There are bad things that can happen when you come into a lot of money, and I think it is an indisputable fact that losing your money in a bank failure would be far down a probability ordered list. However, I do have some bank deposit insurance facts.
In the great majority of recent U.S. bank failures, even the high amount depositors got all their money back.
But if still worried, note that many of the banks in Massachusetts have separate deposit insurance to cover amounts in excess of the FDIC protection:
There is no limit with Depositors Insurance Fund insurance, although the covered institutions are medium-sized banks that may have a maximum accepted deposit
Another approach is to check the financial stability of the bank. Here is a web site that rates the financial stability of U.S. banks:
If it was me, and I didn’t have a financial advisor I fully trusted lined up yet, I would park it in something like the Vanguard Treasury Money Market Fund. The underlying securities are as backed by the U.S. government as is the FDIC. And I think Vanguard itself is too big to fail. But that’s an opinion, not a fact.
Slots, bingo, Keno generally don’t have withholding, though they might have to get your SSN for reporting. Poker tournaments are the other weird one. They probably didn’t withhold but probably gave you a W-2G.
That account of the history of IG Farben is not entirely correct. The company did not survive hyperinflation because it didn’t exist during the hyperinflation; it was founded in 1925, two years after the Rentenmark monetary reform stabilised the German currency, by merging essentially the entire German chemical industry into one massive corporation (but the constituent companies had, indeed, survived the inflation).
Also, when IG Farben was split up after the war, this was done by spinning off the reestablished companies from the existing conglomerate, which remained as an empty corporate shell. As late as 2012, that shell continued to exist, with tradeable shares.
I will not be the one to complain about a correct nitpick, far from it, but my underlying statement remains correct: shares are a very good hedge against inflation and even hyperinflation. If you can diversify intelligently, much the better, and if you can even buy foreign shares you will be probably safe. That is what Turkish and Argentinian investors are doing right now and have done the last years. The ones that could afford it, anyway. Russians would like to do the same, but sanctions don’t allow them to invest as they presumably would like, and many assets they had already before the sanctions bit are now frozen. That is one risk you have to consider when you invest abroad and your country becomes a pariah.
The obvious strategy in any situation is to diversify - and any financial advisor will tell you that. After all, if you have $900M, you could lose $1M a year for the rest of your life and not even notice. And if there is a catastrophe like the Weimar inflation, so what if you have to live the rest of your life on the $25M equivalent that was invested in the safest places? You’re probably better off than those who couldn’t afford their mortgages. And a diversified portfolio may not pay as high as putting it all on red or buying AI stocks, but with $900M so what?
(Old joke: accountant says to old multi-millionaire: “Your son lost $1M last year gambling… how long can you let him go on like that??” He thinks a while and replies “About 198 years.”)
In Argentina, rich people probably invested in shares, preferentially out of the country.
Upper Middle Class people bought dollars (and so did everyone who could, thus the current Cult of the Greenback in Argetina).
I’ll share my parents’, Middle-Middle-Class people, strategy just in case someone needs it in the future:
Receive wages
Immediately go to a gigantic supermarket and buy everything you will need for the rest of the month.
Getting back to the OP
I know people have investment accounts that they can write checks on … money market accounts? Anyways, would one of those be a good account for my winnings if I plan on paying cash for a couple of houses, cars, a private island, & a really big meatball sandwich?
If you have one of those accounts, use the linked debit card. Who writes cheques any more? Make sure you do not run into transaction limits, if any, though. Perhaps you might want to have a current account for when you send your personal assistant to the store to get a pack of chewing gum? The meatball sandwich you can pay for with your Amex Centurion Card.
No reason not to have several accounts. My instincts tell me that (based on the way banks operate) the more liquid the funds, the less lucrative the investment portion.
Either have an account where you leave a million (or a few) in and use that for day to day living expenses, or be like the typical big business (and I assume a lot of rich persons) and have a line of credit and transfer from investment account to cover the balance every month. That’s what I do, I call it a “credit card”. (and actually, with $900M, your accountant will do it for you each month)
After all, what will you day-to-day expenses be? If your expenses (over and above regular payments like rental on the jet) will exceed, say, $1M, have that in the bank or LoC limit. To spend $1M a year, you have to spend $2739.73 every day without fail. That’s some serious level of happy meals.
IIRC one of the features of some Amex cards was that they had no limits.
I did buy some MegaMillions chances yesterday. And did not win. I blame rampant favoritism on the part of the lottery balls.
It would be sort of fun if the Powerball did get hit tonight. Both lotteries paying out good-sized jackpots the same week would certainly be good for their buzz.
Human nature being what it is, if PB does hit tonight I suspect the lucky winner will feel a genuine pang of regret their MM ticket didn’t hit instead. But not for long.
It’s the most common outcome. Around 65%. From the link below, odds of powerball only is 1 in 38.3. The odds of powerball +1 is 1 in 92. The rest is background noise. Powerball - Wikipedia
I won a week at a resort in 1997. It came with affair. However, the place was 60 miles from my house, and so I drove. I had to pay taxes on the airfare anyway. (Jeopardy refused to reduce the prize amount.)
I live in a David Bromberg song (Suffer to Sing the Blues, to be precise.)
