{"id":2102,"date":"2012-08-30T07:02:05","date_gmt":"2012-08-30T11:02:05","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=2102"},"modified":"2012-08-30T07:02:05","modified_gmt":"2012-08-30T11:02:05","slug":"simple-money-advice-when-you-hit-it-big","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=2102","title":{"rendered":"Simple Money Advice When You Hit It Big"},"content":{"rendered":"<p><a href=\"https:\/\/i0.wp.com\/kerryhannon.com\/wp-content\/uploads\/2012\/05\/forbes2.gif?ssl=1\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" data-attachment-id=\"1433\" data-permalink=\"https:\/\/kerryhannon.com\/?attachment_id=1433\" data-orig-file=\"https:\/\/i0.wp.com\/kerryhannon.com\/wp-content\/uploads\/2012\/05\/forbes2.gif?fit=300%2C300&amp;ssl=1\" data-orig-size=\"300,300\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;}\" data-image-title=\"forbes\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/i0.wp.com\/kerryhannon.com\/wp-content\/uploads\/2012\/05\/forbes2.gif?fit=300%2C300&amp;ssl=1\" class=\"alignleft size-thumbnail wp-image-1433\" title=\"forbes\" src=\"https:\/\/i0.wp.com\/kerryhannon.com\/wp-content\/uploads\/2012\/05\/forbes2.gif?resize=150%2C150&#038;ssl=1\" alt=\"\" width=\"150\" height=\"150\" srcset=\"https:\/\/i0.wp.com\/kerryhannon.com\/wp-content\/uploads\/2012\/05\/forbes2.gif?resize=150%2C150&amp;ssl=1 150w, https:\/\/i0.wp.com\/kerryhannon.com\/wp-content\/uploads\/2012\/05\/forbes2.gif?w=300&amp;ssl=1 300w\" sizes=\"auto, (max-width: 150px) 100vw, 150px\" \/><\/a>As I write this<a href=\"http:\/\/www.forbes.com\/sites\/kerryhannon\/2012\/08\/19\/simple-money-advice-when-you-hit-it-big\/\"> column<\/a>, the winner has not come forward to claim the $337 million share of the Powerball Lottery this week. I bet the winner will opt for the one-time cash award of $224.66 million, before taxes.<\/p>\n<p>These kinds of mega-paydays intrigue me.<\/p>\n<p>A few years ago, I interviewed Tomorrow Rodriguez, who won $1 million on the TV game\u00a0show\u00a0<em>Deal or No Deal<\/em>.<\/p>\n<p>\u201cFirst I was in disbelief,\u201d she told me. \u201cThen I knew I didn\u2019t want to just blow it.\u201d \u00a0The mom of three had been living paycheck-to-paycheck and had thousands of dollars in debt from school loans and more\u2026 until that confetti-strewn day.<\/p>\n<p>So what do you do with all that money when you hit it big? \u00a0I might buy some horses, go on a \u2019round the world trip, perhaps. Take my mom along, too, if she\u2019s up for it.<\/p>\n<p>As I was daydreaming, \u00a0I recalled \u00a0a conversation I had with Brian Woods, a partner at\u00a0<a href=\"http:\/\/www.geierfinancial.com\/home2.aspx?spid=109157&amp;ptype=HOME\">Geier Financial Group<\/a>, an elite wealth management firm in Marriottsville, MD. The firm manages over $145 million dollars for approximately 180 clients both athletes and non-atheletes. It breaks down to\u00a0roughly 45 retired athletes and 20 active players, Woods told me.<\/p>\n<p>Woods and \u00a0the firm\u2019s advisors have worked with athletes like Cal Ripken, Eddie Murray, Brookes Robinson, Jeff Ballard,\u00a0\u00a0Steve Finley, Armando Benitez, Melvin Mora and Maryland native and New York Yankee Mark Teixeira.<\/p>\n<p>They help them with lots of financial doings. These include:<\/p>\n<ul>\n<li>How to structure an athlete\u2019s\u00a0finances to compensate for his short career span and unpredictable income<\/li>\n<li>How to\u00a0position an athlete for a second career after his active playing days have ended<\/li>\n<li>How to limit excessive and\u00a0impulsive spending<\/li>\n<li>How to avoid becoming a bank to his family and friends<\/li>\n<li>How to\u00a0sift through the complex tax and estate issues<\/li>\n<\/ul>\n<p>You don\u2019t have to be a star athlete or a lottery winner to need this kind of help. Many of us 50-plusers are in the same boat\u2013looking for new careers, helping our aging parents (who may or may not see us as their personal ATMs) and more.<\/p>\n<p>Some themes came out of my \u00a0talk with Woods that I found interesting in terms of the lessons to be learned from how he advises these big leaguers\/big egos, who often have a short window to cash in, and then have to be ready for what\u2019s next.<\/p>\n<p>In truth, the advice applies to a wide range of lucky peeps.<\/p>\n<ul>\n<li>Anyone inheriting a windfall<\/li>\n<li>A lottery winner<\/li>\n<li>A game show prize winner like\u00a0Rodriguez<\/li>\n<li>Someone who has a big signing bonus for a bank or Wall Street firm<\/li>\n<li>Anyone who has the good fortune to be earning some big bucks for a short period of time, particularly early on in their careers<\/li>\n<\/ul>\n<p>I\u2019m not suggesting these tips are breaking news, but advice worth mulling. Here they are in no particular order. My colleague Deborah Jacobs has more on this in her post\u00a0<a href=\"http:\/\/www.forbes.com\/sites\/deborahljacobs\/2012\/02\/11\/10-things-to-do-when-you-win-the-powerball\/\">Ten Things to Do When You Win The Powerball<\/a>.<\/p>\n<p><strong>1. Don\u2019t go it alone<\/strong>. Hire an accountant and advisor. For ways to find a planner, go to\u00a0<a href=\"http:\/\/www.forbes.com\/sites\/kerryhannon\/2011\/03\/16\/how-to-find-a-financial-planner-in-six-steps-to-ease-your-retirement-fears-and-more\/\">my post here<\/a>. They can help you set aside\u00a0funds to cover future\u00a0income taxes and to pay off any consumer debt you might have.<\/p>\n<p><strong>2. Don\u2019t buy or build a McMansion.<\/strong>\u00a0Skip the 20,000 square foot dream house. Live nicely, but narrow the big eyes. You\u2019ll find you\u2019re paying $100k a year just to cover homeowner\u2019s insurance, taxes and other upkeep. When you stop making the big money and that can happen fast if you\u2019re injured in the case of an athelete, the house still costs as much to keep up. It kills your cash flow.<\/p>\n<p><strong>3. Don\u2019t swing for the home-run.<\/strong>\u00a0Say no to trendy investments like a restaurant, a bowling alley, doggy daycare that might involve leverage. Only invest if you think you can give 110% of your focus to that business. Your business is your current high-paying job\u2013whether a ball player, or trader on Wall Street. That\u2019s where your full attention needs to be.<\/p>\n<p><strong>4. Hit singles.<\/strong>\u00a0Ignore the guy in locker next to you bragging about his gee wiz investments. Be boring-investing for long-term. 4 % is pretty good these days. Might even be 60% fixed income, then dividend paying stocks, cash, and a little bit equities with upside. Plain vanilla will build the base. \u00a0Game show winner Rodriguez had a certified financial planner in the USAA Wealth Management division help her\u00a0make conservative investments in certi\ufb01cates of deposit and other insured\u00a0accounts, while creating a diversi\ufb01ed, long-term investment plan.<\/p>\n<p><strong>5. Make a difference.\u00a0<\/strong>Set-up a private foundation, or if you\u2019re philanthropic, you might consider opening a donor advised fund. You will want to seek some financial advice on the nitty-gritty. In general, minimum investments typically range from $5,000 at, say, Fidelity and Schwab, to $25,000 at Vanguard.<\/p>\n<p>You might not have several millions to establish a foundation, T. Rowe Price Senior financial planner Christine Fahlund says. But this way you create a charitable account to distribute grants under an umbrella name like The Smith Family Fund. You get the immediate charitable deduction, and you advise those who mange the account where to make the charitable contribution\u2013The Red Cross, The Boy Scouts, your alma mater. There is no pressure to invest immediately. A lot of people prefer the money be invested and then passed down to next generation to distribute the charitable funds in years to come as they see fit, Fahlund says.<\/p>\n<p><strong>6. Lead not into temptation.<\/strong>\u00a0Resist phone calls for handouts \u00a0(even from close friends) and the allure of glittery jewelry and a flashy car. Everything in moderation.\u00a0Build family boundaries. Amazing how hard it is to say no to family requests. Learn to balance and plan for it. Of course, you will want to help out if you can in some situations, but step carefully here.<\/p>\n<p><strong>7. Invest in schoolbooks.\u00a0<\/strong>Set up education funds for kids and grand-kids.<\/p>\n<p><strong>8. Use a crystal ball<\/strong>. Review your life insurance needs.\u00a0Don\u2019t put off \u00a0your estate planning. Key documents to update are wills and medical power of attorney forms with a legal advisor .<\/p>\n<p>What would you do? I\u2019m eyeing real estate in the Virginia horse country. And no, I wouldn\u2019t dream of a McMansion. A wonderful old farmhouse, or log cabin, on some beautiful rolling acres and mountain vistas will do just fine\u2026along with a horse, of course.<\/p>\n<p>&nbsp;<\/p>\n<p><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/blogs-images.forbes.com\/kerryhannon\/files\/2012\/08\/image0023-150x15031.jpg?resize=75%2C75&#038;ssl=1\" alt=\"\" width=\"75\" height=\"75\" data-orig-height=\"75\" data-orig-width=\"75\" \/>\u00a0I\u2019m\u00a0the author of\u00a0<a href=\"http:\/\/www.amazon.com\/gp\/product\/0811871150?ie=UTF8&amp;tag=kerrhann-20&amp;linkCode=as2&amp;camp=1789&amp;creative=9325&amp;creativeASIN=0811871150\">What\u2019s Next? Follow Your Passion and Find Your Dream Job<\/a>, available here\u00a0<a href=\"https:\/\/kerryhannon.com\/\">www.kerryhannon.com<\/a>. I am a\u00a0MetLife\u00a0Foundation Journalists in Aging fellow. To learn about great jobs for retirees, check out my\u00a0<a href=\"http:\/\/www.aarp.org\/work\/experts\/kerry-hannon\/\">column\u00a0<\/a>at\u00a0AARP. My weekly column \u00a0at PBS\u2019s NextAvenue.org is\u00a0<a href=\"http:\/\/www.nextavenue.org\/expert\/kerry-hannon\">here<\/a>. Follow me on Twitter,\u00a0<a href=\"http:\/\/twitter.com\/KerryHannon\">@KerryHann<\/a>on<\/p>\n<p>More fun at Forbes.com!<\/p>\n<p>&nbsp;<\/p>\n<div><a href=\"http:\/\/www.forbes.com\/pictures\/eeli45fihk\/dont-make-rash-moves\">es<img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/specials-images.forbes.com\/imageserve\/0bsB84f9HTaOW\/176x176.jpg?w=640&#038;ssl=1\" alt=\"\" \/><\/a><a href=\"http:\/\/www.forbes.com\/pictures\/eeli45fihk\/dont-make-rash-moves\">Photos:\u00a0How To Plan For A Second Career<\/a><\/div>\n<div><a href=\"http:\/\/www.forbes.com\/sites\/janetnovack\/2012\/08\/15\/how-much-tax-will-you-owe-on-that-320-million-powerball-jackpot\/\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/blogs-images.forbes.com\/thumbnails\/blog_960\/pt_960_6050_o.jpg?w=640&#038;ssl=1\" alt=\"\" \/><\/a><a href=\"http:\/\/www.forbes.com\/sites\/janetnovack\/2012\/08\/15\/how-much-tax-will-you-owe-on-that-320-million-powerball-jackpot\/\">How Much Tax Would You Owe On A $320 Million Powerball Jackpot?<\/a><cite><a href=\"http:\/\/blogs.forbes.com\/janetnovack\/\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/blogs-images.forbes.com\/assets\/images\/avatars\/jnovack_40.jpg?w=640&#038;ssl=1\" alt=\"Janet Novack\" \/><strong>Janet Novack<\/strong>Forbes Staff<\/a><\/cite><\/div>\n<div><a href=\"http:\/\/www.forbes.com\/sites\/kerryhannon\/2012\/05\/18\/ten-things-to-do-when-you-lose-your-job\/\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/specials-images.forbes.com\/imageserve\/0erjbe27aRe21\/176x176.jpg?w=640&#038;ssl=1\" alt=\"\" \/><\/a><a href=\"http:\/\/www.forbes.com\/sites\/kerryhannon\/2012\/05\/18\/ten-things-to-do-when-you-lose-your-job\/\">Ten Things to Do When You Lose Your Job<\/a><cite><a href=\"http:\/\/blogs.forbes.com\/kerryhannon\/\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/blogs-images.forbes.com\/cache\/gravatars\/kerryhannon_40.jpg?w=640&#038;ssl=1\" alt=\"Kerry Hannon\" \/><strong>Kerry Hannon<\/strong>Contributor<\/a><\/cite><\/div>\n<div><a href=\"http:\/\/www.forbes.com\/sites\/kerryhannon\/2011\/08\/24\/want-an-unbeatable-resume-read-these-tips-from-a-top-recruiter\/\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/blogs-images.forbes.com\/thumbnails\/blog_1185\/pt_1185_2474_o.jpg?w=640&#038;ssl=1\" alt=\"\" \/><\/a><a href=\"http:\/\/www.forbes.com\/sites\/kerryhannon\/2011\/08\/24\/want-an-unbeatable-resume-read-these-tips-from-a-top-recruiter\/\">Want an Unbeatable Resume? Read These Tips from a Top Recruiter.<\/a><cite><a href=\"http:\/\/blogs.forbes.com\/kerryhannon\/\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/blogs-images.forbes.com\/cache\/gravatars\/kerryhannon_40.jpg?w=640&#038;ssl=1\" alt=\"Kerry Hannon\" \/><strong>Kerry Hannon<\/strong>Contributor<\/a><\/cite><\/div>\n<div style=\"padding-bottom:20px; padding-top:10px;\" class=\"hupso-share-buttons\"><!-- Hupso Share Buttons - http:\/\/www.hupso.com\/share\/ --><a class=\"hupso_toolbar\" href=\"http:\/\/www.hupso.com\/share\/\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/static.hupso.com\/share\/buttons\/share-small.png?w=640&#038;ssl=1\" style=\"border:0px; padding-top:5px; float:left;\" alt=\"Share Button\"\/><\/a><script type=\"text\/javascript\">var hupso_services_t=new Array(\"Twitter\",\"Facebook\",\"Google Plus\",\"Pinterest\",\"Linkedin\",\"StumbleUpon\",\"Digg\",\"Reddit\",\"Bebo\",\"Delicious\");var hupso_background_t=\"#EAF4FF\";var hupso_border_t=\"#66CCFF\";var hupso_toolbar_size_t=\"small\";var hupso_image_folder_url = \"\";var hupso_url_t=\"\";var hupso_title_t=\"Simple Money Advice When You Hit It Big\";<\/script><script type=\"text\/javascript\" src=\"https:\/\/static.hupso.com\/share\/js\/share_toolbar.js\"><\/script><!-- Hupso Share Buttons --><\/div>","protected":false},"excerpt":{"rendered":"<p>As I write this column, the winner has not come forward to claim the $337 million share of the Powerball Lottery this week. I bet the winner will opt for the one-time cash award of $224.66 million, before taxes. These kinds of mega-paydays intrigue me. A few years ago, I interviewed Tomorrow Rodriguez, who won [&hellip;]<\/p>\n<div style=\"padding-bottom:20px; padding-top:10px;\" class=\"hupso-share-buttons\"><!-- Hupso Share Buttons - http:\/\/www.hupso.com\/share\/ --><a class=\"hupso_toolbar\" href=\"http:\/\/www.hupso.com\/share\/\"><img src=\"https:\/\/static.hupso.com\/share\/buttons\/share-small.png\" style=\"border:0px; padding-top:5px; float:left;\" alt=\"Share Button\"\/><\/a><script type=\"text\/javascript\">var hupso_services_t=new Array(\"Twitter\",\"Facebook\",\"Google Plus\",\"Pinterest\",\"Linkedin\",\"StumbleUpon\",\"Digg\",\"Reddit\",\"Bebo\",\"Delicious\");var hupso_background_t=\"#EAF4FF\";var hupso_border_t=\"#66CCFF\";var hupso_toolbar_size_t=\"small\";var hupso_image_folder_url = \"\";var hupso_url_t=\"\";var hupso_title_t=\"Simple Money Advice When You Hit It Big\";<\/script><script type=\"text\/javascript\" src=\"https:\/\/static.hupso.com\/share\/js\/share_toolbar.js\"><\/script><!-- Hupso Share Buttons --><\/div>","protected":false},"author":2,"featured_media":1433,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[29,101,6],"tags":[124,75],"class_list":["post-2102","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finances","category-personal-finance-2","category-second-verse-blog-on-forbes-com","tag-lottery","tag-personal-finance"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/kerryhannon.com\/wp-content\/uploads\/2012\/05\/forbes2.gif?fit=300%2C300&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p3YFQS-xU","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/kerryhannon.com\/index.php?rest_route=\/wp\/v2\/posts\/2102","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kerryhannon.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kerryhannon.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kerryhannon.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/kerryhannon.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2102"}],"version-history":[{"count":2,"href":"https:\/\/kerryhannon.com\/index.php?rest_route=\/wp\/v2\/posts\/2102\/revisions"}],"predecessor-version":[{"id":2104,"href":"https:\/\/kerryhannon.com\/index.php?rest_route=\/wp\/v2\/posts\/2102\/revisions\/2104"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/kerryhannon.com\/index.php?rest_route=\/wp\/v2\/media\/1433"}],"wp:attachment":[{"href":"https:\/\/kerryhannon.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kerryhannon.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kerryhannon.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}