# Where do you keep a billion dollars? **URL:** \ **Category:** Factual Questions\ **Created:** [November 29, 2010, 2:06pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278 "2010-11-29T14:06:20Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Revtim](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/revtim/32/1042_2.png) [@Revtim](https://boards.straightdope.com/u/Revtim)\ **Post date:** [November 29, 2010, 2:06pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/1 "2010-11-29T14:06:20Z")
You make a company/website to help people find albino goats, Google likes it, and buys [albinogoatfinder.com](http://albinogoatfinder.com) from you for a billion dollars. OK, they probably give it to you in stock, but you decide to cash it out. What is the best financial option to store this money, that is as safe or safer than a savings account? You don’t care about growing the money, you feel you probably can manage to squeak by on just the initial billion. NEED ANSWER FAST! (yeah, I wish…) ---
**Author:** ![Schnitte](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/schnitte/32/9033_2.png) [@Schnitte](https://boards.straightdope.com/u/Schnitte)\ **Post date:** [November 29, 2010, 2:11pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/2 "2010-11-29T14:11:34Z")
I don’t get the question. If the crucial criterion is simply that storing the money needs to be “as safe or safer than a savings account”, then why not simply put in in a savings account? ---
**Author:** ![Finagle](https://avatars.discourse-cdn.com/v4/letter/f/b19c9b/32.png) [@Finagle](https://boards.straightdope.com/u/Finagle)\ **Post date:** [November 29, 2010, 2:14pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/3 "2010-11-29T14:14:28Z")
I think the traditional answer is that you invest in bonds, possibly US Treasury bonds, and live off the interest. Of course, right now, interest rates are pretty darn low, but if you go for a long enough term, it looks like you can still clear 4%. 4% of a billion would be enough to struggle by on, I think. Of course, you might worry about the US defaulting on its debt, but if that happens, you probably have greater worries than losing your billion. But you can always diversify to other sorts of bonds as well. ---
**Author:** ![Jack\_Batty](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jack_batty/32/3201_2.png) [@Jack\_Batty](https://boards.straightdope.com/u/Jack_Batty)\ **Post date:** [November 29, 2010, 2:17pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/4 "2010-11-29T14:17:16Z")
In the root cellar down near the cement pond? ---
**Author:** ![UDS](https://avatars.discourse-cdn.com/v4/letter/u/ecae2f/32.png) [@UDS](https://boards.straightdope.com/u/UDS)\ **Post date:** [November 29, 2010, 2:40pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/5 "2010-11-29T14:40:42Z")
If you want to preserve long-term value, invest in real assets - property and/or equities. These can be volatile - especially equities - but with a billion dollars you can stand a bit of volatility. And you’ll have quite enough to diversify between different companies, markets, countries, sectors . . . In nominal cash terms, your best investment is of course cash. Keep the money in large bills in a shoe-box under the bed or, if you haven’t got a big enough shoebox, deposit it in banks (spreading your money between different banks to minimise exposure to the risk of default). But cash has a lousy return; if you want respectable long-term growth and can stand a bit of volatility, real assets are your best bet. ---
**Author:** ![njtt](https://avatars.discourse-cdn.com/v4/letter/n/ecd19e/32.png) [@njtt](https://boards.straightdope.com/u/njtt)\ **Post date:** [November 29, 2010, 3:02pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/6 "2010-11-29T15:02:21Z")
I’ll hold onto it for you.🆒 ---
**Author:** ![Revtim](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/revtim/32/1042_2.png) [@Revtim](https://boards.straightdope.com/u/Revtim)\ **Post date:** [November 29, 2010, 3:09pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/7 "2010-11-29T15:09:46Z")
> [@Schnitte](#): > > I don’t get the question. If the crucial criterion is simply that storing the money needs to be “as safe or safer than a savings account”, then why not simply put in in a savings account? The FDIC only insures up to $100000, so if the back fails that’s all you get back. (I should have mentioned this in the OP, sorry) You could spread it out over different banks, but that’s 10,000 banks you’d have to use. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [November 29, 2010, 3:09pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/8 "2010-11-29T15:09:51Z")
With that amount of money, there are tax issues (minimizing the amount of tax owed) and estate planning issues (to avoid the sort of mess that Howard Hughes left). So one could talk to various “wealth management” firms that would help you manage the money and structure the inheritance. Say, for instance, that you want to leave money to your grandchildren but not to your children, or you want them to achieve something prior to inheriting, so that they don’t turn out to be worthless slugs. Or if you want to follow Warren Buffett’s advice and use the money to accomplish some public good. ---
**Author:** ![LouisB](https://avatars.discourse-cdn.com/v4/letter/l/dfb087/32.png) [@LouisB](https://boards.straightdope.com/u/LouisB)\ **Post date:** [November 29, 2010, 3:10pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/9 "2010-11-29T15:10:54Z")
Don’t trust that other guy; I’ll take care of it for you. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [November 29, 2010, 3:25pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/10 "2010-11-29T15:25:48Z")
> [@Dewey\_Finn](#): > > With that amount of money, there are tax issues That really depends on what you do with it. The income tax on a billion dollars worth of T-bill or mutual fund interest isn’t any harder to figure out than on a sawbuck. But if you’re invested in a wide variety of businesses and holding companies, then it gets more complicated. Estate planning is of course an entirely separate issue. ---
**Author:** ![KneadToKnow](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kneadtoknow/32/3999_2.png) [@KneadToKnow](https://boards.straightdope.com/u/KneadToKnow)\ **Post date:** [November 29, 2010, 3:25pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/11 "2010-11-29T15:25:57Z")
I keep mine in my … Whoa, I see what you almost did there! ---
**Author:** ![joebuck20](https://avatars.discourse-cdn.com/v4/letter/j/74df32/32.png) [@joebuck20](https://boards.straightdope.com/u/joebuck20)\ **Post date:** [November 29, 2010, 3:26pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/12 "2010-11-29T15:26:35Z")
> [@Revtim](#): > > The FDIC only insures up to $100000, so if the back fails that’s all you get back. (I should have mentioned this in the OP, sorry) > > You could spread it out over different banks, but that’s 10,000 banks you’d have to use. I could be wrong, but I thought that was raised to $250K after the 2008 bailouts. In that case you’d only need 4,000 banks. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [November 29, 2010, 3:28pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/13 "2010-11-29T15:28:54Z")
> [@friedo](#): > > That really depends on what you do with it. The income tax on a billion dollars worth of T-bill or mutual fund interest isn’t any harder to figure out than on a sawbuck. But if you’re invested in a wide variety of businesses and holding companies, then it gets more complicated. > > Estate planning is of course an entirely separate issue. Sure it’s easy to _figure out_ the taxes on the interest income from a billion dollars. The issue is how do you _minimize_ the tax owed. If that’s your goal, then treasury bills might not be the right place to invest the money. ---
**Author:** ![Revtim](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/revtim/32/1042_2.png) [@Revtim](https://boards.straightdope.com/u/Revtim)\ **Post date:** [November 29, 2010, 3:30pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/14 "2010-11-29T15:30:18Z")
> [@joebuck20](#): > > I could be wrong, but I thought that was raised to $250K after the 2008 bailouts. In that case you’d only need 4,000 banks. Ah, I find you are right: > **[Press Releases | FDIC.gov](https://www.fdic.gov/news/press-releases)** It was a temporary raise, but now it’s permanent. ---
**Author:** ![Susanann](https://avatars.discourse-cdn.com/v4/letter/s/7ab992/32.png) [@Susanann](https://boards.straightdope.com/u/Susanann)\ **Post date:** [November 29, 2010, 3:52pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/15 "2010-11-29T15:52:34Z")
> [@Schnitte](#): > > If the crucial criterion is simply that storing the money needs to be “as safe or safer than a savings account”, then why not simply put in in a savings account? Savings accounts of a $ billion dollars are not insured by the FDIC. IF the United States defaults on its currency, then holding bonds, or any dollar denominated asset would cause you to go bankrupt. IF the world economy goes into a Depression, then stocks would nosedive. **Gold:** On the other hand, a billion dollars in gold will hold its value and will survive currency defaults,wars, revolutions, Depressions, disease, and anything and everything else that we have seen in the past 5000 years. A billion dollars in gold is still a pretty physical small package. ---
**Author:** ![Wallenstein](https://avatars.discourse-cdn.com/v4/letter/w/b5a626/32.png) [@Wallenstein](https://boards.straightdope.com/u/Wallenstein)\ **Post date:** [November 29, 2010, 4:05pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/16 "2010-11-29T16:05:22Z")
> [@Finagle](#): > > Of course, you might worry about the US defaulting on its debt, but if that happens, you probably have greater worries than losing your billion. But you can always diversify to other sorts of bonds as well. There’s an old eastern bloc joke along those lines (from when Russia still exerted influence over Poland): Two polish men (Josef and Victor) are talking in a cafe. Josef: I inherited my grandfather’s estate and I don’t know what to do with all this cash; I was always taught to be cautious with my money so I want it to be safe. Victor: Why not invest it in the village bank? Josef: Is that not risky in these times? What happens if the villlage bank collapses? I’d lose all my money. Victor: You worry too much. The village bank is underwritten by the town bank… it’s totally safe. Josef: But then what happens if the town bank collapses? I’d still lose all my money. Victor: No problem… the town bank is underwritten by the provincial bank. Josef: But what if the provincial bank collapses? Victor: Again it’s fine… the provincial bank is underwritten by the national bank of Poland. Josef: I’m still not sure… what happens if the national bank collapses? Victor: Well, the national bank is underwritten by the National Bank of Russia. Josef: But if the National Bank of Russia collapses I’d lose everything! Victor: Ah… but wouldn’t it be worth it! ---
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [November 29, 2010, 4:14pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/17 "2010-11-29T16:14:12Z")
> [@Susanann](#): > > **Gold:** On the other hand, a billion dollars in gold will hold its value and will survive currency defaults,wars, revolutions, Depressions, disease, and anything and everything else that we have seen in the past 5000 years. If you bought gold during its peak, during the early 80’s recession and sold it in 2000, you would have lost about 80% of your inflation adjusted money. Even if you sold it during the current recession, when its price is spiking, you would’ve lost about half your money in real terms. Buying gold in the middle of a recesssion has been a pretty bad idea, historically, as it does indeed loose much of its value when things settle down. ---
**Author:** ![Schnitte](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/schnitte/32/9033_2.png) [@Schnitte](https://boards.straightdope.com/u/Schnitte)\ **Post date:** [November 29, 2010, 4:22pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/18 "2010-11-29T16:22:29Z")
> [@Susanann](#): > > Savings accounts of a $ billion dollars are not insured by the FDIC. Well, my obvious response to this is that the OP only stipulated that the investment be “as safe or safer than a savings account” - there was no mentioning of FDIC insurance. Investments in savings accounts obviously are “as safe as a savings account”, meeting the requirement stipulated by the OP. But that would be nitpicking; I see your point. My suggestion: Hire a fund manager to actively manage your billion dollar portfolio. You could give him or her pretty specific instructions about the level of risk you’re willing to take, and he or she would constantly redeploy capital according to latest developments on the markets. The salary of the fund manager and the other operating expenses of this private office would be small compared to the volume. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [November 29, 2010, 4:25pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/19 "2010-11-29T16:25:52Z")
> [@Susanann](#): > > **Gold:** On the other hand, a billion dollars in gold will hold its value and will survive currency defaults,wars, revolutions, Depressions, disease, and anything and everything else that we have seen in the past 5000 years. > > . We have proven otherwise in other threads. The value of gold fluctuates wildly, it can and has been confiscated by the government, during a revolution the revolutionaries will simply take it from you by force, it can be stolen and it’s not insured by the govt. It’d weigh 20 tonnes, and the security involved would be staggering. If the US government collapses, then you want guns, ammo and canned goods, gold won’t be worth much then either. To give an actual answer to the OP, you’d hire a Financial Advisor, or use one at a good Brokerage co like say Schwab. You’d spread your assets over CDs, Mutual funds, Bonds, Real property, a interest bearing checking acct and so forth. And sure, as long as you wait until the gold price bubble bursts, a few hundred thou in bullion isn’t a bad idea (now is just about the worst time to get into buying gold, it’s on a huge bubble). ---
**Author:** ![Revtim](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/revtim/32/1042_2.png) [@Revtim](https://boards.straightdope.com/u/Revtim)\ **Post date:** [November 29, 2010, 5:14pm UTC](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278/20 "2010-11-29T17:14:24Z")
Can banks purchase additional FDIC insurance? Could I tell a bank that they can hold my billion if they purchase the additional FDIC insurance to cover the full amount? [Next page](https://boards.straightdope.com/t/where-do-you-keep-a-billion-dollars/562278.md?page=2)