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If I were Filthy Rich
By lintfilms
+35 How Would You Protect Your Money?

In this day and age with bank failures and the Congress threatening to default on the US national debt how would you go about protecting a jackpot win?

Unlike the uninsured depositors at failed SVB in the news today who have been bailed out, I would not count on a bail out, I would not keep the money in a single bank account that is for sure, but I might keep a portion of cash diversified in several insured bank accounts using what was formerly known as CDARS and is today known as the IntraFi Network. Up to $50 million can be protected with FDIC insurance by spreading deposits amongst several banks managed from a single account at a single bank in the IntraFI network as I understand it, but given the potential for the US government to default on the national debt with a vocal minority in the current House majority prepared to default by not raising the debt ceiling I don't believe I would keep all eggs in that particular protection basket.

I also believe the systemic risk such a default causes for the stock market globally means that diversifying into sovereign debt of other A rated government bonds internationally may be an intelligent diversification strategy to protect the cash of a jackpot win in this environment, but that too doesn't feel like enough diversification to protect the money.

I believe investing some of the cash into the commodities market by purchasing ETFs that hold physical gold and silver might be a wise move to de-risk potential losses in this environment, but because I believe that may not be enough, diversifying cash holdings into offshore bank accounts in fortress banks unlikely to fail in Singapore, Switzerland, the Cook Islands, and Lichtenstein may also be a wise strategy, despite the increased paperwork requirements for reporting overseas accounts to the IRS and I believe FinCen as well, this might be part of an appropriate strategy to prevent losses. I mean investing in commodities like gold and silver is risky, but in this environment I think keeping some of the money invested in those assets could be a smart hedge against losses including inflationary losses.

Some of the winnings should of course be at risk in the stock market, what percentage, I do not know, but I would probably invest in Vanguard's Total Market Index, I am not sure how I would invest in foreign sovereign debt, but it would probably be through a Vanguard style index fund focused on the kinds is low risk sovereign debts that would diversify holdings outside the US because geographic risks associated with the Congress playing chicken with the national debt seems like it should be hedged against. That is just my thoughts, but I would love to hear how others would protect a win in this environment.

Recent responses

+18 @shakeyjake Large private wealth investment firms provide insurance over and above the SIPC. This is often called excess SIPC insurance and is purchased by the custodian of your funds.

+15 @AliciaRyann Intrafi/Cdars gives you a list of banks (a total of 200 of them to get to 50 million insured). So each of those banks you can also get a checking and savings. That means $150m now safe. I have 3 kids so I (owner) can have $750K safe per account that equally leaves to my beneficiaries (in a trust) x 200 banks. That means now I have another $150M. $300M safe. Last, an individual retirement account, if single. That means $350M “cash” easily fdic insured. If married, much much more. An addition 5 accounts ($250M) will be fdic insured. $600M. IF more, I’ll leave money in $250K slivers to more beneficiaries in revocable trusts ~ family, friends, charities, churches. That will protect (under fdic) $50M per beneficiary.

+14 @fappyday Option 1: diversify investments in various sectors with a focus on stable long-term growth, purchase physical assets (eg, real estate), and sack away some walking around money into a few different bank accounts. Option 2: purchase gold bullion and stash it in a vault protected by a convoluted system of lasers, floor sensors, cameras, motion detectors, armed guards, etc., and wait to become a victim of an equally convoluted heist executed by a quirky ragtag group of misfit con artists.