Get Your Shark Shields Up

Ty is about to receive $5.7 million in an intellectual property sale. He isn't sure what to do with the money to make sure it's safe long term. Dave gives Ty the first steps he needs to take.

QUESTION: Ty in Nashville is about to receive $5.7 million in an intellectual property sale. He isn’t sure what to do with the money to make sure it’s safe long term. Dave gives Ty the first steps he needs to take.

ANSWER: The first rules is that shark shields are up. Keep the sharks away. One of the main ways you do that is you don’t put money in anything that you don’t understand. A simple bank account is okay for a while or money market accounts—stuff like that. You need to spread that out and do some things. The first rule is you don’t put money in anything you don’t understand.

The second rule is you go slow. You don’t go buying something sophisticated because somebody sounds cool. That’s how people lose their money. You go slow and you understand everything. You were given this money by God for you to manage—not somebody else. Don’t turn your baby over to somebody else to babysit it. Once we’ve said that, how are you going to know more?

You’re going to have to surround yourself with some people, and we need to almost form you a little board of directors of wealth advisors around you in different areas of finance. With each of them, you’re looking for someone wise with the heart of a teacher—not the heart of a salesman. You need a really good estate planning attorney. You need a good CPA or tax attorney. You need a real estate person you can trust because you’re probably going to buy some real estate. You don’t do anything these people say until they explain it to you and you understand it. You are not allowed to default to them because you feel intimidated. Go slow. You need a good insurance person to figure out different ways for you to insure yourself over and beyond the normal things that you used to do. You need a good investment broker. A lot of these are Endorsed Local Providers (ELPs) that you could sit down and talk to.

Obviously, I’m going to tell you to write a check and be debt-free on everything. That’s kind of a no-brainer, but you’ve still got millions and millions left after that happens. My goal, if I were in your shoes, would be to learn enough about mutual funds and learn enough about real estate and invest heavily in those two things so that that creates enough return. You should be able to create a $200,000–$500,000 annual income off of this money. This should turn into $50 million to $100 million by the time you retire if you invest it well and manage your investments well.

You need to systematically and consistently be doing giving. You need to understand what you’re giving to. You’re not allowed to feel guilty and then be sloppy with your giving because you feel guilty. You need to give intelligently. And then you need to spend some. You need to enjoy the spending. Set yourself a budget for that. It’s okay to spend some of it. You need to set yourself mathematical limits on that so that the rest is given and invested.

Trust your instincts. You have good instincts. Trust your wife’s feelings. She has good instincts.

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