Big Lottery Wins: How to keep a 300-500 million dollar lump sum simple? (funds, pay)

[selhars]

Just curious. I'm sure there are people who have brainstormed this all out.

Suppose a person just wanted nice passive cash growth. (Stock market, banks, etc.)
Is there a way to keep/manage that large a lumps simply?

No investing in any businesses. No buying any real estate. Both of which would have to be managed.
They don't want 5 houses. They don't want acres of land.

Dozens of accounts dozens of banks with less than 250K in each?
How do they even manage it? Where do they put it?
If the initial lottery payout goes to one bank wouldn't they have to split it up fairly quickly to get under the insurance limits?

The person doesn't want the annuity.
IF they were going to do annuities they should have just taken the lottery'e annuity.

So I'm wondering about someone who takes the lump sum and want to just let the money itself grow.

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If there's any way at all they'd rather take the lump sum...
Or with a billion dollar win is the only way to keep it simple to just go against what they'd rather do......and just take the lottery annuity. ....because .....In the long run THAT is the easiest to manage.

[kreeyax]

Agree for a very large jackpot you'd probably want to do the annuity as you'd still be looking at opening a bunch of bank accounts all containing less than $250K. I'm sure large banks have no problem opening that many accounts and making access and management easy. Maybe buy CDs in several of the accounts and keep a few un-invested for spending money. If it were me I'd probably move half of it to a brokerage and invest in an index fund like VTI for additional growth and income. I know it will never happen but it's always fun to dream about.

[BigCityDreamer]

I guess I'll figure it all out once I win 300 million to 500 million dollars.

I don't play the lottery though.

[selhars]

Especially for me being 63, single with no kids.....
I'd be thinking 1/3 in the market....1/3 in CDs.....1/3 in cash....or (since I've been reading a lot of doom and gloom economic news)...maybe...1/4 each in the market, CD's, cash, and gold!

Family members would want me to put lots into crypto...but I don't understand it. So it wouldn't be for me. Even if the dollar crashed, I'd still have a few wheel barrows I could push to the store for a couple of loaves of bread and cans of beans.

It's more money than I'd ever make or spend in a lifetime. S0 to be honest I wouldn't need it to make a dime. I'd just need to stash it safely. But that's a lot of CDs.....

OK so Iv'e seen these from different resources:

-Depositors may qualify for coverage over $250,000 if they have funds in different ownership categories and all FDIC requirements are met. All deposits that an accountholder has in the same ownership category at the same bank are added together and insured up to the standard insurance amount.

-An account that contains more than $250,000 at one bank, or multiple accounts with the same owner or owners, is insured only up to $250,000. The protection does not come from taxes or congressional funding. Instead, banks pay into the insurance system, and the insurance provides their customers with protection.

- Looking for a way to keep large deposits safe? With CDARS/ICS, you can receive up to $50 million in FDIC protection through xxxx xxxx Bank. There are few guarantees in life – FDIC insurance is one of them. CDARS can be a valuable cash management or longer-term investment tool for you or your business. (I redacted the name of the bank.)

Either way seems like a lot of accounts, in a lot of institutions.

[UntilTheNDofTimE]

I wondered this myself. Say I won 600 million and decided to take 20 million a year annuity. Could I just initiate a bank transfer of 20 million a year to my vanguard account and buy VOO and VTI? Or is that too large an amount to ever hold in individual investing accounts?

[hikernut]

As I recall, Warren Buffett's advice for investing large amounts is to put 90% into the S&P 500, and 10% in T-bills.

FDIC insurance is of little help with amounts like this. How many banks would it take to have all the money covered? I'll let someone else do the math. In any event, such an endeavor cannot be considered simple.

T-bills are every bit as secure as bank deposits, both being backed by the full faith and credit of the U.S. government. The only possible issue is the broker holding them. I suppose one could hold assets at two or three different brokers to mitigate the risk, although it is hard to imagine Fidelity or Schwab failing outright without an accompanying collapse in the economy and civilization. One answer to this would be to have a few million dollars worth of physical gold stored somewhere overseas. Of course this incurs storage and insurance cost, but it's probably not an unreasonable precaution for someone with hundreds of millions of dollars.

[oregonwoodsmoke]

If the jackpot is large enough, then don't worry about investing. Just put the money into T-bills, CDs, and money market funds and go and relax and live nicely on the interest and maybe a bit if capital draw down.

If the payout is only a few million, at that point you need to worry about how to invest to preserve the capital and still live a nice life. That would be a little trickier. Once they take away half because you want the lump sum and the state and feds take their taxes, there is a surprisingly small amount left to try to get it to support you.

[Grlzrl]

I wouldn't worry too much about it. Your chances of winning are pretty low.

[Lowexpectations]

Insurance and reassurance is an easy thing to get so your cash plus CDs could be worked to accommodate through multiple programs

[HudsonCoNJ]

Just put it all in a Too Big to Fail bank and your money will be safe forever. Or give it to me and I’ll hold it for when you need it.