If the average middle-class American

having very little knowledge on this type of subject, my early 30s-middle class answer would be:

-pay off mortgage (only debt)
-buy a few rental properties with the idea of having some kind of passive income during retirement
-put as much as possible left into retirement/investment type vehicles
-stay at my job maybe 7-10 more years, while massively upping my work retirement contributions
-retire around 40 if feasible

I’m guessing the average American would:

1. Pay off credit card debt. Maybe do that for their brother or mom or someone too
2. Buy a new car for them/their spouse
3. Sell house and buy a bigger one
4. But some nice toys and start spending more in general

If younger than 45, VTSAX and keep working.

Isn’t there a show about people who win the lottery and lose it all in a few years? Lottery Nightmares or something.

What should their move be?

Retire all debt

Sock away a year's worth of expenses in a rainy day fund.

Spent $10,000-$15,000 on a nice vacation.

Buy two new, sensible cars

Invest the rest in an index fund.

Most people would blow it though.

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I would assume 90% of the middle class would have no clue what to do with that kind of money.

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More or less. Some of them might manage to hang on to it but most would be exactly where they were to begin with in 4-5 years if not less. I've seen it happen twice.

Once with a $5 million insurance windfall and the second with a $10 million legal settlement. The first guy blew through his money in a little over three years, the second finally came to her senses when her account balance went below seven digits but it was a bit late by then. She was disabled and couldn't work so she went back on disability and used what was left as a supplement.

Personally, as a single guy in my mid 20's: I'd pay off anything on my home and then invest in property around the Knoxville area and then some into some ETFs. Snowball it from there. And then obviously take out like 5-10K for a fun vacation.

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Were given $1 million. What should their next move be?
I would assume 90% of the middle class would have no clue what to do with that kind of money.

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It's a more complicated question because we don't have an age to factor in. I don't know how old the average middle class American is... 35 or 40 maybe?

But in any case, I'd say that eliminating consumer (including student loans) and primary residence debt should be at the top of anyone's list. After that, the investing and spending sides would depend on age, family situation, current financial status and life goals.

What the average idiot should do?

Take every cent of it and put it in an 18 month CD. This will let the shock wear off, and it will be illuminating that, with practically zero risk, they now have about $30k more than they started with.

Now, pay off the credit cards. It sucked making all of those payments over the last 18 months, didn’t it? Maybe you won’t max them out again this time, which is what most people seem to do after paying them off (usually after selling a house).

From here, it branches a fair bit. Have you been grinding out work as an employee for a small business that you could conceivably run yourself but just didn’t have the start up capital? Take a shot and see if you can change your life. However, if doing so will use up more than 50% of what you have left, it’s probably not a good idea, because most people are going to frick this part up.

If you live in a 60’s ranch style death trap, consider a new home that isn’t much (if any) bigger, but is significantly newer so you can start seeing some relief on utility bills.

Take a nice, reasonable vacation somewhere you never thought you would be able to go (should be doable for less than $15k, full stop. Most likely less).

Now put the rest in a nice, low fee vanguard index fund and get your arse back to work.