This is a great thread. Throwaway also. Gonna write some stream-of-consciousness here, because I have to start my work day, but I personally made approx. this amount from an exit, and it has gone very well for me and my family (wife + 3 kids). Some additional fine-tuned advice of what worked for me: (1) don't be afraid to spend money - high hourly rates - for a good accountant and good tax attorney. (2) if I were you I'd sign up for a couple different brokerage accounts (e.g., Charles Schwab and one other) and split the money between them. It takes almost no time to do this, and it's nice to have some diversity there in case something catastrophic happens to one of them and your assets are locked up for a long time while it gets sorted out. (3) as others have said, just buy US treasuries (interest rates are good right now) while you sit back and
think about it. (4) Eventually if you're not into picking things yourself, you'll just want some healthy mix of asset classes, which (5) you'll learn about by reading some books. (6) Those brokerages will put someone on the phone with you and help you buy the treasuries, if that's confusing. (7) The
one thing you want to avoid is letting the brokerages sell you their own personal wealth management. Everyone from your bank to your brokerage will try to sell you the "we'll help you for 1% of your money per year" -- avoid this. Suddenly 10 years have gone by and $800k-ish of your $8million is in someone else's hands, who simply threw darts at a dartboard and did their best to obfuscate their performance during bad times. (8) AVOID PRIVATE INVESTMENTS. Unless you're a professional private equity investor, don't buy a piece of that friend's restaurant, that store that's opening up, that tech startup, whatever. This money tends to disappear. If you're ok losing money to support your cousin who's starting a new company, just give them some money and be honest to yourself and them about the whole thing (not that I advise this either, but don't confuse charity and investment.) Just don't invest in private stuff. The problems with private investments: (a) you lose all liquidity, (b) markets aren't efficient so you can actually do a veeeeery bad job, (c) it can get personal and/or skeezy. So seriously, avoid any kind of private investments. (9) Avoid starting your own business and pouring all your money into it. People tend to burn through windfalls in that way and regret it. (10) Don't race into fancier real estate. (11) Make no lifestyle upgrades at all during the next year. (12) Take your time with charities. It can be a fun family project in the years to come to pick charities together. You'll have income in many years from this money, so you're not missing an opportunity for deductions by not giving money in the first year. (13) OH ! When signing up for brokerages, don't enable options or margin trading. In addition to this being dangerous for you, I believe it allows them to be funky with your cash and holdings, and it complicates your relationship with the brokerage should they or a bank they work with ever go under. (14) don't rush into estate configuration, just start with a simple will. Then consider trusts and things like that in future years. From my and my friends' experiences, they tend to overcomplicate things. (15) TELL AS FEW PEOPLE AS POSSIBLE. (16) Keep working, but only on something you enjoy. (17) Stay or get in shape. Your body is more important than money.
Seriously, AVOID PRIVATE INVESTMENTS.
Kobe Bryant on taking care of family after a windfall: "You will come to understand that you were taking care of them because it made YOU feel good, it made YOU happy to see them smiling and without a care in the world — and that was extremely selfish of you. While you were feeling satisfied with yourself, you were slowly eating away at their own dreams and ambitions. You were adding material things to their lives, but subtracting the most precious gifts of all: independence and growth."
https://www.theplayerstribune.com/en-us/articles/kobe-bryant...