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Hi Barefoot,

I’m in the fortunate position of being about to receive a windfall on the sale of my business of $10 million. This is great but I don’t want to stuff it up from here! I’m only 45, with a wife and four kids, and I don’t know how to invest this. I’ve been badly burnt by financial advisors in the past so I’m reluctant to hand any of it over to some random to control. What should I do? Our only asset is our family home, worth $1.4 million with a loan of $700,000. What should I do?

Tom

Hey Tom,

Great stuff!

With ten big ones (well, call it nine-and-a-bit after you pay out the mortgage and buy some fancy stuff like cars, holidays and thermomixes), you need to have a strong understanding of what tools you need. Otherwise the finance industry will be very happy to sell you expensive magic wands.

With that in mind, here are a few things to think about:

Getting rich is different to staying rich:

You got rich by stacking all your chips on one business, but to stay rich you’ll need to spread your chips across thousands of businesses – preferably by investing in low-cost domestic and international index funds.

Don’t sell the farm:

Think of your share portfolio like a farm that provides you with a golden harvest of dividends each year (in your case around $300,000 a year!). Spend the yearly harvest, but never, ever sell the farm.

Get yourself a lawyer, son:

Even if you spend all your dividends, your kids still stand to inherit a $30 million (or more) fortune in the future. A family trust can help both protect your assets and minimise their taxes. You’ll need a lawyer for this.
Finally, keep working:

You need to find something that gets you out of bed each morning. This time round you don’t need to do it for the dough, though. Do it to make a difference.

Scott.