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 16-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 the different ways they’d spend that much money.

When was the last time you’ve done that?

It’s been a while hasn’t it? 

Not too long ago, I had a dentist reach out to me who 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 that much cash. 

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 call from Amazon’s corporate office today informing me that I was chosen as Jeff Bezos’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.

The sad part is that it’s no different than why so many lottery winners and pro athletes end up blowing through their dough and filing for bankruptcy. They’re either NOT geared to handle the responsibility or have never been given investment advice, or both.

To begin to answer the dentist’s question regarding what he should do first starts with his financial situation and financial knowledge. How much does he have?

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

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

Let’s find out…

3 Questions You Should Answer Before Investing $10 Million Dollars

Before considering a luxurious lifestyle and investing a $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 needs or goals.

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

  • Early retirement would be nice
  • I’d like some extra income
  • To become debt-free at some point

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

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 multiple sources of income or fund your first real estate investment.

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

#2 What’s My Timeline?

After you have your specific financial goals in place, it’s 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 income, 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 who couldn’t sleep at night knowing that they could potentially lose any 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 is 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.

Many of the high-net-worth individuals 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 felt that the best option was conservative investing. If they invested $10 million dollars in government bonds or corporate bonds and averaged an unrealistic 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. Having a $300K/year withdrawal rate isn’t bad!

#3 Pay off debt

Those that had high consumer debt (credit cards, 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 this paid off as quickly as possible is the key to financial security whether you obtain 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 low-cost mutual funds 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 a diversified portfolio along with a very good chance of making a profit.

Historically, the S&P 500 has averaged a 10% annual return. 

Something else to consider is that if you plan on doing the investing yourself and skipping the middleman (financial planner), 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 his 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 of sofas for $7,000

9) try some new fancy restaurants with friends and family members 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 for higher yields, such as 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 uses 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 https://www.debtfreedr.com/real-estate-syndication-4/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 may be sorry…..

Join the Passive Investors Circle


I’ve just come into a lot of money, specifically 10 million dollars. Should I consult a financial advisor before making any decisions?

With that kind of money, it’s essential to consult with a financial advisor or wealth manager who can offer guidance tailored to your situation. They can provide thought-provoking questions and strategies to ensure your nest egg grows and is protected from tax implications and other potential pitfalls.

Is it wise to deposit such a large amount of money into a regular bank account in the United States?

While it’s good news to have 10 million dollars, depositing the entire amount into a regular savings account might not be the best strategy due to low interest rates. Consider diversifying by placing some funds in high-yield savings accounts, tax-advantaged accounts, or other financial institutions that offer better returns. Additionally, be aware of the FDIC insurance limits for bank accounts.

How can I ensure a steady income stream for a long time with this amount of money?

Diversifying your investment portfolio is key. Consider allocating portions of your funds into real estate investments, private equity, real estate investment trusts (REITs), and even starting a small business. These can provide multiple income streams. Also, explore insurance products that can offer both protection and an income component.

What are the tax implications of having such a substantial nest egg, and how can I minimize capital gains?

With this much income, you’ll likely face significant tax implications. It’s crucial to understand the tax consequences of any investment or purchase, whether it’s real estate, private equity, or even a new car. Financial sites and advisors can provide guidance on tax-efficient strategies, such as investing in tax-advantaged accounts or understanding the benefits of limited partnerships.