Winning the lottery: This is how a wealth manager would invest 10 million

Winning the lottery: This is how a wealth manager would invest 10 million

Christian von Bechtolsheim manages billions of dollars in assets and writes regularly for Business Insider.

An iron worker from North Rhine-Westphalia recently won ten million euros and bought a Porsche and a Ferrari, among other things.

Unfortunately, it is a “frequent occurrence” that people tend to return sudden wealth to people, says wealth manager Christian Freiherr von Bechtolsheim.

His advice: “First plan a budget and leave room for crazy things. However, the lion’s share should be invested in such a way that you can live profitably and profitably.

I recently read about a lottery winner from North Rhine-Westphalia who was able to collect an impressive amount of almost 10,000,000 euros.

According to his own statement, this “Hans im Glück” went out happily shortly after the payment to buy a Porsche and a Ferrari. He did not seem to accept the fact that this, for him as an iron worker, was previously unusually rich and raised questions in the circle of his friends, but to be happy: “Everyone should see how rich I am,” he said “picturehe was quoted. At the same time, however, our lottery winner seems annoyed by the rapid increase of new “friends”. Especially since the sudden prosperity aroused great desire.

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A Porsche can also be a good investment

So that I don’t get it wrong here as a complete fun killer: unexpected luck and cars are given wholeheartedly to a lucky person – especially since in the past such cars can also be a good investment. However, I suspect that fun in particular should play a role here.

Unfortunately, it is a common thing that the so-called nouveau riche, or to put it more respectfully, people without proper financial experience, are in a hurry to bring their sudden wealth to the people. A matching circle of friends then makes others.

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Many athletes, actors and lottery winners often lose their luck

One of the most important insights from my professional life is that young people in particular, who are often very likable and equally sympathetic, are not very intelligent. The dangers that threaten wealth are often overlooked. You get used to a fast life and suddenly your financial resources are gone. An example that went a long way in this direction was the successor of Krupp Arndt von Bohlen und Halbach, who despite constant appanage, constant financial contribution to the high style, always suffered from lack of funds. The temptation was great.

Many athletes, actors and lottery winners often lose their luck and, as in the fairy tale “Fisherman and his wife”, they have to endure a difficult nature to return to “Pissputt”, a poor hut. That this causes feelings of depression should be clear.

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This is how I would split a million deposits

My advice: set a budget first and leave room for something crazy. However, the lion’s share should be invested in such a way that one can live on interest and dividends, which should be possible for ten million euros. A current income before tax of at least 300,000 euros per year should be found here. With assets of one million euros, it should at least be possible to earn extra income towards the cost of living.

High income is possible for years, depending on risk tolerance and investment form, but it should not be lived out, but set aside.

Some examples of possible property structures can be seen in the diagram:

Business Insider / FOCAM AG

But basically the lottery winner is not my thing and he deserves a completely hedonistic way of life. To paraphrase George Best, the Manchester United professional who soon became known more for his lifestyle than his performance on the pitch: I got a third of my wealth from alcohol, a third from women. I wasted the rest to no avail.

*Christian Freiherr von Bechtolsheim is a founding partner of Focam AG. He manages the great wealth of well-known entrepreneurial families and foundations. He is also the co-author of the book “Wealth Means Responsibility”. Von Bechtolsheim writes the financial column “Money & Values” for Business Insider.

Disclaimer: Stocks and other investments always involve risk. Total loss of invested capital cannot be ruled out either. Articles, data and forecasts published are not an invitation to buy or sell securities or rights. They are also not a substitute for professional advice.