What to Do With a Cash Windfall

The current Mega Millions jackpot is at $168 million.

Anyone can buy the next winning ticket. What if it's you?

You might buy a home or car with your winnings. You will also want to fund your brokerage and retirement accounts.

What you won't do is lie awake and think about paying your bills anymore. But now you'll have a whole new set of concerns like paying more taxes, buying more life insurance, and donating more to charity. You’ll also want to keep your fortune intact.

Whether you come into your wealth suddenly or build it over time, the same principles apply…

Develop a Millionaire Mindset

The more you spend, invest, and give away, the more responsible you want to be about it. Just like you'd want organizations to be responsible with the money you trust them with.

When people are not equal to their money in terms of character, they lose it. You see this with lottery winners all the time. They win $300 million and go broke five years later.

It takes character to make and hold on to money. If you're not equal to your wealth, you'll blow it on stupid stuff and bleed it all over the place.

You've heard about celebrities like Johnny Depp who blew their fortunes on dumb stuff. Depp tried to blame his financial advisers. But they aren't the ones who blew hundreds of millions of dollars on houses and an island chain in the Bahamas.

What You Should Do with a Windfall

I tell people they can spend 10% of any windfall they get.

But what about the other 90%?

If you come into a big chunk of cash, the first thing you should do is look up JPMorgan (JPM), Morgan Stanley (MS), or another big reputable firm that offers private client services. They have teams of people who are equipped to help people with huge amounts of money.

They can set you up with accounts that give you an income of several million a year without ever having to touch the principal. If you want to give some of your money away, they can help you do that in a smart fashion, too.

And if you want to get an idea of how much to invest and what to invest in, start here.

Jared Dillian is an investment strategist at Mauldin Economics, a former head of ETF trading at Lehman Brothers, and the author of The Awesome Portfolio. Subscribe to his weekly investment newsletter, The 10th Man, and listen to his daily radio program, “The Jared Dillian Show.” You can follow Jared on Twitter @dailydirtnap.