What should I REALLY do with a huge load of money? (Lotto, or otherwise.)

In My Humble Opinion
1

There have been more than a few threads about the lavish, decadent things we’d all do if we had an obscene amount of cash. But this time, I’m going to ask what PRACTICAL things one should do with such money.

For example…I buy a lotto ticket at the Supermarket, and boom, I win the lotto. I take the “lump sum,” giving me $500,000,000. (sic)

What do I do next? Take my check down to the bank, and pop it in my regular savings account? I’m no financial wiz, so I’ll probably want to hire some sort of financial adviser or manager…but who would I go to? The yellow pages? Call Bill Gates up, and ask him what I should do?

I beg my fellow dopers to hurry and reply, so I…aw, who am I kidding? Answer at your leisure. But I will give 1% of my lotto earnings* over to the person who gives me the most helpful answer.
*Over $1 Million. Not necessarily a binding agreement. You’ll have to catch me first. :smiley:

2

Although, you’ve probably heard this a million times, the best thing to do would be to do nothing for about 6 months. Just pop the cash in your regular saving account and wait.

Think it over. Weigh up your longterm financial needs, with your shorterm spending impulses and figure out a ratio.

Then you may want to look at the deposit interest rates - notoriously low at the moment, both in Europe and the US, and they look to be set to stay that way for a good while to come.

If you are in Europe, with the low interest rates that currently exist, I would suggest investing most in property. The low interest rates mean that there is a boyant market for houses, and that if you dis just leave it in the bank, you’d be making SFA.

But then you have to consider what would happen if the interest rates rise - people who are mortgaged to the hilt may not be able to make their mortgage repayments, and may have to sell their properties. This will cause a glut of houses on the market. Couple this with the fact that mortgage finance would then be more expensive (if the interest rates have gone up), less people will be inclined to buy. What does this leave you with ? A shitty housing market.

But that shouldn’t worry Mr. 500 Million too much - your not going to have to sell your properties, since you won’t have a mortgage, and since more people will be unable to afford to buy, they will have to rent. Which opens up the market for you to rent out the properties that you have bought.

So you’d be sitting pretty, with a nice monthly income from the rents.

Just my .02. YMMV, but that is what I would do.

Also, don’t forget to quit your job ! :slight_smile:

3

Forget about winning $500,000,000 in a lump sum. For you to win that amount, the advertised jackpot in your lottery would have to be around $1.5 billion. The last I heard, the highest advertised lottery jackpot in the US (as opposed to the actual lump sum payout) was around $410 million.

But enough about that.

Yes, you can find a financial advisor in the yellow pages. Look under “Financial Planning Consultants & Services.” I’m looking at the Springfield, Illinois (Population: 110,000 + some change) yellow pages right now. I see 27 listings. My award for best name goes to:

Kula Financial Services
431 East Adams
Springfield, IL 62702
(217) 544-6080

The word “Kula” seems so totally out of place in central Illinois. Maybe in Hawaii, but not here.

There’s a financial advice guy named Clark Howard with a radio show and a website. http://www.clarkhoward.com. His advice is to take your lump sum and invest it well (as opposed to taking the annuity payouts). He also says to set aside ten percent of your jackpot, and not a dime more, and use it for all of your “frivolous” things. Buy that Porsche 911, that 700hp speedboat, etc. But when your 10% runs out, stop.

You may also be thinking, Wow! Now I can buy that $25,000,000 mansion in Vero Beach. Keep in mind that you’ll have to pay property taxes on that, and those could run into the tens of thousands per month. And then climate control- I heard that the high-end ($10,000,000 & above) beachfront Florida mansions have air conditioning bills that run about $5,000 per month.

4

Moved to IMHO.

-xash
General Questions Moderator

5

A recent article in the Sunday Washington Post, titled What Price D.C.?, has a very thorough discussion of this question.

6

You can bypass the registration by using the first hit of this Google search.

7

DO indulge in some runaway consumerism. No point in having it if you don’t enjoy it.

The turn is over to a qualified broker with orders to maintain a diversified portfolio. Something that might not grow crazy-mad over time but you don’t need it to grow, do you? Not if it’s already in the 100s of millions, you don’t.

Begin contributing to various worthy causes and make sure they mention your name.

Choose a political party you favor and begin giving big chunks to that party and specific candidates inside that party.

Later…run for office.

Take over world.

PROFIT!

8

If I learned anything in high school its that: If you win money the first thing you need to do is PAY OFF ALL DEBTS.