Let us say you do win a huge amount in the lottery. You go to deposit the check at the bank, who quickly changes the indifference shown to you all these years. Even some coffee surfaces when you sit down to talk to the officer.
All smiles, the bank offers you things you never imagined banks offer. Their dream, of course, is that you keep all of your money there.
Never do that.
For once, the 2008 crisis was terrible, but there might be more financial doom coming. The FDIC only covers deposits up to US$ 250,000, so if you keep your money at a bank that fails, bad news for you. It is mostly all gone, or it might take a long time for you to recover some of it.
So the best strategy is to do business with several banks, always checking their financial status. Do not deposit in very small banks, no matter how nice is the manager. These continue to fail in droves. You might not hear about it, but yes, a lot of them are closing. Very large banks might still be bought by other larger banks, so there is a way out. Small banks simply are sacrificed.
As for investing in the stock market, and other types of securities, learn more about it. Don't fall for the first financial advisor that comes your way, and never, ever, invest in a single investment company, irrespective of how good the return. Remember Madoff, there are still a few of them up and around.
Don't grant powers of attorney to such financial advisors, even (or better yet, especially) if they are relatives. You might soon find that a good chunk of your money is gone...
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