Would hire a financial advisor if you won the $1 billion Mega Millions?

[QuarterMillionMan]

I should clarify that I’d invest but but for the initial funds transsfer

[disneysteve]

Where would you park the money? FDIC only insures $250,000. I wouldn’t want to lose it all at one bank if the bank fails. Put $100 Million in 12 or 6 banks after paying the taxes?

I wouldn't put a penny in the bank to earn nothing. I'd drop it all in our Vanguard account. The settlement account is currently earning 5.24%. On $500 million, which is probably about what the lump sum would be after taxes, that would earn almost $72,000/day while I was working out how to distribute it all. As soon as possible, I'd start buying short-term Treasuries which are fully guaranteed. One to three month Treasuries are paying 5.3-5.4%.

The DAILY interest would exceed my current ANNUAL work income. In 4 days, I'd earn more than I made when I was full time. At 5.3%, $500 million would throw off $26.5 million/year income.

[kork13]

That's really the thing to keep in mind... You could really put it into ANY decent investment, and you would earn more money every year than you would know what to do with. You could keep it super simple, and do just fine.

The biggest trick with any significant lottery win would be to just keep your grubby hands off of it, and rebuffing all of the newfound friends & family that will desperately need your help. That's generally how good go broke so fast -- they either go stupid spending like crazy, or give/"invest" it with family/friends.

[QuarterMillionMan]

SIPC insurance covers $500,000 of securities & cash held by brokerage firms should a firm fail. Dropping $1.5 billion or half of it after taxes all in one firm may not be a good idea. Same logic applies as my bank logic above but would you need to open let's say 10 brokerage firms to spread out the winnings to avoid putting it all in one basket?

[ua_guy]

I'm not sure how I'd take care of friends and family - in a very small circle, of course. But I would, if they wanted part of the winnings. Having that much money and having that level of gifting power comes with so much personal responsibility.

[bjl584]

I wouldn't put a penny in the bank to earn nothing. I'd drop it all in our Vanguard account. The settlement account is currently earning 5.24%. On $500 million, which is probably about what the lump sum would be after taxes, that would earn almost $72,000/day while I was working out how to distribute it all. As soon as possible, I'd start buying short-term Treasuries which are fully guaranteed. One to three month Treasuries are paying 5.3-5.4%.

The DAILY interest would exceed my current ANNUAL work income. In 4 days, I'd earn more than I made when I was full time. At 5.3%, $500 million would throw off $26.5 million/year income.

With that level of wealth you would gain access to assets that the average person can't. I suppose keeping things simple would suffice, but I'm sure that there are plenty of places to put that sort of money into. Businesses, real estate, startups, who knows what else you may have access to.

[disneysteve]

With that level of wealth you would gain access to assets that the average person can't. I suppose keeping things simple would suffice, but I'm sure that there are plenty of places to put that sort of money into. Businesses, real estate, startups, who knows what else you may have access to.

Sure but what do I need that for? Right now I can easily get a guaranteed 5% return for at least the next couple of years and 4% going out 10 years. 4% on $500 million is $20 million/year in interest. That’s enough for anybody. Keep it simple.

[LivingAlmostLarge]

Put it into investments? What's the lump sum for $1.55 billion? I think it's only like $600 million which will be 40% gone after taxes

[disneysteve]

Put it into investments? What's the lump sum for $1.55 billion? I think it's only like $600 million which will be 40% gone after taxes

Cash option today is $783.3M. Probably around $500M after taxes.

[LivingAlmostLarge]

Cash option today is $783.3M. Probably around $500M after taxes.

That is incredible

[disneysteve]

That is incredible

It's a ridiculous amount of money, especially if it goes to a single winner. Hopefully some office pool wins so it at least gets divided among a bunch of people. A few years ago, a group at a local hospital hit the Mega Millions for $1 million. Unfortunately, there were 142 people in the pool so each only got $4,800. Still a nice little bonus but hardly life-altering. If that same group hit today's jackpot, they'd each get about $3.5 million. I can just see 142 employees suddenly submitting their resignations at the same time.

[bjl584]

Cash option today is $783.3M. Probably around $500M after taxes.

It's up to $860 million now

[disneysteve]

It's up to $860 million now

Interesting. The MegaMillions website still says $783.3M. I guess that hasn't been updated.

[disneysteve]

A single winning ticket was sold in Florida. Oh well.

[QuarterMillionMan]

Good now I am not compelled to buy more.