What should I do if I suddenly have 2.3 million dollars (net) from a lottery winning? by #KylePhoenix

You should hopefully have a salary from the previous year, maintain that by calmly staying at your job.

The Truth
$2.3 is only the value of several of the upper managers decade long salaries and/or investing in a 401k.

You're not rich. But in 20 years, you could be….

Getting the Money/Lotto Check

With an LLC, or a trust, you might get your taxes down from 50% to maybe 25%.
Lets be optimistic and say you walk away with $1.6 after taxes.
Go to work, you're not rich.

• $40k a year x 40 working years is $1.6 million.
• From your job, immediately change your 401k to the max of $18k a year, say 30% or more of your salary.
• A separate checking account that deposits into a Roth IRa. $100,000. You never touch the account. You calculate money market interest and maybe add another $5000 to float the account. You will never touch this account, this is one of your retirement accounts.
• You've spent only 100k.

Go to work.
Now, do something completely un-American, illogical to your family, friends, coworkers.

Learn What Money Is
Take weekend or night classes in becoming a certified financial planner.
You do not have to become what you receive an education in. But you'll get an acceleration in finance. You'll enter the top 10% of Americans understanding money.

NYU has a professional class, 6 classes, less than $1000 a piece, 6 months. Taxation, insurance, investment, math. If your city doesn't have a class do it online. I've taken the NYU classes, they're fantastic!

While a home is not an immediate asset, it can be used as leverage. Keeping your job gives you income history so that you don't have to use cash. Your home should be 7 times your salary of the job you still go to. Lets call that $250k with you spotting 20% on the down payment from your winnings. Know that this is your first house/condo that you're going to occupy for five years and rent out when you leave. Your future tenants will pay off your home, your job will pay off your home.

• You will have paid say $50k off of $250k, $200k is the balance or $1200 a month.
• Your $1.6m, now 1.450$ million is just sitting in a money market account. Interest rates are 3%.
• That's about $50-60k in just interest.
• Lets call it $$43,500 in interest a year----that's your mortgage payments, the interest.
• Even at 1%, it is still $14,000, so you'd have to add $500 a year from your $18k lowered salary.
• You're probably taking home $1000 a month from your job so money market interest, not principal covers your living expenses.

Which is why you don't chunk invest the amount, you need the bits of interest it sloths off as you invest small slices.

Your first job around your money is to make your money make more money.
First the classes teach you what money is.

Second I would shop for a basic business. Chinese restaurant, grocery store, gas station. Nothing exciting.

Don’t Do This

I know this one personally: My mother ventured from a modeling business and shows to a boutique. In a strip mall. In the mountains of a seasonal tourist community....next to a a fish, bait and tackle store.
Lingerie, massages, etc.
Closed in 3 months.

I was a college sophomore so I didn't understand what a mistake it was but now I understand not to buy from glitter dream businesses.

Martha Stewart
Martha Stewart catered for years after addicting the town to her pies long before the books or show or home-style lines.

Go to work.

Small Business Silent Partner

As you look for a small business to silent partner in or own and hire an experienced manager. No relatives. Give wonderful recommendation letters but refrain from giving them jobs directly. Gift money but I wouldn’t gift more than a months’ salary to friends/relatives (max of three). If a month’s salary can’t solve their problems, they are the problem. Also this will probably be under $10k which means it won’t trigger a taxable event for them. People shout about giving away money—-hundreds of thousands of dollars and then the IRS taxes the recipient at their tax rate of 35% to 50%. lol It would’ve been faster just to write the check to the IRS.

Become A Business Owner—-Lite and Smart
Go into the simplistic, repetitive, turnkey business that is unsexy.
Have you ever seen a Chinese restaurant go out of business?
Ads in local Chinese papers, let loan officers at Asian banks know you're looking to silent invest.
I'm brown as the floor.
I wouldn't open a soul food restaurant. I'd approach the corner Chinese spot about expanding, putting in some tables and staying open later.
$50k would be my max.

An Idea I’m Exploring

Here in Manhattan, there's a pizza place, maybe 20x20 for sale for 35k. I've thought about buying it and converting it to a hot and cold 24 hour spot---coffee, breakfast, sandwiches, soup, roast chicken, turkey, meatloaf, burgers, salads. Prepped meals. $7-10 for a meal and drink .
Why there?
Big police precinct 6 doors down, new apartment complex across the street, banks, train, etc .. I'd rename it the Blues Light, put up some blue strobes and give everything with a badge 25% off. 200 plus people work at the precinct. I'd give a sampling of three days to the precinct shifts, the building and nearby middle and high schools.

A 10k food investment the first week and it would be a great little engine of return on 35-50k for the rest of my life.

All I would need is $35-50k in profit salary, I'd immediately deposit 18$k in that LLC's 401k and use the rest to buy the building above it and charge my own store rent from one LLC to the other.

Still got a job and still got at least $1.4 million. ($40k in interest a year)

The goal is to use the money as springboard.
Going to work every day keeps you grounded.

Food and the Future

I would set up another account and automate Fresh Direct, one to pack my pantry/house basement with a couple of years of staples. Water, rice, juices, chips, cookies, favorites, etc. Freeze meats, sauces, etc. Shop in your home. Done right your could splurge and have $50k over 5 years, which lowers food costs for the next 20 when you have a pantry. Only buy fresh seafood, vegetables and fruits as you slowly build out a garden in your backyard on a community space. You’re long term lowering your expenses and improving your health.

Car or SUV or RV

I live in NYC. I'm currently torn at buying a car. I'm looking at a mini SUV to travel for a book tour (a Bronco II I had one in college and loved it to bits)---I priced a rental at $25k a year but all problems are on Avis or a used one for $2400, both I can purchase through my company. Maybe NYC dampens the American car obsession so while I've owned cars I don't link them to my manhood, freedom or convenience. Though I have started looking at RVs. I wrap that up by saying you see how much I would spend to own a car right? I’d only spend higher than maybe $10k if I could take it as a deduction against one of my businesses. Used. Deduction. Functional. If you want to buy a car that should be your mantra.

Real Estate Portfolio
I would take real estate investing classes and buy 1 property for every 10 I like of 100 I see in multiple cities. Detroit, Charlotte, Newark, san Diego, I'd make that my weekend job and give myself a LLC for investing with 400k in it. My goal would be a portfolio of 100 properties with a value of 10 to 25 the cash. That challenge would take learning and skill development.
Still $1 mil in the bank.
I'd show up at work and have great weekends and a mini suitcase for my trips.

Askers for Money?
No.
N
O
Period.
Complete sentence.
That's how you deal with people.
And get the fuck away from my desk at work. I'd walk you into a senior managers office and tell you to ask for some of their 401k, stock options.
If I'm not interested in giving, know you're going to get your feelings hurt.

Retirement? What FORM of Retirement, You Decide
Depending on how long it took to learn finance, real estate and then scope out deals, 2.3$ million after taxes means you have to work at least 3-5 more years at your job. But done right, you could leave at the end of 5 years with a multi million dollar portfolio and a minimum of $100k a year in passive cashflow salary. That would be my goal and still have a million in cash just sitting in another account, not to be touched until a well vetted medium to big deal comes along, like a multi unit apartment building with immediate cashflow.

The Plan in a Nutshell

1. Understand (learn, formally) money.
2. Make money make money.
3. Legacy money.

The Future and Giving, Getting Rid of This Huge Nest Egg

Then I'd start a family trust for educational tuition (grade dependent) and home buying down payments (within their current salary range of 7x). Perhaps for children max out gift giving at $11k a year into something that would accrue to half a million or more in 25 years.

I'd slowly drain out my cash and transfer LLC shares to family, children and charities over 25 years, past 20 years from receiving $2.3m, to avoid estate taxes upon my death.

I'd insure myself up the whazoo for maybe $10 million to cover my own paper debts and to give children cash so they wouldn't need to legacy liquidate portfolios and they could replicate this process at the next level.

#KylePhoenix , author of several books.

#TheKylePhoenixShow , host and producer available online.