What Do You Do With Large Amounts Of Money?
What Do You Do With Large Amounts Of Money?
Suppose you win 100 million. What do you actually do with it? Banks only guarantee 250,000. Do you have to invest it? Is there anywhere you can just let it sit and draw interest?
Have you ever seen the opening credits to Duck Tales?
That.
Just don’t dive into it 💀
This was actually a plot point in a comic strip. Scrooge was the only one who could swim through cash and won whatever the conflict at hand was because the rival of the week couldn't.
Which activity? https://www.dailymotion.com/video/x3azdi0
Here in Norway you are legally required to attend a few sessions with financial advisors(a protected title here, so they will actually be qualified), before you are able to recieve your winnings.
The rough thoughts I have had about being in such a situation is to allocate maybe 10%-20% as "fuck you money" to have fun with, and the rest to follow all their advice with
That's a really great idea! More places should do that. Maybe then there'd be a lot fewer people losing all their money within years.
In addition to major prize winners, it should also apply to people who have just started earning a massive income. Eg, professional athletes.
FWIW, the NFL does actually have financial literacy classes for players. It's definitely a start
That's good knowledge, maybe people who are doubtful of financial advisors in their country can visit Norway
France does that too. It's not a legal obligation, just something the local lottery does, presumably to avoid bad publicity of winners going on a tasteless spending rampage.
I think in the US, a similar title would be a "fiduciary". Ie. Someone who is supposed to act in your best interest.
No, it's more like doctor or engineer where it's a protected profession that's criminal to imitate.
Two chick's at the same time.
You pay somebody to deal with it.
Mixture of types depending on your goals. CDs, Bonds, Stocks, etc.
You can just open more accounts also. Having it all in cash probably isn’t the smartest idea.
When you win/exploit/inherit/etc enough capital to live well for multiple lifetimes, it always perpexes me when people fixate on making more.
You won, go enjoy hobbies you can easily fund now, it's just hoarding at this point. Capital is a means, and it's kind of pathetic when people warp it into their end goal when it's no longer the key limiter to their lifestyle.
It's no different than hoarding newspapers, but at least many of those hoarders often demosntrate the self-awareness and recognition of embarrassment.
For 100 million you are good but for more realistic amounts of money the value of it just goes down with time so it is a good idea to do something with it.
I think the behavior of hoarding is pretty human and there is a broader failure of inequality.
Let's say you have $100,000,000 dropped in your lap. You now never have to worry about needing money ever again, which in our current society means you don't need to worry about a LOT of problems.
So it's natural that most people want to preserve that security, the best way to do that would be to invest the money in a way that it grows equal to, or faster than you will spend it.
You can just get it all in cash and stuff it under your floorboards, but there's a non zero chance that the money will be physically destroyed or stolen from a disaster.
You can stick it in a bank, but you have very little protection for the bulk of that money from the government insurance.
So the smartest thing to do is to spread that money out to investments that will grow that money in a diverse way to protect your newfound security.
Once that is set up, you create a will (or trust) to handle the money when you are dead. Who gets to benefit from your windfall once you're gone?
Then you have complete freedom to live your life how you want to.
I completely disagree with you.
If you gain sufficient amount of money (we are talking 100M $ here, but it works even for 1M), you have SO MUCH MONEY that it can generate money by itself within a reasonable timeframe AND you can live really really well with it, enjoy your hobbies and free time, all at the same time. And if you don't know how to do it, let a professional help you, because you can pay for them, too.
I would buy me an American senator. Always wanted to have one.
For 100 million, you can get a majority in both Houses.
If you buy a senator you'll get 20% off a supreme Court Justice!
From what I've heard they often make a mess, and ruin your stuff.
Only need somewhere around 250k for that, you may as well go big.
Hire a fiduciary to invest it so you can live off the interest and some for the rest of your life. You’ll still have plenty to blow after that so it’s up to you what you want to do with it.
Go to a big city and get a lawyer, finacial advisor, and accountant that have expeirience dealing with that kind of money. Make sure all three are okay with working together. Take their advise. Enjoy life and (for me) do fun things that bring a smile to the not-so-lucky. If i won big money id buy a nice food truck and go around factories around lunch time offering really good food for free. Or go to walmart looking for people with kids and tell them ill buy anything they can fit into 1 cart. Id also hire a professional chef (and team) to cook a great meal for the local homeless shelter. Things like that are good for your soul and will give you a far better feeling than blowing it on toys.
Edit: id do stuff like that as much as my financial team would let me.
Depends what you want to do with it. If you want to keep it liquid, you can just keep it in bank accounts in major banks. Split it across several major banks. If they all go under, your problems will be far bigger than money. You can also have multiple savings accounts with each bank to garuntee 250k in each one and earn maximum interest. I have 6 savings accounts with my bank each with ~200k in it. If the balance exceeds 250k, the interest rate dtops down from 4.25 to somethink like 1.15.
If you dont need to keep it liquid, you buy a stable asset like land. You might choose to buy a bumch of houses and apartments in the city, but that comes with strata fees and property management etc. Plus, being a landlord investing in residential property makes you a shitcunt. In my case, I purchased rural land. I purchased land adjacent to nature reserves, with about 450ha of arable land, 110ha of forested land, and 85ha of salt damaged land. Im remediating the 85ha of salt land, and strategically planting out about 10 trees/year/ha on boundaries of my arable land to reduce soil erosion and degradation. I lease the land to a couple of organic grain growers who work the land. At any given year about 1/3rd of my arable land is fallow. (Note tgat im not a farmer by trade, I just think its a good, sustainable asset that I can use to directly improve the environment)
The real answeris, get in contact with the accountants of other people who have 100mil and have them take care of it. I'd probably squirrel away some in precious metals just in case. Also, I would not post a single thing on the Internet about the fact that I'm rich.
there’s a lot of reddit posts (yes. i know, the heresy) and youtube videos on this. tldr: get good lawyers and financial advisors before you tell anyone, and let them help you work it out.
Speaking generally: investments.
Diversifying stocks and bonds mainly, and each asset should be diversified from the others of the same type (eg; tech stocks counter balanced with things like agriculture or energy or something that's also stocks but not in tech - Rinse and repeat for bonds, etc). Mainly long standing assets should be prioritized, stuff that has historically paid well in dividends and will hopefully continue to pay well.
The majority of your assets should be stored in this manner.... This will help the long term value of your money. Above and beyond that, the assets will counter balance eachother if they're properly diversified, as one sector under-performs, another should be performing better and make up the difference, so payouts should be fairly steady.
At the end of the day, those investments will make up your passive income, which any sufficiently rich person has in spades. I wouldn't pretend to put numbers on any of this, whether to say what percentage of winnings should go to what or in what volume, and certainly nothing fixed, if you're not sure how to get any of this finance stuff handled yourself, there are plenty of investment firms and personal wealth management companies that will gladly take your money so you can make more (so you can continue to pay for their services), and who will be more than happy to get you started.
Moving away from stocks, bonds, and passive income, you'll want to focus on fixed assets. Having your money invested into things. What those things are is up to you, but I would advise to focus on getting a good property instead of other assets, since real estate tends to be one of the few things that continually increases in price over time with few exceptions. Compared to other investments (eg, stocks and bonds) unless the property is a specific "income property" aka, something you're renting/leasing out, it's not the best investment for growth, but having a home that you own and being able to live more or less rent free, helps you hold onto your money, rather than blow it on a place to live. A house will be a rather large one time investment that will at least hold its value, and you'll get a place to live out of it. Cars tend to lose all value in a matter of years to decades, and there's a high likelihood that they could be destroyed through use. So cars are generally expenses, not investments with few exceptions. So buy vehicles with the understanding that you may not get your money back at the end of the life of the vehicle; IMO, that applies for almost any vehicle including planes, boats/yachts, etc. So spend wisely in regards to transportation.
For everything else, out of your passive income create a salary for yourself, and set aside some "in case of shit" money from your year over year dividends. Reinvest/grow your funds with whatever you're not paying yourself in salary. The amount is up to you, but I'd say if you can afford to live on less than half of the payout, and reinvent the other half or more, do it. The in case of shit funds would be for incidentals like your car getting totaled, or needing to replace the water heater/HVAC on the house, or something unexpected you just need instant cash for.
Up front, you should be paying off debts and living within the salary you set for yourself.... Doing everything in your power to keep your investments intact and growing for your own future. It's fine to go on vacations or cruises or whatever you want, as long as you stay within your self defined salary, and you're not just blowing through the capital of your investments. Long term, you're going to be able to live very comfortably without needing to worry about money which, honestly, is the only outcome that should be worth anything.... That safety and security is extremely valuable. Do not throw it away on a few years of indulgence.
New roof, solar panels, battery, EV, remodel part of the house, new siding, buy a small house in my neighborhood to function as a guest house, take care of my parents, spend a couple months in Europe.
Oh, you meant the rest of it. Government bonds are always good. You can also use more than one bank to expand the $250k limit (which applies per account type and bank). A trust, for example, is insured separately from your checking account.
Past that, I couldn't tell you. Your financial advisor would though, just make sure they have a "fiduciary duty" to serve your interests.
After the usual paying off debts, buying houses for family and making sure that sort of needs are taken care of, I would invest in things that really should exist to improve society in general, even if thwy may bot be guaranteed return on investment.
Greener energy, pollution cleanup, educational endowments, social enterprises, things along rhat line.
As summer temps rise and people with their heads in the sand die out, I think we're going to see a major swell of focus on green tech to combat global warming, meaning investments in that sector are going to pay dividends.
Just invest enough to draw on to cover your basic needs for life and be secure, and spend the rest on things people you know need. Improve the place you live. Fix something small. Build some parks with low income housing nearby. Don't be a dick and buy shit just to buy shit for yourself.
Buy 100m of S&P 500, live off dividends with stealth wealth and no work.
Hire someone to open you 400 bank accounts.
I'd hire someone who knows what they're doing with it and follow whatever advice they give.
that's how many millionaires (from sport, music and film) end up broke at the end of their life.
By listening to someone who knows how to manage money? Or by letting someone handle it it who fucks them? If you’re talking about a professional who is licensed and bonded and all of that seems like it would be smart…
No, they end up broke because they spend as if they'll never run out of money without putting it into places that continue to make money for them. They level up their house, car, clothes, flight class, whatever, then end up living paycheck to paycheck with no savings and not being able to keep it up forever.
Are there cases of some wealthy person trusting the wrong guy, whom they hand over their $$ to and that person runs off with it? Sure, but that's a far cry from getting advice from a professional and following their advice.
Real estate and Stocks/ETF to park it. Get my family nicely set up. Then build an under the radar luxurious home with good research equipment so I can do science without all the hassle in academia. Also some charity living projects for the poor in my area.
Buy a house. There isn’t any more land being made. (Except in Hawaii, what with the volcanos out there)
Lend some to Uncle Sam by buying Treasury bills. He’s been good for the interest payments. They tend to earn a bit more than bank CDs anyway.
If you’re really risk-averse, go for those bank CDs. Brokerage houses like Schwab can buy those on your behalf, and track which banks hold them, so you don’t exceed the deposit threshold at any one institution. Good luck finding 400 banks through a brokerage’s finder, though.
Buy stock in publicly traded companies. Or buy mutual funds. It’s good to get some growth in the portfolio, which fixed income alone can’t do.
Donate some to a nonprofit when you need a tax write-off.
Start your own company. Go back to school. Invest in yourself.
Just a reminder that [email protected] exists in case people want to discuss this kind of questions
Thats only for people who want to live like paupers until they can die
Rich people have their own special financial advisors. The ones who know how to avoid taxes.
https://www.forbes.com/advisor/banking/ways-to-insure-excess-deposits/
Here are some of the most common strategies if you're over 250k. But at 100M it would be very foolish to not invest (likely hiring a private wealth manager to do so competently).
Foolish if the goal is to hold on to more money than you could ever need in ten lifetimes to pursue the goal of accumulating more from the work of others.
Ultra low risk is possible with staggered bonds. That kinda money, you can live off the lowest yield of earnings and live like a king.
Pay off my debt, give 10 million to churches and charities of my choice, give a million to my parents and another million to my in-laws, give myself a million, and take the remaining 87 million and start a non-profit that aims to fight climate change and eradicate world hunger.
Make my dream a reality
Finally could have a freaking team for my project
Lmao
I'd pay off my entire immediate family's debt firstly. Then I would speak to a lawyer and accountant to protect myself and my family. Then, based on the accountants advice, I'd set it up so my parents can live where they want to live or travel somewhere and renovate their entire house where they can live and no longer have to work anymore. I'd get my sister a house wherever she wants and no matter the size. I'd get myself a secluded house where I can live on peace and a car so I can work in peace and all the moochers can leave me alone. If also invest in starting my own creative studio where I'd be working on my own game and hiring artists, voice actors, musicians, and programmers that I know. And, since all that wouldn't use the entirety of the 100 million, I'd also use a good chunk of the money to help all those affected by the canadian wildfires because that just sucks what happened to those people and they don't deserve it.
As a person living in western Canada, thank you brother. Shits wild over here.
My only issue is - Lawyer first.
Either you or someone with a fiduciary duty to you will open up several accounts to invest in your name. These accounts will vary but be geared to making you money, providing the liquidity you need, and hedging against market risk. You might also make an investment in illiquid assets like real estate or hedge funds.
It won't be guaranteed unless you pay insurance on it, but you should be rich enough to take the hit of one account going under.
Bond fund here we come, that's as ensured as you get now, moneybags.
Private wealth management. They take a large cut but it's worth it for most mega-rich folks. They will manage the money for you and invest it according to your goals. They spread the funds out into various investment classes to lower overall risk and they work full time moving money around to maximize gains. They also have access to tax experts who can advise on how best to minimize taxes.
This sounds like the way to go. Let the professionals deal with it
Help friends & family. Donate to community assistance programs. Donate to other causes. Buy people nice gifts.
investment opportunities are endless really. I'd buy real estate & develop it for resale - relatively easy profits there. US FDIC only insures up to 250k per account, but there are other country's banks out there - the Swiss banking system was a popular choice in the past but I've heard that the Cayman Island banking system is good as well. invest in tech - small businesses, as a few tens of millions isnt going to go that far, but 100 mil is good seed capital.
or, shit, just retire on it & pass the remains to your descendants.
I'd build as many zero-equity housing co-ops as I could in areas with high costs of living.
Buy more hard drives and some 10gig networking gear. Cut my hours at my job to like 20 a week
As recent events have shown, the FDIC guarantee amount isn't a hard limit (at least in the US). That said, the name of the game is to keep accumulating capital, so you just use the money to make investments. Maybe you have some specific ideas about which investments to make, but typically you just hire a company to do this for you. What you don't do is spend it. Instead, you use those investments as collateral on lines of credit and that is how you get your spending money. This way, you get useful cash flow while minimizing your taxable income.
An important thing to do is launder your reputation by contributing to charities and causes and making investments that have popular appeal. It's cheap insurance to make sure the working class doesn't bear too much resentment for you specifically if a revolution ever does materialize.
Invest in my people (friends and family), especially the ones I care about. Not exactly a win win but it's basically a wash in the worst case and a super win in the best case.
If they succeed in their endeavours, I get partial ownership in it or it can be a loan (whatever they prefer) and if they run away with the money, it's a cheap price to pay for setting up someone I cared about with a better life and finding out they were not trustworthy.
Also, if spread around enough, there will be enough people who will be thankful to you for improving their lives that they'll be there for you for a lifetime.
This is all after you do the usual investments with some amount and also keep enough aside from any ideas you want to try to bring to fruition (you'll want to do something at least after all)
You don't have to, but it's kinda dumb not to. You can cram it all into a wooden chest and bury it in your backyard if you want, but while its down there its slowly losing value.
Instead you can set it up to make more money for you, without you having to do anything. Money, in sufficient quantities, can become self-replicating unless you do dumb shit with it and waste it. You just hire someone who knows how to make that happen, some financial manager of some sort, and they take care of it. You can even set it up so they just budget out an allowance of your own money for you, so you know how much you can spend every month or whatever. If you want.
This way you don't have to worry about anything, you just know you have such-and-such amount every month to play with, just like most people. It's just a lot more than most people get.
A fiduciary (not an accountant) will know what to do. Contact a fiduciary
100M before or after taxes ? 🤣
Only 70 million, just keep the money at that point not even worth the time to cash it.
A lot of wealthy individuals "park" their money in things like real estate and art. For the art, they safely pack it away in warehouses. There's a whole industry that'll do it for you. A lot of them dont even see the art. It's just a wealth parking vehicle.
Another avenue is starting one or more non-profits and philanthropy organizations for the money.
And another is a living trust, to avoid probate when you die, to maximize the inheritance for your surviving beneficiaries.
Buy lots of weed. Buy a place to make a workshop. Buy lots of machines. Teach teenagers (and adults, if they want) woodworking, metalworking, and robotics. Make some money on the side from random comissions. Maybe bild myself a wooden house.
Multiple banks, only storing what is federally insured by the FDIC in as high yield interest rate savings accounts as I can get.
100m $ !? Other than buying all things I and my family need, I may invest a in real estate that I could rent, and put the rest in the bank.
Invest a decent chunk, find somewhere I can be away from things, set my dad up somewhere nice he can get the medical help he needs without worry.
After that, work on funding pro-womens rights and LGBT+ causes and platforms. Do what I can to help others in a position like mine, where there isn't really a "safe" place around to let the mask drop away.
Of course first into a bank, a few million in crypto, another few million in ETF, another few million to actual brokers. Then it's time to start buying up property and renting it out at a fair rate - it's not like I don't have money invested elsewhere. All this to diversify investments.
Gotta buy my entire family houses too, so that they don't have to be wage slaves anymore. I should be left with... 50M or more?
Now the fun part starts: investing in opensource. I'd spend my time making a team to find "critical" places to invest in. Stuff where there's just little to no competition or the market is dominated by big players. Identify opensource projects that could challenge that dominance and see if groups would want to work on it full time, be it development, marketing, hardware costs, security audits, etc.
And of course travel and do lots of drugs.
Can you invest with gold to guarantee it? If so then that.
Gold isn't guaranteed to outpace inflation. It usually does, but not always. Moreover, over periods of time, it's a poor investment compared to riskier assets such as stocks. Investing in the gold market (mining, etc) can be a little better, but nothing is guaranteed about gold. It's not difficult to beat gold as an investment.
If you have any decency, get rid of most of it, preferably to charities or political causes.
That sort of wealth in the hands of a single person is obscene, and spending it on luxury when there are people starving and homeless in the world is the height of immorality.
Charity exists so that rich people can pretend to help, but also get to be a petty tyrant. Charity is scam.
Well, you've got to get rid of it some way, and while charity might systematically be a problem there are plenty that do genuine good.
i would invest it - probably in real estate or land.
Finally get rid of the biggest barrier to a better world for at least 300million people, primary/buy-out every single politician of the democrat party to ensure the things that are ostensibly in their platform are actually enacted. Also ensure that every single current non-elected neo-liberal "policy wonk" and their sycophants never have any influence in any future government again.