If you suddenly became a millionaire....

[Bluezy]

...what would you do? How would you invest? How would you handle that taxes?

On another note, how would you approach the publicity, if any? What about "fair weather" friends? And what would handle the frivolous lawsuits that come along with financial windfalls?

[BCompDude]

What would I do? Invest it all. I already have my emergency fund created so I don't need the money liquid. Nor do I have any debt, so I wouldn't have to pay any off.

I would invest half of my money into index funds. The other half I would invest into individual stocks that I liked at the time, though nothing too risky or speculative. For instance Cisco would be one I'd invest in right now.

ETF's would also represent a tool that I would utilize in order to conceal myself from The Man as much as possible. Very tax efficient.

A possible portfolio for my ETF's (this is one from MSN I actually use, with good success, although weighted differently than what I suggest here):

VTI--Vanguard Total Stock Market VIPER--tracks the Wilshire 5000
EFA--iShares MSCI-EAFE--corresponds to the Morgan Stanley index of stocks trading in Europe, Australia and the Far East.
AGG--iShares Lehman Aggregate Bond--attempts to track the price and yield performance of the total U.S. investment grade bond market.
IYR--iShares Dow Jones US Real Estate--holds a basket of 75 real estate investment trusts (REITs) that represent that sector of the U.S. economy
IYM--iShares Dow Jones US Basic Materials--includes stocks in the energy, basic materials and precious metals sectors.

Each with 10,000 invested. An equally weighted example will be extremely stable; although it won't generate quite the capital gains/dividend revenue that the stock indexes alone would provide--I wouldn't need that.

In regard to fair weather friends--I'd tell them to get lost--not kidding. I'm not sure why I would get lawsuits. . .but I would just defend myself in court since they would all be small claims and an obvious attempt to steal my money.

Of course this is all hypothetical.

[jmjj215]

I would hope it wasn't made public. I would probably buy some real estate for rental properties, invest some in the stock market, some in bonds, and blow some.

[mjrube94]

I wouldn't mention a word of it to anyone! Although this may sound impossible, I don't think it would be that hard to hide. By the time I paid taxes (35% - $350,000), my mortgage ($230,000), my HELOC and other debt ($70,000), then dropped another $100,000 or so into my kids' 529 plans, and funded some charities of my choice (amount TBD), the rest would be invested in some long-term mutual funds and my day-to-day life wouldn't change much. Maybe a nice vacation, but nothing that would raise the suspicions of those around me...

[akaivyleaf]

I'd be the same as I am now. Whose to say I"m not already a millionaire...

[Miz Pat]

If I suddenly became a millionaire, I would pay off the house, improve the snot out of the house (as in new tile, carpets, real furniture, landscaping and making the back porch into a sleeping porch with a wood heater), put $6,000 apiece in a roth IRA for my 6 nieces and nephews and then put the rest of the money in the bank and live off the interest or save it for retirement.

I wouldn't retire until I knew where I stood financially because I'm not wildly good at numbers, only doing frugal stuff.

Pat

[Russell]

House prices in decent areas here start at 1M, we're talking 1800sq-ft house on a 3k sq-ft lot, nothing fancy. So after paying taxes I don't think it'll cover even buying a house...that puts it in perspective right there

[Razzy]

Pay off all our debts, keep the jobs, try not to raise suspicion that I became a millionaire.

I would buy a fuel efficient car and build me the house of my dreams that would be environmentally friendly and of coures give to local charities.

Razzy

[Fern]

If you became rich vis a vis a state lottery, they WILL publicize it so you'll have no say in the matter of keeping it a "secret."

[karie]

I would invest, buy real estate, and go shopping for a new house and car! ~K

[Miz Pat]

I owe $69800 on my mortgage, so a million dollars after taxes would still do the job - and Paying ahead on the mortgage would have still paid off.

Pat

[cercis]

I'd buy a llama or an emu. Or a green dress, but not a real green dress, that'd be cruel.

Oh wait, that's a song.

I'd buy a house (since I currently don't have one) replace any carpet with wood or tile, and then make it energy efficient, add a couple of mini-turbines and some solar panels.

Then I'd invest the rest in college and retirement plans. $1M isn't that much in today's world. You really need at least $1M for retirement.

If I had more, I'd found a few foundations. I'd like to found one that would provide solar and wind energy for the housing areas down here which have no electricity and have a source of potable water added (they come to town to get water).

[robex]

I'd buy some art maybe a Picasso or a Garfunkel...oops, same song!

I'd pay off my house, buy dh and myself two new cars, pay off my Mom's house and put the rest aside for retirement. I don't know what I'd invest in, but I'm sure our financial advisor would have some great ideas!
I would try very hard to not have anyone know that we had the money...I would hate for it to change people's perceptions of us.

[pennywise]

pay off the remainder on the mortgage. Put the rest in a stable fund where the principle is guaranteed not to be lost. No need to gamble to make it grow. The stock market is fraught with lies, corruption; bonds: ditto. No need to gamble. Continue working and saving in the same way I do. Ensure the money is transferred to my daughter so none is risked in the health care industry.

[jmjj215]

where the principle is guaranteed not to be lost

is there such a fund?

[cercis]

There are t-bills and other gov't bills. You are guaranteed to get your principal and a certain amount of interest.

This is what "Your Money or Your Life" recommends. Not a huge return, but safe and guaranteed.

[baselle]

But we'd still eat Kraft dinner!

First off - I'd keep mum about it, or at least as mum as I could. I would put it in a several large 6 month CDs. I would ask - quietly - for recommendations for a lawyer and a fee-based financial planner.

I would get a safe deposit box.
I would re-write my will, perhaps put the money in a trust for my inheritors. (I'm in the midst of this - its on my mind).
I have already made some investments that I'm confident in. During those 6 months of incubation I would determine with the financial planner what percentage of this windfall would go in those, figure out my final positions in them. After 6 months I would begin to implement buying on a monthly basis - still using dollar cost averaging.

I might buy a house, but I think I'd patiently wait for something that I'd really like. Seattle isn't like Orange County, but real estate price would take out a big bite out of the windfall and a house is not something I have a burning, burning desire to have.

I would retain the lawyer for the "fair weather friends".

And then, after all that, reserve about 5% for fun, like buying some Dijon ketchup...

[cercis]

Who knew there'd be so many Bare Naked Ladies fans? LOL.

I heard that song in 1993 and became an immediate fan. It took until 1998 before I could find the CD in the states though.

[Tree0164]

If I had a million dollars instantly.

1. Take ou taxes (probably 350,000)
2. Pay off mortgage $120k
3. Add a second level to the house $100k
4. Put $150k in 529 plans (50k in each child's name)
5. Buy a vacation on the lake $150
6. Max out 401k each year and Roth
7. Invest the difference in mutual funds

[catlover15]

I don't know. I would keep the same friends and try not to act differently around people.