What To Do With 10 Million Dollars If It Fell In Your Lap


What To Do With 10 Million Dollars If It Fell In Your Lap

There’s a Louisiana Lottery and Powerball electronic sign in between our house and church. Every Sunday morning after we leave church, my 13 year old and I play a game.

As we pass the sign I ask him, “What would you do if you won the lottery?”

I usually call out the specific jackpot number that the sign displays as it’s always fun listening to other people’s dreams and how they would spend their winnings. 

When’s the last time you’ve done that?

It’s been awhile hasn’t it? 

Not too long ago I had a dentist reach out to me that actually won the lottery so to speak.

He informed me that one of his relatives left him $10 million dollars (nice Uncle!) and he wanted to know how to handle it. 

What would you do if $10 million dollars was handed to you as a gift?

Before you answer that, have you ever heard the phrase, “to whom much is given much is required?” 

There’s Great Responsibility For What We Receive

In my opinion, everything we receive comes with great responsibility.

Luke 12:48 states, “From everyone who has been given much, much will be demanded; and from the one who has been entrusted with much, much more will be asked.

Whether you’re a believer or not, the above statement couldn’t be further from the truth.

If I received a phone call from Amazon’s corporate office today informing me that I was chosen as Jeff Bezo’s replacement, how long do you think it’s take before the stock price began a sharp decline :)?

Seriously, if I was given the reins as Amazon’s CEO, MUCH would be required of me.

It’s for this reason that I’m NOT the CEO because I have no clue how to run a company of that caliber and size. It would be a disaster.

it’s no different than why so many lottery winners and pro athletes end up blowing through their dough and filing bankruptcy. They’re either NOT geared to handle the responsibility or have never been taught, or both.

So to try and answer the dentist’s question about what he should do first starts with his financial knowledge. How much does he have?

I’d hate to recommend a list of things to him and then he end up worse off that he started.

What would most people do with an extra $10 million in the bank?

3 Questions You Should Answer Before Investing $10 Million Dollars

Before considering investing your $10 million dollar windfall, you may want to answer these three questions first:

#1 What Financial Goals Do I Want To Accomplish?

financial goals

One of the first questions I ask new Passive Investor Circle members has to do with their financial goals.

Unfortunately, most either don’t have any or the ones they do have are very vague such as:

  • I want to retire early
  • I’d like some passive income
  • To become consumer debt-free at some point

Financial goals will be the roadmap to help you create your investment plan.

How will you be able to accomplish these goals without a clear direction?

You won’t. 

Consider what you’re trying to accomplish financially and be as specific as possible. 

For example, you may want to generate X amount of monthly cash flow through passive investments. 

By setting clearly defined goals, you’ll be able to decide the best ways to invest your money.

#2 What’s My Timeline?

After you have your specific financial goals in place, it’s now time to create a timeline to reach those goals. 

One of the questions you must answer is how long do you plan on holding your investments?

If you’re attempting to invest for retirement, then your focus will be more on longer term options depending on your age.

On the other hand, if you will need to access your money within 3-5 years, then focusing on a short-term strategy works best. 

#3 What’s My Risk Tolerance?

For those that couldn’t sleep at night knowing that they could potentially lose some of their investment, their risk tolerance would be on the low end.

But if you could stomach losing a portion or maybe even all of your investment, then you’d tend to have a higher risk tolerance.

Each person will be different. 

What To Do With 10 Million Dollars

I reached out to a handful of people and also searched online for what most would do if they had a large sum of money hit their account. It’s amazing to see all of the different responses. 

Here’s a few that stood out to me:

#1 Tithe/Give everyday millionaires

It was nice to see that many of the people stated they’d focus on giving instead of spending first.

Most of the wealthy people I’ve studied along with everyday millionaires are givers.

To me, giving shows that you have faith that you’ll ALWAYS have enough to meet basic needs. 

I think $10 million dollars should do the trick?

#2 Invest conservatively

Some folks felt that even if a person went very conservative investing the $10 million dollars by using bonds and averaged over time a not unrealistic small return of 3%, that’s $300,000 every year.

As long as the bond market continues a steady return, this wouldn’t be a bad option at all.

#3 Pay off debt

Those that had high consumer debt (credit car, cars, etc.) and/or student loans would use their windfall to get rid of it. Most dentists/physicians are graduating with an average of $300K+ in student loan debt.

Getting rid of this as quickly as possible is the key to financial success whether you get a large sum of money or not. 

#4 K-I-S-S investing

Some of the DIY investors would keep it as simple as possible placing the majority of their $10 million dollar gift in a low cost index fund such as Vanguard’s S&P 500 index fund.

The S&P 500 is a stock market index that tracks the stocks of 500 large-cap U.S. companies (that’s about 6% of all stocks traded globally).   

An investment in only this one index would give you instant diversification along with a very good chance of making a profit.

Historically, the S&P 500 has had an average of a 10% annual return. 

Something else to consider is that if you plan on doing the investing yourself and skipping the middleman (financial advisor), you’d save yourself $100,000 to $300,000 in fees annually.

#5 Live a little

what to do with 10 million dollars

Sam over at the Financial Samurai listed ways he’d handle an extra $10 million dollars in his account. 

He stated that he’d take 5% of it ($500,000) and let loose by spending on various things such as:

1) build new products onto the Financial Samurai platform such as a mobile app for $30,000

2) perhaps buy a Range Rover Sport HSE in two years when my Honda Fit lease is up for $70,000

3) buy a first class around the world luxury cruise for my parents for $60,000

4) build a ~750 sq ft extension on my house with a couple decks that will cost $200,000

5) remodel my parents’ kitchen and bathrooms in Honolulu while they are on their world cruise for $130,000

6) buy some new tennis racquets for $400

7) buy some new clothes since I haven’t been shopping in five years for $2,000 (come on Sam!)

8) replace a couple sofas for $7,000

9) try some new fancy restaurants with friends for $2,000

Here are some other ways that people would have fun with their windfall:

Travel across the country first then book a trip around the world.

Visit exotic beaches.

Eat at the finest restaurants money could buy.

Attend the championship game for each sport:

  • NFL
  • NBA
  • MLB
  • NHL
  • NCAA Football and Basketball
  • The Masters

#6 Hedge funds

A handful of people that I reached out to about what to do with 10 million dollars mentioned that they’d take a portion of it and invest in hedge funds.

Mainly because they’d never had the assets that allowed them to do so in the past. 

For the most part, a hedge fund is a partnership of investors that use high-risk investing strategies to produce high rates of return.

One of the most well known hedge fund managers is Ray Dalio. His book, Principles: Life and Work, is a great read.

Hedge funds can include various assets such as:

  • stocks
  • options
  • currencies
  • commodities
  • bonds
  • real estate

#7 Real estate

self storage

Another way to invest a portion of ten million dollars is to purchase real estate. You could choose to do this either as an active investment (you’re the landlord) or as a passive investment, such as a syndication

Related article:Passive Investing vs Active Investing – Which Is Best?”

Depending on the market you choose to invest in, it’s possible to yield as much as a 7 – 9% return from the annual cash flow.

If you choose to go the active route, you could leverage say a million of the ten million and purchase an entire self storage complex (or apartment building) yourself. 

With ten million bucks, the options are unlimited.

What Would You Do With An Extra $10 Million Dollars?

I hope you’d consider joining the Passive Investors Circle first if you plan on using some of it with real estate investing.

If not, you maybe sorry…..


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