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?

  • kent_eh@lemmy.ca
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    2 years ago

    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.

    • Stoney_Logica1@lemmy.world
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      2 years ago

      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.

    • spencerforhire81@beehaw.org
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      2 years ago

      The trick is to hire SEVERAL groups of people (read: wealth management advisor teams from major financial institutions) and let them each manage a $25M+ chunk of it. You’d want to have 2-3 different groups, and then a simple portfolio you manage yourself that trades in market-tracking ETFs and highly rated government bonds. That gives you the combination of excellent security with minimal personal maintenance. And you get all the perks of being a wealth management client from several large institutions like below-market loan rates and unique investment opportunities. Also, the really big institutions like JP Morgan and Goldman Sachs have lots of resources available for financial education for their wealth management clients.

      That’s the best advice for someone who doesn’t really know what they’re doing. Never give one person the keys to your entire net worth, THAT’S how wealthy people end up broke.

      In this hypothetical, even if JP Morgan or Goldman Sachs collapsed or embezzled your funds (which is INCREDIBLY unlikely), you’d still have more than enough wealth to live comfortably for several lifetimes in your other accounts. Just make sure your accountant knows where everything is, because you don’t want to go to prison for tax evasion.

      • SugarSnack@lemm.ee
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        2 years ago

        This is absolutely the way to go, but be aware that it can lead to concentration/sectoral risk when managers aren’t aware of positions in the other portfolios. For example, Goldman could invest heavily in tech or pharma or whatever, not realising that JPM also have a big investment in that area.

        • JackbyDev@programming.dev
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          2 years ago

          Investors shouldn’t be picking winners. That’s already too much risk and too many fees. Total market index funds and total bond indexes are what you should be investing in.

      • mysoulishome@lemmy.world
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        2 years ago

        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…

  • maporita@unilem.org
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    2 years ago

    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.

  • Candelestine@lemmy.world
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    2 years ago

    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.

    • pjhenry1216@kbin.social
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      2 years ago

      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.

  • AProfessional@lemmy.world
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    2 years ago

    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.

    • AllonzeeLV@lemmy.world
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      2 years ago

      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.

      • LastYearsPumpkin@feddit.ch
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        2 years ago

        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.

      • AProfessional@lemmy.world
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        2 years ago

        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.

      • unknowing8343@discuss.tchncs.de
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        2 years ago

        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.

  • Tygr@lemmy.world
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    2 years ago

    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.