Quora Answer: If My Book Sales Generated $1 Billion, Where Would That Money Go?

The following is my answer to a Quora question: “If my book sales generated me $1 billion, where exactly would all of that money go, especially since most bank accounts only secure up to $250,000?”

If your book sales generated $1 billion dollars, not all of it is yours.  The publishers, distributors and bookshops also get some of that.  However, you do get a significant portion of that.  And then, there are taxes, which take some more off.

It is true that the FDIC only insures up to US$250,000 per account per bank, but there are ways around this, and you can get alternative insurance coverage.  As such, in effect, it is possible to have a bank account that secures more than $250,000, although putting millions in a single account is very unwise.  Even having millions in liquid currency is incredibly risky.  If you do have that sort of money in a bank, the bank would assign an investment manager to advise you on fund management and offer you options to diversify your funds.

Alternatively, create a vehicle such as a company or trust to minimise your tax exposure, and hire your own tax accountant, legal counsel, and financial advisor.  Good ones are not cheap, but they are worth it.