Let’s say some person in your vicinity suddenly came upon a fortune. Maybe not a world-beating fortune… let’s say it is exactly $1 million.
The person is suddenly rich. Their experience is going to be different. What moral advice would you lend them, given you care and are behaving in good faith?
Divide your money into two categories: money you’re willing to spend or give away (fun money) and money you’re going to save or invest or pay taxes with (working money). Don’t let anyone other than professionals handle the working money. Any financial transactions involving family or friends should be coming out of the pile you’ve mentally categorized as fun money.
“Get an accountant. NOW. You might have to start filing quarterly, depending on whether your income source involved withholding, and you do NOT want to wind up paying penalties and interest just because you didn’t know better.”
You aren’t rich. You probably don’t have enough to retire on. You owe an amazing amount in taxes. Get a reputable investment adviser.
remember your friends.
Give a good-sized amount to charities that help the third-world poor. If I were in that situation, I’d give away at least half the money. Be sure to investigate the charities and make sure to choose good ones.
A million bucks ain’t what it used to be, no? This made me laugh. “A million bucks? Don’t quit your day job!” 
I think if a person lived modestly they could retire on a million (after tax) dollars. But yeah, I think that would be hard advice for a lot of people to take.
Don’t go nuts. A million bucks is more likely to make someone nouveau middle class. You can go from renting an apartment to owning a house, without bothering with a mortgage. You can pay for your kids’ education (and your own, if applicable). Those are great things if you couldn’t afford them before, and I’d make them a priority. After those expenses (and taxes), not too much will be left.
Exactly, although in many cases the smarter move, depending on your credit, might be to go ahead and get that mortgage and invest your money. That’s assuming you can invest that $200k or so for more over the life of the mortgage than you pay out in interest on the mortgate. In other words it’s stupid to pay cash if you can get a 5% mortgage and invest at 8%- you’ll net 3% on the same money over the life of the mortgage, and end up with the same house at the end of the term.
I’ll also echo the professional financial advisor suggestion, and to firmly understand that you are NOT rich, and that this windfall isn’t enough to quit your job or anything like that.
It’s a huge buffer against financial instability and a potential gigantic nest-egg for retirement, but hardly a game-changer in the sense that you don’t have to work anymore (unless you were 65 and have no retirement savings, in which case that’s exactly what it is).
What Oakminster said. Or, to paraphrase Chris Rock, you might have some money, but you aren’t really rich, and you sure as hell ain’t wealthy.
I’d recommend my financial advisor. My wife works for a financial advisor company that is very well respected (and is probably the only company you’ve heard of that didn’t get involved in all the somewhat recent bruhaha). Between us, we’re very aware and astute about whether our advisor is working for us, or for himself. Given his track record, I trust him to have my best interests in mind slightly more than I trust myself.
Note that this is very, very local.
First ill tell them 1 mill is nothing. After taxes thats 500k, 500k is 20 years at a minimum wage job.
Second, I’d tell them to invest it and try to get a 4% guaranteed return. At 500k, that would be 20k a year, not enough to retire, but it will give you more freedom. If you can work full time and build it up to 800k, 32k/year will allow retirement.
Of vital importance to me is that they understand 1 mill is really not that much. When i worked in pizza, 1 mill represented about 20 weeks of receipts. 1 mill won’t buy you a house in many neighborhoods. In an average savings account or Cd, you will only earn 10k a year.
Dammit man, don’t leave us wondering. 
Or at least, give us a hint.
Don’t let anyone tell you that it’s better to get a mortgage and bet on being able to invest at a higher rate than your mortgage interest. You are not rich, and this amount of money will not allow you to stop working. You can, however, buy yourself a measure of security. Use the money to lower monthly bills and provide for the basics.
Well, nobody in their right mind would just plant 1 million in a savings account or series of CDs. That’s like idiot-investing.
Hence the advice to find professional help for investments- you’ll probably end up putting it in some combination of stocks, bonds, mutual funds, etc…
The investment advice overlaps what I have in mind here, but I was thinking more along the lines of how a big change in wealth can result in a big change in the person, often for the worse. You’ve heard the stories of the lotto winners who end up dead or miserable, or the pro athletes who end up in jail or bankrupt. MC Hammer and Mike Tyson kind of stories- ESPN has a whole tv show devoted to the phenomenon.
This is probably another example of me groping through the darkness of ignorance toward answers where I won’t figure out exactly how to frame the question until after the last post in the thread. $1 million isn’t the kind of money in play in the examples above. How not to be foolish and lose everything is certainly part of the question. But I’m wondering what it is about a big change in wealth that makes people go kind of bad and wreck more than just their finances.
Maybe it isn’t exactly a question of morals. And my laughing aside, “don’t quit your day job” does sound like solid advice, advice that all by itself might prevent a suddenly moneyed person from going off the rails. But what is it about a lot of money that makes some people go crazy, and what advice would protect a person from that outcome?
Really depends on how the windfall happened but even if it was straight up income, it would be more like $600, 000. More left over if it could be taxed as a Capital gain. If it was a gift, he wouldn’t pay any tax.
I think the OP was going for that the guy had $1 000 000. You know, technically he was suddenly a millionaire. Also, he clearly said “moral” advice, for Pete’s sake. Telling him to find someone to give him financial advice is at least two steps away from the OP’s question.
Personally, I wouldn’t give him any different moral advice other than “don’t turn into an asshole”. If it was $100 000 000 I might say “remember you are mortal”. 
I like to think I could get around that if I had $100 M.
To answer the OP:
Create and live within a budget. I’m in a situation where on a semi-regular basis I receive substantial money in addition to my regular income. While I had some good discipline regarding the regular income, having sudden influxes of cash lead to some very poor spending decisions. If you have a budget, with limitations on the amount you can spend, you are forced to make choices, and will be less likely to go for the bad spur-of-the-moment expenses that can lead to bad behavior.
Make sure you retain contact with the friends and family who stood by you when you didn’t have a lot of money. Often the people who become newly rich are surrounded by new friends (and newly close family), who only want to use them. This can lead to disillusionment and abandoning of your values. See Dave Chappelle for a prime example of someone who found that having extra money destroyed his social network.
Aspire to live below your means and be proud of it. People who come into money suddenly tend to aspire to a lifestyle that they can’t afford, and to want to use their money to show off. Using money to make yourself feel superior or look superior to others is morally bankrupt. Don’t be afraid to let people know that you have other values that are more important to you.
Don’t lend money to friends and family. Either give it outright, or don’t.
Oprah says that 