Sometimes I wonder if I won a few million in the lottery, how would I protect it? There is news that a big company like Roku had $487 million with a failed bank (SIVB).

I wonder how the small investor protects their nest egg if it goes beyond SIPC limit and bank accounts if beyond FDIC limits. Certainly they may use multiple brokerages or bank accounts. But then it will spread the wealth in too many accounts. Can one buy insurance to protect against such failure? But then question will become, who will insure that insurer?

  • Treasury bills and notes. The US government won’t default, no matter what the media says…
    – RonJohn
    Mar 11 at 6:59
  • 2
    "small investor protects their nest egg" If your money is entirely sitting in bank deposits, you are not an investor, you are a depositor.
    – jjanes
    Mar 11 at 16:15
  • @ronjohn What is the best way to buy treasury biils. i see brokerages ( Vanguard, Fidelity, Schwab) allow to buy treasury, but I guess bought via brokerages then it will count towards SIPC limit
    – puzzled
    Mar 11 at 21:28
  • @puzzled "best" is highly dependent on the situation. For example, you can't (well, maybe can, but it would be complicated and not worth the effort) buy new Treasuries from Treasury Direct with IRA money that you have in a brokerage IRA, so you've got to buy them from the secondary market. You also must buy on the secondary market if you want a maturity date that's doesn't match what the Treasury sells new. Having said that... directly buying from TreasuryDirect is a fine way of buying new issue Treasuries.
    – RonJohn
    Mar 11 at 23:52

2 Answers 2


There is nothing wrong with "too many accounts". If you want FDIC protection, that is the simplest solution.

You can buy insurance for anything legal, or nearly so. Whether you can get it at a reasonable cost can only be determined by trying.

Most folks in that bracket, however, would invest in a diversified portfolio and count on the fact that the whole economy will not go bankrupt, and in fact will on average return more than enough profit to justify the small residual risk. It's not as if they can't afford some short-term losses in the pursuit of better long-term gains.

For the easiest way to do that, see other recent questions about what to do if you suddenly have a lot of money: Pay a fairly small amount to hire a financial advisor who does not take commission for a one-time consultation, to have them recommend a strategy suited to your tolerance for risk and plans for the money. Then implement their suggested mix as low-fee index funds. Revisit very occasionally to rebalance to maintain that mix. If your plans change, or after a decade or so, do another one-time consultation. Otherwise mostly ignore it and let your money make more money. This does not have to be complicated, despite what some people will claim.


Generally when you get that kind of money, well honestly most people just lose it because they have zero financial skill. There have been several books written about how lottery winners just crash and burn, and end up much worse off than when they started. Read the book "Money for Nothing" by Edward Ugel for more on that.

However, for those who do have financial skill, they "diversify, diversify, diversify" - essentially, they do what a university does with its endowment. The stock market is the easiest part - simply buy index funds that own the whole market or a specific part of it, aiming to keep the internal fees within the funds very low. You can read John Bogle's book "Common Sense on Mutual Funds" for why that's a good idea.

Real estate is another popular investment.

Many people want to charge you for handling your money, however their fees and expenses are a guaranteed loss. They feel that because they are financially skilled and you are not, they are entitled to 1-5% a year of your money. Financial skill allows you to minimize those and shield yourself from swindlers. It's a must-have if you win the lottery.

  • Note that REIT funds can be a way to invest in the real estate market without the hassles of actually owning real estate. That's part of my own mix.
    – keshlam
    Mar 11 at 9:13

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