Managing a Windfall

One signed a multimillion-dollar contract; another bought a lucky lottery ticket; a third sold property rights. Well look at what they did with their sudden gains and what you should do with yours.

about $260,000 of his lottery winnings, over nearly three years, and has since parlayed that investment into a $400,000 nest egg. A key part of his strategy has been diversification — he’s purchased 22 different stocks, including oil exploration stocks and shares in well-known companies such as McDonald’s, Pfizer, Harrah’s Casino, Boeing, and Walgreens. Plumpp says 17 of his stocks have increased in value.

So far, the most gratifying thing he’s done with his money, Plumpp says, is to help his adult daughter, Harriet Nzinga Plumpp. “When she got married, I was able to pay $30,000 for the wedding,” he says. “And later on, when she needed $20,000 toward the down payment on her house, I was able to help with that, too.”

These days, Plumpp stays busy by teaching courses part time in African American literature and creative writing at Chicago State University. But Plumpp’s ideas have changed about big financial wins of any kind. “When you win a lottery, your first reaction is that it’s a blessing from God,” he says. “But now my philosophy is that the real wealth in life comes from your health, your children, and your work.”

NBA star Bobby Simmons also knows what it’s like to manage a huge windfall. Last July, Simmons landed a $47 million, five-year contract with the Milwaukee Bucks — a deal closer to $50 million when various contract options are included.

Growing up in the rough-and-tumble South Side of Chicago, Simmons always wanted to be a basketball star. Seeing that dream come to fruition — and the financial, personal, and professional implications that come along with it — have been a real eye-opener for the 26-year-old athlete.

Before signing the fat contract, Simmons took the hard road to the NBA. The Seattle Supersonics, Washington Wizards, and Los Angeles Clippers all passed up the young forward. Simmons was even sent to the Development League, a sort of minor league for the NBA. Simmons described his experience there as “humbling.”

Reggie Brown, a sports management agent with Priority Sports & Entertainment, mentored Simmons. “Athletes like Bobby work intensely to be the best because they understand that an average NBA career lasts just six or seven years. A great career lasts maybe 12 years,” says Brown. “So these guys know they have to take advantage of that narrow window of opportunity.”

Brown is a mentor to Simmons but draws the line at being a financial adviser. “My job is to make money for them, not tell them what to do with it,” the talent scout says.

To keep his money growing, Simmons uses a team of professionals but relies mostly on his financial adviser, Stacee Bain Crittenden of Smith Barney’s Bowie, Maryland, office. The two talk four to five times a week, and sometimes several times a day, to discuss the financial markets, potential investments, and various business ventures. “The first thing I told Bobby is that I’m not concerned about today,” says Crittenden. “It is my goal to make sure that he has money for the rest of his life, after

Pages: 1 2 3 4 5 6