What I'd Do If $1,000,000 Landed in My Account Tomorrow: 3 Moves, 3 Mistakes, 3 Red Flags

Tyler Gardner (0:00)

The danger of having a million dollars is not that you'll spend it. The dangers that you'll spend it on things you don't actually want, because you've internalized a story about what a person with a million dollars is supposed to want. The boat you'll use, never. The house that's bigger than the life inside of it. For me, having money has always meant one thing above everything else. Freedom.

Hello, friends. This is Tyler Gardner welcoming you to another episode of Your Money Guide on the Side, where it is my job to simplify what seems complex, add nuance to what seems simple, and learn from and alongside some of the brightest minds in money, finance, and investing. So let's get started and get you one step closer to where you need to be.

Quick note before we get into it. May's pre-order incentive for my book, Real Wealth, is now live. When you pre-order this month, I'm sending you two chapters that didn't make the final cut. Chapters I genuinely love and wish I could have kept. Delivered digitally in early June. Pre-ordering also locks you in for every monthly incentive between now and the December 1st release. Go to tylergardner.com/book, click the button that says claim my bonuses, upload your receipt, takes two minutes, and you're in. Now on with the show. I want to start by playing a mental game with you today. It's one you've probably played before, but this will be a little different as we're going to explore it together for the next 45 minutes or so.

You wake up tomorrow morning. It's a Tuesday. Nothing particularly special about it. You make your coffee, you let the dog out, you check your phone, and there it is. One million dollars. Sitting in an account with your name on it. Clean. Yours. No catch, no contest, no eccentric uncle with unusually good timing. Just a million dollars and a cursor blinking at you, waiting for a decision.

What do you do?

And I don't mean philosophically. I don't mean in a dream sequence where you buy a boat and move to the Amalfi Coast and your problems dissolve like sugar in warm water. I mean practically, specifically, right away on that Tuesday morning, what is the first thing you do with a million dollars?

Because here's what most people actually do.

Nothing. They panic freeze. They call someone, a family member, a friend, sometimes a guy they vaguely remember from a finance class in 2003, and they say, help. And suddenly, they are on 17 different mailing lists and getting phone calls from 22 year olds of major brokerages who want to talk about some tax inefficiencies they've identified. And before they know it, six months have passed, and the money is sitting in a checking account earning nothing. Which for a million dollars is costing them roughly $30,000 a year in lost purchasing power. $30,000 per year, just sitting there.

Today, I'm going to tell you exactly what I would do.

Three things I would do immediately, three things I would absolutely not do, and three behavioral patterns I would watch for in myself. Because having money does not make you immune to the specific psychological traps that money creates. It mostly just makes the traps way more expensive. This is going to be a very practical episode. And it also is not based just on a million dollars. You can apply these principles to any lump sum going forward. It is going to be specific, and it is going to be considerably simpler than the financial services industry would prefer. And as always, before we get into it, if this podcast has been helpful to you in any way, if it has made you think, or laugh, or share it with a friend who might need the reminders, please consider leaving a review on Apple or Spotify, as it helps more people find the show, and it helps me know that I'm not just crafting 40 minutes of content each week for an audience of bloodhounds who I should mention have never once left a review despite being present for every single episode. Let's get into it.

Section 1, three things I would do immediately.

Number one, before anything else, I would put it somewhere safe and smart on day one. Here's what I mean by that. The very first thing I would do before I called anyone, before I made a single investment decision, before I told a single person it existed, I would move it into a high-yield savings account or a money market fund, that day, that morning before the coffee gets cold.

I want to explain why this is not the boring, obvious move that it sounds like, because I think most people underestimate what this actually means at a million dollar level. A traditional checking account or standard savings account at most major banks pays you somewhere between and 0.01% interest. On a million dollars, that's about $100 per year, which is less than what you'd make selling a moderately interesting piece of furniture on Facebook Marketplace.