Where do I put all that money? Banks are only insured up to 100k. Are there special, insured accounts which accomodate ridiculous sums of money? Say I won a million dollars, do I open up ten different checking accounts but with different variations of my name like “John Doe”, “Johnny Doe”, “John Q. Doe” and so forth?
It’s a snowball’s chance in hell but it’s good to be prepared?
No, you find a good financial advisor to invest the money in investments from stocks, to, bonds to mutual funds all the way from conservative to aggressive. That way your money will grow. A million dollars isn’t enough to live for a lifetime provided you are reasonably young and you need it to grow. Just ask my uncle who won 3.5 million 20 years ago, just received the last payment, and is literally going to have to go on welfare because he doesn’t have a penny saved and no job.
Well, you could buy a lot of IBM Preferred. Blue-chip stocks are a pretty safe place to put and keep your dough. If you have kids, you should consider setting up trusts and whatnot. In any case, spend one-tenth of one percent of your winnings on some professional financial advice.
I am not a lawyer, accountant, investment advisor, etc.
First, put some of that money into hiring a lawyer and maybe an accountant. Second, clear any debts you may have. Third, set up trusts or the like for family members (it’s the nice thing to do, after all). Fourth, invest most of the rest, keeping some in a savings account and however much you want in a checking account. Sure, there’s the possibliity that the invested money will lose some value, but you diversify out. Get a mix of short and long term CDs and treasury bonds. You can live off the interest this will get you without touching the principal, assuming you make a large enough investment. Fund your IRA to the full amount. That’ll earn more money you can pull out tax-free later (assuming you’ve got a Roth.) Buy stocks, index funds, bond funds, bonds. Heck, try starting a business if you’re interested. In any case, make your money work for you. Sticking it into a savings account with an interest rate lower than the inflation rate is not the way to go.
The first thing you do is pay the Chicago Reader a hunk of change to let the SDMB go back to free. After that, presents for every poster with more than, say, 3000 posts. Then invest the rest. 
Give it away as fast as you can, before your friends turn on you and conspire with your family to have to killed. That or they sure your pants off.
True, FDIC insurance is only for $100, 000 max per account at each bank but there is many FDIC banks in the USA… each insured by FDIC for $100,000 per account.
An investment firm can purchase CD’s from banks from all over the country to maintain insured accounts. Easy to maintain a list so one doesn’t purchase but one CD from the same bank. Treasury bonds are just as secure as CD’s at banks and there is no limit on them. Insured savings is great but one should invest some to make more money than insured accounts pay. An investment firm can help one decide where to make investments like mutual funds or stocks.
Asterion cover it very well in his post.
If you have that kind of coin, you need an investment firm, like Fidelity or Dreyfus. They handle institutional investors with accounts in the billions, I think they might be able to handle your measly sum.
Since you’re looking for an informed opinion, rather than a factual answer, I’ve moved this from GQ to IMHO.
samclem GQ moderator
About the bank accounts.
You can open several accounts and you don’t have to vary your name. The important thing is the account number. As long as those are different, each account is covered by FDIC,
You would probably have a checking and a savings account and a bunch of free toasters.
Maybe even a Swiss toaster.
I think it's funny.
Most people blow the dough in 5yrs.
Yet I keep buying Tickets.BZZZZT! Wrong answer.
Your FDIC coverage has nothing to do with account numbers and everything to do with account ownership. Some examples:
- Mr. X has one single ownership account at a covered institution - that account is covered up to $100K.
- Mr. X has 2 or more single ownership accounts at the same covered institution - the funds in those accounts are covered up to $100K in the aggregate. IOW, add all the account balances together and anything over $100K is not insured.
- Mr. Y and Mrs. Y have one joint account at a covered institution - that account is covered up to $200K. Since both people are 100% owners of the account, both get full FDIC coverage.
It gets more complicated with different types of account ownership. With proper account structuring, it is entirely possible that the entire million dollars could be deposited in one bank and still be fully covered.
See http://www.fdic.gov/deposit/deposits/insuringdeposits/index.html for more information.
Treasury bonds are not just as secure as CD’s, which is why they pay a higher interest rate.
The face value and the interest payments of a Treasury bond is backed by the full faith and credit of the government of the United States of America. However, an investor should bear in mind that these are long-term investments.
If you deposit $1,000,000 in a 6 month CD paying 2% annually, you will have $1,010,000 at the end of the term (not exactly, the math is a little more complicated, but it is good enough for illustrative purposes).
If you invest $1,000,000 in a 10 year Treasury bond paying 5% annually at par, in 6 months you will receive a payment of $25,000. However, if you were to try to cash in the bond, you could receive less than you paid - the value of the bond will fluctuate with market conditions.
Let’s say you made both of these investments, and during that 6 months, Alan Greenspan did some bad LSD and average bank interest rates are now 8%. So at the end of the first 6 months, you can reinvest your CD at 8% annually, and receive $1,040,000 (you took out the $10,000 interest and bought a big screen TV). Meanwhile, the bond still only pays you $25,000, and if you went to sell, you would definitely receive significantly less than your $1,000,000 investments. Bond prices have an inverse relation to interest rates; rates go up, price goes down - always.
Most portfolios can benefit by the addition of “risk-free” assets (generally considered to be short-term, or less than 1 year to maturity, government notes). I’m not saying Treasury bonds are a bad investment for anyone. All bonds have the risks I outlined above, and only US Gov notes have virtually no failure-to-pay risk. But there is always a risk/return tradeoff - anything offering a higher return has a higher risk, even if it is marginal.
Gee whiz, I could never figure out how people blow that much dough in so little time. You’d think a situation like Brewster’s Millions was nigh impossible but it appears to be quite feasible given the right personality.
I only invest in the idiot tax on an infrequent basis but if I do hit, I’m moving to a renovated missle silo out in Wyoming and avoid the rest of the world until folks forget I ended up getting really lucky at something stupid. Meanwhile I’ll continue infrequent lottery tickets and get some of that euphoria.
I didn’t have anything to do the other day, so I came up with a lottery analogy.
The lottery tickets they print in Florida are about 3 inches wide. If you printed all the possible combinations for the numbers you would have about 22 million tickets. If you laid those tickets out lengthwise, one after the other, they would cover about 1042 miles. That is, approximately the driving distance from Chicago, IL. to Jacksonville, FL.
Wow, I always thought each account was covered.
He didn’t save anything or invest in anything or even buy anything that was a long term asset? What a maroon! Welfare really shouldn’t cover people for stuff like that. Is he close to Social Security retirement age? Can he at least get a job flipping burgers or something? Or better yet, as a clerk at a store that sells lottery tickets.