Congratulations! You just won the $731 million jackpot, you're the Powerball King! So now what do you do.
Now what do you do?
Well lucky winner, you have come to the right place because I've actually done this before. I've been able to help some winners in my time and I have some advice for you that could be applicable to many people out there.
First, here is the most important takeaway you will ever get from anyone: you only need to get rich once. Trust me, people will come to you with schemes, long lost relatives with great ideas, unknown ingratiators who want your money and will have not a thought in the world about scamming you. Believe me, I have been conned or attempted to be conned so many times it makes me sick. In the two worst cases they were long-term cons. I believed. Heartbreaking.
So, do not give people loans or invest in anything that has any risk. You don't need it. You are already rich.
Second you have a choice of taking the $731 million figure as an annuity or in a lump sum. Always go for the lump sum. Let the interest you will earn accrue to you, not to the state. Plus, we are using the low rates that President Trump gave us. This is ordinary income. Taxes will only go up. Take your medicine now. It's not a big deal. You will still be rich.
Third, your principal worry is not the tax man, it is inflation, or more specifically, hyper inflation. That's the only thing that can threaten your wealth and we have to do something about it. I have studied hyper inflation whether it be in the Weimar Republic or Zimbabwe or anywhere else that the government has debased its own currency. I am not saying that will happen here. But given the debt we have piled on we have to be worried.
So, what holds value in hyper inflation: three things: precious metals, mansions with acreage and art masterworks.
Now the latter means you need to go to a place like Sotheby's, I know intimidating, and you need to buy something like a Picasso, a Cezanne, a Rothko, or even Van Gough. I can accept a Barnett Newman. Jackson Pollock's fine. Check what we call "the comps" and don't overpay. Because I am not actually advising, and I can't divulge what broker I would use. But going to one of these auction houses and asking them how to learn will be a worthwhile exercise.
Real estate: Sotheby's has some terrific looking places in St Michaels and Potomac, Maryland, both for about $12 million. The Potomac place seems to be new. I like this St. Michaels offering, on the water, 1867 manse. Nine acres.
Better buys, but worth low-balling, are in Virginia: a $29,950,000 23 bedroom hose on 664 acres in Warrenton. Land is exceptionally valuable. Or an extraordinary but perhaps overpriced 4500 acre estate in Scottsville, Virginia for $75,000,000. Do not laugh. This is just insurance against carrying wheelbarrows full of dollars to buy a loaf of bread.
Then you need some gold, I would put 5% of the money in gold. Buy bullion. You can afford it. Put it in several safety deposit boxes in different banks. Nothing wrong with putting some overseas. FDR confiscated our gold after he became president. And people like that guy historically. I mean, he holds up under close scrutiny.
Yes, the moment you have been waiting for, I want 5% in bitcoin. Don't buy all at once. I used to recommend 10% gold but I now regard bitcoin as a reasonable depositary worth that can be defended in tougher times.
Then I would put the bulk of what's left in short-term Maryland municipal bonds. Best to be in a fund. Maryland is triple AAA and bond rates are so low that you must stay short-term.
Only then, after all of those assets would I actually risk owning some stocks. No more than 20%. Buy dividend aristocrats that have a long history of paying good dividends. May I suggest Abbott Labs (ABT) , Walmart (WMT) , PepsiCo (PEP) , Hormel (HRL) , Procter & Gamble (PG) , Clorox (CLX) , Illinois Tool Works (ITW) , Emerson Electric (EMR) , AbbVie (ABBV) , and finish off with a local one: McCormick (MCK) , the spice company.
What's this, a stock guy, the host of Mad Money for almost 16 years, suggesting that only 20% of your money should go into stocks? Frankly, only because I host Mad Money would I put any stocks in. I want you to have more income from growing dividends.
I know, ultra conservative but remember, you only need to get rich once. You don't want to try to hit the lottery a second time.