon them and they went south (if I recommended a specific investment, for example, and it tanked) both I and my firm could be held liable to compensate the investor for their loss. Not a happy event and I would certainly lose my job. Also not a happy event.

The levels to which this goes include the fact that all of my posts here can be reviewed by compliance. I know for a fact that all of my Facebook posts are reviewed each year as I’ve had a couple of ‘what did you mean by…’ discussions at my annual compliance review. That’s why my FB tends to be pix of my kids and quotes from Rush lyrics. It’s easier that way.

The amount of money in this Powerball is hard to screw up investment wise as long as you stick to some sort of mainstream investing plan - like 65% in mainstream mutual funds (like an S&P Index fund), 30% in bonds and 5% in an interest bearing cash account so you can spend it.

You’ll still end up with millions every year in gains and dividends to spend while leaving some gains and dividends in to cover inflation. Which should be sufficient if you don’t suddenly decide you need to buy your own private island or give money away like crazy.

(Warren Buffett’s will has his wife getting what remains of his money after he’s done giving it away in a Vanguard Index fund - he basically said the same thing - given the quantity of dollars, and her personality, she’ll be just fine.)

My understanding is that the lottery payments come out of an interest-earning fund to begin with. Could you just leave what you don’t draw in the fund to continue to collect interest, or is that forbidden for some reason?

You can take it as an annuity. Which is what you are talking about.

You can generally manage better yourself or with a CFP, annuity payouts are by their nature conservative - i.e. they don’t want much risk, so you don’t get huge rewards.

But again, this Powerball is so large that if a single winner were to win it, its going to be hard to screw up investment choices as long as they are mainstream - an annuity will still have you set for life. Spending choices are a different matter entirely, and it is completely possible to blow through hundreds of millions of dollars being an idiot.

Speaking of which, upon reflection I have come up with three rules for lottery winners:

  1. Don’t gamble.
    Bill Gates and Warren Buffet themselves could go broke if they gambled. Gambling addicts just keep betting higher and higher stakes no matter how much money they have. Or think of it this way: if you’ve won the lottery you’ve used up a lifetime a good luck; it’ll never get better than that.

  2. Beware of gold-diggers.
    Three or four divorces which each cost you half can eat into even the largest fortune. And be careful even with one woman, because there is no limit- absolutely none at all- to how much can be spent on fashion and style. Jacqueline Kennedy Onassis spent twenty-five million dollars- 1965 dollars- in the first year of her remarriage.

  3. Don’t trust your friends with your money.
    Your friends are by definition the people you like and trust. Surely you can invest a little in their ideas? NO. You’ve heard the phrase “for love or money”? Money is the opposite of love; it’s how you deal with people you don’t know personally and never can. Trust your money to the coldest, most flint-hearted bastard you can find, the kind of person who evicts widows and orphans into the snow.

Gold diggers can be either sex, and especially if you are a woman of a certain age, women with cash become targets.

Well, if you belive that inflation is coming, buy gold and other precious metals.