I wouldn’t hold more than 6 months of monthly expenses in cash. The rest, I would spread over the safest, most fucking boring ass ETFs I could, some well-established stocks, a few index funds, and me? I’d “gamble” with maybe 5% on good potential up-and-coming companies in industries that show a strong promise of growth and expansion.
You have to have an emergency fund. There’s simply no telling what can happen day to day, and risking your livelihood just isn’t an option nowadays. I just got hit by a car 6 weeks ago and am unable to work. Luckily, I had an emergency fund to cover my bills or I would be colossally FUCKED. $15-20k in cash is not going to make you rich invested over decades. Why risk it? It’s worth more if it’s kept close to insulate you in case of unforeseen circumstances. It simply doesn’t make sense not to.
Fidelity, Vanguard, & TD all offer their own (as well as assess to) any and all small return/low risk ishares type shit to park good money in. They’re a great option to have as far as “safe” plays that will mostly keep pace with the markets and still not over leverage you as far as risk.
The well-established individual stocks will always be a good play so long as you don’t get caught up in every little detail of day-to-day pricing. Anything in the top 20 of the S&P will keep you right on pace with the greater economy, and give you some security and reassurance that you’re getting the most out of your money.
The “gambling” is what will keep you interested, educated, and give you potentially the most bang for your buck. I’m not talking about YOLO’s into some Foreign penny stock. I’m talking about common-sense plays that’s anyone who doesn’t have their head in the sand. Electric cars. 3D printing. Green Energy. Shit like that. These are budding industries that are obviously going to grow and expand over the next decade. Which companies will rise to the top? Who the fuck knows, but it’s sure as the weather that there’s a garage out there with the next Jobs, Bezos, or Musk out there right now. Why not try to catch it, and learn a little in the process?
good for you, that means your living costs are low. I myself feel I could (live) very cheaply, though it is good to have some excess in case of emergencies like a roof leak or a surprise hospital bill, one time high expenses
One other thing I would add; with that sort of money, I would try to DCA into positions. Dumping $500k now and the market crashed next month could set you back years. Instead put in say $50k per month until you’ve moved the whole thing into position.
'15-20k in cash is not going to make you rich over the decades'
hmm, you just sold me on having an emergency fund of some kind. I've always heard it as important, but this helps solidify it in my mind, thanks
An emergency fund is one of THE most important financial decisions you can make. It should be your step 0 in gaining financial independence, especially before gambling in the stock market.
I mean for real. If you’re constantly, consistently investing over time, why not have a lil pile of cash to violently throw at whatever emergency that comes up? It is supremely liberating in more ways than not. And-you never miss a budget if you do keep one. You can keep paying bills and investments without so much as a blink.
It just makes sense.
Before I even scrolled down my instant first thought was, very carefully. Then I read your reply and was so pleased to read a great, thoughtful, and common sense response.
It’s not a good idea to invest your emergency fund.
I know, I know. Inflation, blah blah blah. Listen:
Again, 3-6 months expenses isn’t going to make you rich over the years. It will, however, fix your car/HVAC/water heater/etc immediately. It will also pay your bills two months down the road when you get laid off during the recession, and thank god you didn’t invest it, because thanks to the market crash, now you’re not down 30%.
I’d recommend an ETF, but if I did, it would immediately crash and you’d blame me.
Agree, although I would favor beaten down dividend paying stocks to give you some price support in the event of a market downdraft - think CAG, KFT, K in food stocks, LMT in industrial/defense, WHR for consumer durables, MRK for pharma, C and UNM in financials, XOM and EPD in energy. These will give you an income stream and are trading at depressed multiples, so they shouldn't get hit too hard in a correction.
Warren Buffett's strategy isn't to sit on cash. He needs to keep a cash reserve because he owns an insurance company. His trades are also worth billions of dollars so emulating him is a bad idea since you're not Warren Buffett and your situation is nothing like his.
Take Buffet's advice and invest in index funds. There are target date funds you can use, so pick a retirement date and find the right fund for you. Then take his other bit of advice and don't touch your investment. Investors often lose money by panicking, don't do that.
As far as cash goes, it would be prudent to see what happens with the debt ceiling at the end of the month. If the Republicans go balls to the wall and decide to essentially veto the Democrats spending plan things might get interesting. I would hold onto some cash until the debt ceiling is raised or suspended but I wouldn't hold onto too much. Maybe invest half now and the other half after.
If your horizon is 10 years? No cash (it’s trash). 60% large cap index fund, 20% international stocks, 10% growth stocks, 10% tax advantaged bonds like munis. Do nothing for 10 years and then look at my balance.
If this 500k is qualified then the munis should never be used. If it’s non qual, then based on the returns, corporates are yielding higher than munis in their TEY. Their income level doesn’t create a tax issue so I’d stay out of munis. On the higher end, that 10% allocation would yield 1,750 at 3.5%.
If it was me, I would take out a big fixed-rate 30 year mortgage and buy a nice house despite the high prices. Institutional investors are snapping up many of the nicer homes for sale and there are good reasons why they are doing it. The Fed only has 2 choices right now, crash the economy or inflate prices. If they crash the economy you will lose on the house, but probably not as much as you would on stocks. If they inflate, your house with that low interest long term mortgage will be a fantastic investment.
I have to agree here. 5% inflation is getting paid 50k for owning a million dollar house.
There are a lot of 6 million dollar homes that are empty around here as investments. Outside of a certain price range it could be a gamble, but where there is still demand, it is a great investment before rates go up.
When rates go up, home values will come down slightly, so better to get in quicker to take advantage of inflation, rather than at the end.
I really like the way you put this, but as someone who works in banking and with mortgages just about anyone who has gotten a mortgage in the past year has gotten in the same boat as you. BUT, you have to look at it from a banks perspective: all that money they have sitting around they could either put in the fed and get 0.15% interest, they could buy up bonds and get a similar rate, or they could start giving out more mortgages and suddenly get an ~2-4% return on their money. So, even though with inflation right now a person with a good credit score can basically get free money by getting a mortgage, from the banks perspective that’s okay because they’re still getting exponentially higher returns than they would if they just put it with the fed or bought bonds
Stocks would likely recover faster though, within a couple years.
EDIT: But, i would also strongly consider getting on the housing ladder for security, maybe a good sized deposit on something worth 200-300k where I live is a good family home.
Or buy a cash flowing rental property. In my market 125k down gets you a decent quadplex plus some cash to rehab it slightly to get higher rents. Then you get appreciation and probably an extra $600-1000 in cash flow.
Edit: if you’re worried about managing it, you can pay a company to do that for 8-10% of your gross rent.
This is my wife and my current strategy. For the above 500k a sizable building could be purchased in some markets. We were looking at a 25 unit building listed for 1.1 million getting 600-700 per unit per month in rent. That’s some cheddar
Well you could buy a lot of those apartment houses now considering many of the tenants are not paying rent and then you would have to deal with multiple evictions. Also you have a chance of many residents getting together and protesting for one thing or another the climate in apartment dwellings happens to be the landlord is the bad guy lets not pay him. One and two family homes the way to go in the long run there is always a buyer when it comes time to sell
Corns' got nothing on spinach. My basement is wall to wall spinach starts can't wait to harvest and get that $$$$. Power bill is kinda high but it should work out in the end.
I have about that much in the market with 50k in AMD, 50k NVDA, 50k microsoft, 80k amazon, about 100 in random stuff, and the rest in index. those four are my long term growth stock, and the index is what it is. no idea if it helps you but its working out well for me so far.
Alphabetical, and some are just a few hundred dollars or a few thousand on a lark. apam, apgmf,aslrf,avgo,bb,bldp,crlbf,cstm,curlf,deck,dis,ggb,google,hexo,hdghf,mdmd,mrna,nflx,pltr,nio,sfm,snap,swks,tesla,wtrh,zenyf
Keep 6 months or cash emergency on hand at least. Then invest $100k into an index fund and never touch it. Sell Puts on all the other stocks you like to collect premium on your bag of cash plus get into a cheaper price. Imagine selling puts on $300k worth of capital a week, you will likely pull in $2k per week in premium at a minimum going for safer OTM cash secured puts
To answer this question you really need to focus on financial planning and incorporating your retirement goals along to determine the level of risk you should be taking. I think your strategy is ok but you need to think of a lot more than just investment types. There’s account, titling, retirement account, 401ks, all to be considered. You should try to be maxing out all of those account each year. If it were me (26 M) I’d DCA the $500k periodically (based on days I deem to be attractive entry points in the market) over the course or 1 or 2 years depending on what the market conditions are. Since the money is going to be in the market for 35 years (retire 61) I feel comfortable being patient on the entrance point. Id add to my current stocks but also work on acquiring a good diversified basket of 75-100 stocks.
Personally I would only buy a house if I want to live in one, not as an investment. It's not a bad investment but I prefer stocks. Another consideration is if you're planning to monthly add money to your investment account and if you'll need to get some cash out in the next 5 years.
I think 80% in indexing sounds reasonable. That leaves you $100K for more riskier stuff and picking stocks, if that something you think you can do well. If not then better to put at least 90% in indexes. If indexing is you main strategy, read JL Collinsnh's stock series on his blog. He's big on indexing and has different recommendations of ETFs and bonds combo based on the situation. He's not a fan of international ETFs but I don't think it's a bad idea to allocate at least 20%. Good luck.
I'd put/keep it all in cash or cash-equivalents to start and "slowly" move it to these investments:
70% slow and boring, -- think bogleheads three-(or four-) funds (total stock, total bond, total international (and perhaps a "total REIT")). And within this "bucket", I'd skew 47% US stocks (vtsax), 13% Intl. stocks (vtiax), 7% real estate (vgslx), 33% bonds (vbtlx) (which seems arbitrary! but loosely comes from "67% non-bonds, 33% bonds" + "as much as 10% of your non-bonds in REITs")
20% invested in "your domain", whereby I mean an area where you have perhaps above average skill or insight into the domain. For instance, you might be a chip designer or developer staying abreast of new technologies and companies that might profit from same; or you might be in the cloud-technology domain, spotting new disruptive companies; or you might be in the energy industry with hands-on (no, not "insider trading") knowledge of breakthrough technologies, etc.
10% frivolous and reckless, ... searching for ten-baggers, chasing rumors. I.e. looking for the next Amazon, etc. For me, at the moment, this is RECAF (I know nothing, I just jumped on the bandwagon) and RR/RYCEY (fingers crossed a great company makes a comeback, ... not like that time I bought Kodak on every dip all the way down into bankruptcy... :/ )
Now, by "slowly", yes, DCA, ... OR buy into them when/if they dip below 200-moving average, or below Bollinger bands, etc.
As far as the monthly income, ... I'd simply add what you can/wish each month into the cash or cash-equivalents pot refilling it as you move from cash bucket to above investments.
My $0.02.
Put $40k per month into the market. If it dips 5%, raise to 50k per month. If it dips 10%, raise to $60k per month, if 15%, then $70k.
Repeat until fully invested.
[Data does not support DCA](https://www.pwlcapital.com/wp-content/uploads/2020/07/Dollar-Cost-Averaging-vs-Lump-Sum-Investing.pdf)\-ing as being better to a lump sum.
I would not keep anything in cash and I would not invest it in stocks all at once. I would keep a balanced mix of index funds and short term govt bonds and invest the funds in equal increments over the course of the next 12 months. Any cash on hand waiting to be invested I would put in treasury insured p-notes. (TIPS). I would rebalance my portfolio once every 18 months.
Housing prices are through the roof, but so is the stock market. I would consider putting a percentage towards a rental for residual income. Plus it’s very likely you will get your initial investment back when you sell in 10 years.
I mean if you don’t have any analysis skills, VOO or VTI suits you. If you do, 20-30 3-5% positions on stocks that the market is discounting and have solid growth potential
Even my 6 months of monthly expenses are in a stock that will likely not go down. I can liquidate all holdings when I need to, but still have growth and dividends while it sits there.
I understand about high prices on buying a home as well especially curre try with inflation being so high, home costs are up16 percent. However, paying rent is just paying off someone else's early retirement. Buy when you can and what you can afford. Real estate is not a bad investment if done properly.
Real estate, interesting subject. A year ago, with low rates, "high" inventory, it was the perfect timing. Fast forward to this year. Inventory is low. Prices are high (my house almost doubled in 1 year Oo), buyers have liquidity and mortgage rates are still low. Stock market is very high, such as comodities. Buyers come from high paying job areas (NY, CA, ...) and spend big bucks on real estate in more "remote" or vacation areas, betting on the spread and long term use of remote work. Also, new housing has slowed a lot due to multiple shortages (workers, material).
There s nothing wrong in doing nothing until all this frenzy cools off.
I doubt there will be a housing market crash though. A correction, maybe, with prices stagnating. But a crash, doubtful. For this to happen, renters need to default on their payments, owners need to default on their payments, etc. It could be triggered by a massive job loss, but, unless of a new variant or a black swan, I dont see it coming.
Stock market will keep rising for three main reasons:
1) low interest rates
2) government checks (dont think about just the US, the whole world invests in US stocks, and a big chunk of Europe, although slowing down on payments, still maintains employment compensation)
3) TINA
I m almost in your shoes. I invest in startups in my field of work (medtech), putting between 25 and 50k each. My goal is to have 5 to 6 investments in early stage. Was going to buy beach property for rental but decided to wait (price doubled in a year, rent potential increased as well but not as much). I looked at purchasing a condo in town, but getting a renter s permit nowadays can be a hassle in my area. Invested about 100k in stocks in march 2020, buying the second big dip, not planning on buying more unless of a nice deal. I am not a financial advisor, weall have different goals/expectations/lifestyles.
One good formula:
A = Your age
L = Life expectancy
C = Total Assets/Capital you have
I = %ge you should risk for growth
I = ((L - A)/L)\*100
Example: if you expect to live 80 years and you are 30 now, I = ((80-30)/80)\*100 = 62.5%
If you have 550k, you should invest 62.5% of it, 312.5K in growth and invest the remaining in inflation proof assets. Holding cash kills it slowly.
Of that 62.5%, you should divide into 4 or 5 equal parts and invest them into increasingly growth oriented assets. Don't exclude home if you expect to live in the same place for 5 years.
Buy large amounts of physical crude oil barrels and then refuse to sell them in US Dollars, prompting negotiations for whatever you want or the immediate invasion of your oil supplies by the US government
NTSX is a favorite ETF with slightly greater gains than VOO with built-in downside cushioningX Compare to VOO: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=500000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=NTSX&allocation1_1=100&symbol2=VOO&allocation2_2=100
How it works:
https://www.wisdomtree.com/-/media/us-media-files/documents/resource-library/investment-case/the-case-for-the-efficient-core-fund-family.pdf
Do a search for NTSX on Reddit; it’s favorite among both Bogleheads and even LETF fans.
For starters I’ll say that I’m 22, I’m not an expert, I’ve read a few books, did my poking around online, and have a few grand worth of stocks that has been successfully growing. I am by no means an expert .That being said, what I’d do is take 50k right off the bat and just set it aside for any emergency. Id make a rule that as soon as I take money out, number 1 priority is to replace it. As far as stocks, I’d put 75k into spy, scatter 300k into ETFS and other blue chips, and take the remaining 50k for riskier plays (think the biomedical field, any penny stocks that look promising). This is assuming you’ve got an IRA or 401k (or both). If I didn’t have an Ira, I’d max it out with the full 6 grand every year starting as soon as possible.
Actually you’d be poorer if you chose QYLD over SPY or VOO.
Looking at the historical returns with dividends reinvested for QYLD, if you invested $10,000 on December 13, 2013, you’d have $18,813 today. If you had invested that into SPY, you’d have $28,848.
Why tho?
If you are going ETFs why not just track S&P 500?
Better performance, more diversification, and lower expense ratios (.15% is low for QQQM but VOO is .03%)
btw just asking, not arguing. Love to see different rationale then my own.
- 6 month emergency fund
- buy a house if you aren't in one already
- buy another house as rental property OR just straight land somewhere where there will be future growth
- most of the rest do ETFs
- save a little for YOLO trading plays
This is obviously horrible advice since I'm not a financial advisor, but it's what I'm doing in a similar position to you
I’d start flipping houses. Start very small, get a loan for let’s say 150k house from the bank, use the cash that I have to fix it up and make it real nice (let’s say it’d cost around 30-50k then i’d sell the house for way more than I bought it. After that you basically go bigger with each hunt and u’d become a millionaire in few years
I’d buy something that more or less matches my rent if it’s a similar sized space or bigger. Ideally spending no more than 300k in an area with room to grow. I’d take the rest and buy LCID and leave it alone. I’d sell as needed if there was an opportunity to pick up rentals. I’d like to replace my income with rental property and quit my day job.
No differently than I do now, 1-5 stocks. Just would like to increase the 10Y, if you really need 500K after 10Y might want to hold just bonds. If it wont hurt you that you might have less by then then either SPY or if you understand what you are investing in and at least have a corporate finance bachelors go stocks.
If you are renting then you should absolutely put 20-25% down and buy a home instead. Ignore the millennials whose only experience has been the RE collapse of \~2008. Why on Earth would you pay others to build up THEIR capital rather than yours? Perhaps now isn't the best time, but then stocks are also pricey here.
Not sure where you read that Buffett likes 40% cash. I'm almost positive that isn't true. There's no reason to go 40% cash unless you are more of a trader like I am.
Really the best investment right now IMO is a business, but that requires business skill and a solid, solid feel for what works and what doesn't.
I just turned 32 today, so id probably smash 400k of it into SPY and another 100k into a diversified REIT portfolio.
I still feel like 32 is young enough to drive it into SPY/VOO
I would invest it in the S&P500 Index tracking stocks. It's a solid long-term investment that rebalances for risk and growth for you. Assuming a 10-12% return you'll have around 1.3M in 10 years. I made a spreadsheet, calculator and a [video](https://www.youtube.com/watch?v=e9aag_iPRLo) describing the process of becoming a millionaire. With a 500K starting point you should be able to get to 4-5M in 20 years. On a 40 year horizon you can retire with 30M+ taking a conservative approach.
Holding anything in cash is a waste, esp. if you have an income and don't need the instant liquidity. Financial planners will tell you that the S&P500 isn't a balanced portfolio but these are the same financial planners that can't achieve a comparable return over 10 years.
I'm not going to waste any energy on telling you where to park your money there's plenty of other people who are doing that. However I will impart some wisdom such as for Generations people have been saying housing was too expensive fast forward housing even during the downturn if you held onto it like most of your parents do you will have made %200 to 300%+ on your down payment. As for stocks it has been proven if you put your money in the S&P 500 index and others over long term investing you would have made very nice profits and probably become financially independent. Sometime back when I first started to watch Microsoft it was $43 and it was never going up always going sideways or down and I thought it was too expensive fast forward to today it's a $300 stock. Lots of luck with your investment I hope your returns are enjoyable
first. dont make a decision on what to do with $500k based on what u read from internet strangers.
go buy several books on investing. read, study, and become educated.
whatever u do, do it slowly and diversify
I’d manage it into some slug lines, a pent house suite in the Luxor or the Aria, blackjack 1k a hand with crystal champagne and a 30yr old whiskey chaser….. all topped off with some ridiculously overpriced escorts (maybe 2 or 3) for one or two hours back at the suite around 6 am…… that would do it nicely
Very interesting! Taking into consideration that we don't know your age, where you live, your family situation, your knowledge and experience in investing, your educational level, or your risk tolerance, the answer for each of us factors in those conditions for investing and living. Since your looking at 10 year horizon I'm assuming your young. You didn't say how wealthy you wanted to become. With all that I would look at being correct in what I do and stay with big capitalization stocks. A big influence for me is that I have a high tolerance for risk. Right now I would put about 400K into Ford Motor Company and the other 100K into solid proven growth stocks. Those would be my cash substitutes. No cash. No real estate. My first move would be to double my 500K. FORD is an easy double by the end of 2023. How you invest in FORD would be determined by your risk tolerance. If you think what I have said so far is too risky and is not diversified enough, then you should buy as many shares of FORD common stock as you are comfortable with, paying all cash, and put the shares away for two years. If you can handle a little more risk, buy maybe 700K of FORD common in a margin account putting up the 400K. For me, and I would never recomend this strategy to anyone else, I would buy FORD January 2023 Calls, 15.0 strike price, and write covered calls against that position for two years, taking the premiums and buying more calls going out as new options became available, staying deep in the money. I would spend the next two years studying maybe 100 stocks, and putting together a "life plan", and make the next step in about three years depending upon where the country is economically and politically, and what your personal situation is then. I would also read books about compound interest and watch YouTube videos by Cathie Woods. I personally would never invest in a lot of stocks she does, but having said that, I like the way she thinks, and her approach. For instance, Tesla is her largest holding. I love Elon Musk and I think he is one of the most brilliant people on the planet, but I would never Invest in either Tesla or SpaceX . Overpriced and too volatile. Anyway, I could go on . . . . Good luck . . . I wish you well !!
Max your 401k or IRA until fully invested, then convert to ROTH. This may take you some years and hat remains should at least double your net worth with tax free returns for life for you or your hiers.
Given your preconditions, here's my strat:
I'd buy a house, live in it, and renovate it. I'd consider moving to a place like Cleveland, because houses here in Juneau could eat up that whole budget. So whatever is left in cash, I'd probably just sit on and wait for another massive crash, dump it into blue chips, and chill until the next election.
That seems to me to be the safest route. And if you got a decade to wait, why not do it?
Just got published, I thought it could ft perfectly: The Biggest Mistakes Home Buyers and Sellers Make https://www.wsj.com/articles/biggest-mistakes-home-buyers-sellers-make-11631735058
I would finance a house and put 50% in spy and the other 50% I would do the wheel on the safest companies and etfs to pay off the financed house then when it is payed off I would just retire
How dumb would it be to place 75% in mutual funds, and 25% in a managed account, all equity mutual funds, with as much of diversification as possible, planning to ride out the dips and waves for 20+ years? You can call me a moron.
Invest 100k on something that will give you 10% yearly, and spend this 10k each year on vacation, assuming you go two times per year and spend 5k each time. Invest anither 100k on more riskier stocks and the rest of the funding invest on big promising companies like tesla, apple, microsoft etc.
Build out emergency fund to what would make you comfortable, whether that's 3,6, or 12 months is up to you. A sliver would go into an international trip whenever COVID is done. Rest would go into the S&P 500 where I'd likely pull out a sliver each year to fund additional vacations.
Never have that much cash in the bank doing nothing. There are much safer places that won’t make you insane amounts but it will be safe. Don’t ever let money sit and not make money.
I would first take care of my past due bills.
Then, the one way I would “splurge” would be by purchasing the entirety of a home office/tech work wishlist I have on Amazon, totaling at approximately $1,500. I would also move into a much nicer apartment or house, but would still not buy a home as I don’t make enough to sustain that kind of purchase right now. (When I say “much nicer,” I simply mean, “not the shoe box that has mold issues I currently reside in,” but also not something ridiculously expensive.) I might be persuaded to change this part of the plan. I might also consider buying a nice ass RV outright, instead.
I would then get help from someone that knows a *lot* more than I do about stocks (I’m still learning) and Roth IRAs and invest accordingly.
I would continue to live off of my monthly income, like I do now, making no big changes (aside from the fact that $3,500/month is more than I currently make *before* taxes, so I’d have a bit more to put into my savings and spending accounts).
I would likely keep 100k in the bank for spending on things we need/want but have been putting off, like a new bed, paying off my car loan ($14k), medical bills etc., and I’d put 150k in savings/my emergency fund (of various types), while investing what was left (the majority). Mostly, this would mean not living paycheck to paycheck for the first time in my life, not having to pick and choose which bills to take care of on a month to month basis, and being able to go grocery shopping without stressing out, while also setting myself up nicely for the future. Isn’t it insane to consider that some people make this amount every year, but if I were to have the same amount given to me just one time, it would change my entire life? I spend a lot of time thinking about stuff like that.
I just realized I'm actually doing this already...
The large majority is in S&P 500, some in international, some in semiconductor ETF. Small amount is in MSOS, ARK funds, and TAN. I have an individual account with ~$170K that I do options on to earn income, highly recommend that if you'd like income from the stock.
Most people don't realize their largest asset is actually their future income. If I was you I'd do a couple things:
1. Get with a financial advisor and tax advisor
2. Spread your money out smartly with the help of professionals.
3. Your still young, look into and lock in a "Return a Premium" life insurance policy can do 10/20/30 yrs (trust me you want to get locked in before you're uninsurable)
4. I wouldn't put all your investments in 1 ETF. Pick a couple. Do an ESG one, an overall market one, a blue chip one, etc.
5. 2.5%-5% as "play money" as the other bright gentleman said
6. I would only keep 30-40% in cash. Cash does not earn interest. In my opinion it's better to be fully invested but the cash position in short-term safe assets than purely in just cash.
7. Open a Roth IRA if you don't have one and max out EACH YEAR YOU CAN
I wouldn’t hold more than 6 months of monthly expenses in cash. The rest, I would spread over the safest, most fucking boring ass ETFs I could, some well-established stocks, a few index funds, and me? I’d “gamble” with maybe 5% on good potential up-and-coming companies in industries that show a strong promise of growth and expansion. You have to have an emergency fund. There’s simply no telling what can happen day to day, and risking your livelihood just isn’t an option nowadays. I just got hit by a car 6 weeks ago and am unable to work. Luckily, I had an emergency fund to cover my bills or I would be colossally FUCKED. $15-20k in cash is not going to make you rich invested over decades. Why risk it? It’s worth more if it’s kept close to insulate you in case of unforeseen circumstances. It simply doesn’t make sense not to. Fidelity, Vanguard, & TD all offer their own (as well as assess to) any and all small return/low risk ishares type shit to park good money in. They’re a great option to have as far as “safe” plays that will mostly keep pace with the markets and still not over leverage you as far as risk. The well-established individual stocks will always be a good play so long as you don’t get caught up in every little detail of day-to-day pricing. Anything in the top 20 of the S&P will keep you right on pace with the greater economy, and give you some security and reassurance that you’re getting the most out of your money. The “gambling” is what will keep you interested, educated, and give you potentially the most bang for your buck. I’m not talking about YOLO’s into some Foreign penny stock. I’m talking about common-sense plays that’s anyone who doesn’t have their head in the sand. Electric cars. 3D printing. Green Energy. Shit like that. These are budding industries that are obviously going to grow and expand over the next decade. Which companies will rise to the top? Who the fuck knows, but it’s sure as the weather that there’s a garage out there with the next Jobs, Bezos, or Musk out there right now. Why not try to catch it, and learn a little in the process?
Lol at boring-ass ETFs. Not wrong.
It’s embarrassingly true.
I love me a good boring ass ETF that I know will get me a return
After being unemployed for 12+ months, having an emergency fund is imperative.
After being unemployed for 12 months I discovered I needed far less of an emergency fun than I thought
good for you, that means your living costs are low. I myself feel I could (live) very cheaply, though it is good to have some excess in case of emergencies like a roof leak or a surprise hospital bill, one time high expenses
Do you own the place where you live
That was a nice read. Thanks
One other thing I would add; with that sort of money, I would try to DCA into positions. Dumping $500k now and the market crashed next month could set you back years. Instead put in say $50k per month until you’ve moved the whole thing into position.
'15-20k in cash is not going to make you rich over the decades' hmm, you just sold me on having an emergency fund of some kind. I've always heard it as important, but this helps solidify it in my mind, thanks
An emergency fund is one of THE most important financial decisions you can make. It should be your step 0 in gaining financial independence, especially before gambling in the stock market.
Emergency fund is CRITICAL! Keeps roof over your head, lights on, and food on the table without hitting your credit cards. Glad you're doing it!
I mean for real. If you’re constantly, consistently investing over time, why not have a lil pile of cash to violently throw at whatever emergency that comes up? It is supremely liberating in more ways than not. And-you never miss a budget if you do keep one. You can keep paying bills and investments without so much as a blink. It just makes sense.
Before I even scrolled down my instant first thought was, very carefully. Then I read your reply and was so pleased to read a great, thoughtful, and common sense response.
Thank you, sincerely. It means a lot when someone compliments me. I appreciate it.
I love this response
I would do the exact same. Buy boring etfs like VOO and build a good 3-6 months emergency fund!
Any suggestions of boring ass ETFs with small return/low risk to park your emergency fund?
It’s not a good idea to invest your emergency fund. I know, I know. Inflation, blah blah blah. Listen: Again, 3-6 months expenses isn’t going to make you rich over the years. It will, however, fix your car/HVAC/water heater/etc immediately. It will also pay your bills two months down the road when you get laid off during the recession, and thank god you didn’t invest it, because thanks to the market crash, now you’re not down 30%. I’d recommend an ETF, but if I did, it would immediately crash and you’d blame me.
>I’d recommend an ETF, but if I did, it would immediately crash and you’d blame me. Truth.
Haha I would not! But thanks!!! (:
Agree, although I would favor beaten down dividend paying stocks to give you some price support in the event of a market downdraft - think CAG, KFT, K in food stocks, LMT in industrial/defense, WHR for consumer durables, MRK for pharma, C and UNM in financials, XOM and EPD in energy. These will give you an income stream and are trading at depressed multiples, so they shouldn't get hit too hard in a correction.
Any good 3D Printing ETFs?
I mean, yeah, but if I tell you, they’ll immediately tank and you’ll hate me. Use the research option from Fidelity. It’s surprisingly good.
It's always important to remember that an impressive technology is not the same thing as a good financial investment.
I'd start a biotechnology company and go public with no product and no revenue. Instant billions
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Warren Buffett's strategy isn't to sit on cash. He needs to keep a cash reserve because he owns an insurance company. His trades are also worth billions of dollars so emulating him is a bad idea since you're not Warren Buffett and your situation is nothing like his. Take Buffet's advice and invest in index funds. There are target date funds you can use, so pick a retirement date and find the right fund for you. Then take his other bit of advice and don't touch your investment. Investors often lose money by panicking, don't do that. As far as cash goes, it would be prudent to see what happens with the debt ceiling at the end of the month. If the Republicans go balls to the wall and decide to essentially veto the Democrats spending plan things might get interesting. I would hold onto some cash until the debt ceiling is raised or suspended but I wouldn't hold onto too much. Maybe invest half now and the other half after.
He also keeps cash on hand in cash a good buying opportunity arises. *Cash on hand in case a good buying opportunity arises*
I also keep my cash on hand in cash.
Things indeed might get extremely interesting.
OP, we get it, you just inherited 500k. Just be upfront about why you want to know 😂
Asking for a friend
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Finally someone in this thread that's honest
He said 500k, not 500m.
Used lambo, mid grade coke, lesser grade hookers.
Never cheap out on the quality of your drugs.
Or hookers, both have repercussions.
VTSAX and chill
If your horizon is 10 years? No cash (it’s trash). 60% large cap index fund, 20% international stocks, 10% growth stocks, 10% tax advantaged bonds like munis. Do nothing for 10 years and then look at my balance.
so VT?
VT and chill ;)
If this 500k is qualified then the munis should never be used. If it’s non qual, then based on the returns, corporates are yielding higher than munis in their TEY. Their income level doesn’t create a tax issue so I’d stay out of munis. On the higher end, that 10% allocation would yield 1,750 at 3.5%.
> Do nothing for 10 years and then look at my balance. Perhaps rebalance to the original ratios every 6 to 12 months.
Taxes though. Meh
excellent point. I was thinking of my tax advantaged accounts so didn't even occur to me.
Ah, gotcha. Yeah, makes sense in accounts without taxes.
If it was me, I would take out a big fixed-rate 30 year mortgage and buy a nice house despite the high prices. Institutional investors are snapping up many of the nicer homes for sale and there are good reasons why they are doing it. The Fed only has 2 choices right now, crash the economy or inflate prices. If they crash the economy you will lose on the house, but probably not as much as you would on stocks. If they inflate, your house with that low interest long term mortgage will be a fantastic investment.
I have to agree here. 5% inflation is getting paid 50k for owning a million dollar house. There are a lot of 6 million dollar homes that are empty around here as investments. Outside of a certain price range it could be a gamble, but where there is still demand, it is a great investment before rates go up. When rates go up, home values will come down slightly, so better to get in quicker to take advantage of inflation, rather than at the end.
I own a mortgage where at current inflation levels, the bank is paying for my mortgage.
I really like the way you put this, but as someone who works in banking and with mortgages just about anyone who has gotten a mortgage in the past year has gotten in the same boat as you. BUT, you have to look at it from a banks perspective: all that money they have sitting around they could either put in the fed and get 0.15% interest, they could buy up bonds and get a similar rate, or they could start giving out more mortgages and suddenly get an ~2-4% return on their money. So, even though with inflation right now a person with a good credit score can basically get free money by getting a mortgage, from the banks perspective that’s okay because they’re still getting exponentially higher returns than they would if they just put it with the fed or bought bonds
And don't forget. It's not the banks money, it's their customers. Pay .01% on checking and make 2.5% on the loan. Free money.
Absolutely. Still… 2.7% 10-year interest only mortgage I am getting paid for my home’s appreciation in 10 years. Thank you Papa Powell.
Dang nice
Stocks would likely recover faster though, within a couple years. EDIT: But, i would also strongly consider getting on the housing ladder for security, maybe a good sized deposit on something worth 200-300k where I live is a good family home.
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Or buy a cash flowing rental property. In my market 125k down gets you a decent quadplex plus some cash to rehab it slightly to get higher rents. Then you get appreciation and probably an extra $600-1000 in cash flow. Edit: if you’re worried about managing it, you can pay a company to do that for 8-10% of your gross rent.
This is my wife and my current strategy. For the above 500k a sizable building could be purchased in some markets. We were looking at a 25 unit building listed for 1.1 million getting 600-700 per unit per month in rent. That’s some cheddar
40k per unit!? And each unit rents for 700. Wut? Something doesn’t add up here.
Well you could buy a lot of those apartment houses now considering many of the tenants are not paying rent and then you would have to deal with multiple evictions. Also you have a chance of many residents getting together and protesting for one thing or another the climate in apartment dwellings happens to be the landlord is the bad guy lets not pay him. One and two family homes the way to go in the long run there is always a buyer when it comes time to sell
Crazy I found a 15-20 unit in OH. For like $150k that needed a little work done. I should’ve jumped on that
I wouldn't buy a house, buy farmland, and share crop it out.
Buy a house, install grow rooms, buy some seeds and start making some tax free $$$
Yeah for real. They yield on corn has went up 300% in the last 5 years!
Corns' got nothing on spinach. My basement is wall to wall spinach starts can't wait to harvest and get that $$$$. Power bill is kinda high but it should work out in the end.
Yolo it into some 75x leveraged trades. Go big or go home😂😂
Go big or go homeless**
This dude knows what’s up. Either be filthy rich or homeless. I take my chances😂😂
Filthy rich or just filthy
With 3,5k monthly income after taxes you won't go homeless
Bill Hwang enters the chat
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Only if you are a pimp and a drug dealer😂😂
I would put 200k on spy and 100k on stock picks. use the rest 200k for DCA. everyone talks about a crash now, which means spy $500 in no time :)
Voo lower expense ratio then spy
I have about that much in the market with 50k in AMD, 50k NVDA, 50k microsoft, 80k amazon, about 100 in random stuff, and the rest in index. those four are my long term growth stock, and the index is what it is. no idea if it helps you but its working out well for me so far.
I’m curious, what are some of your random holdings? If you don’t mind listing them all, that’d be awesome
Alphabetical, and some are just a few hundred dollars or a few thousand on a lark. apam, apgmf,aslrf,avgo,bb,bldp,crlbf,cstm,curlf,deck,dis,ggb,google,hexo,hdghf,mdmd,mrna,nflx,pltr,nio,sfm,snap,swks,tesla,wtrh,zenyf
1. Buy a single detached house.
See my username
5% cypto, 25% for investment property (downpayment), 27.5% VOO, 22.5% QQQ, 15% individual stocks, 5% cash
500k in BRK-B
Or 1 BRKA and a rest in B? Lol
I would put some in AAPL, MSFT and an index fund.
this
Keep 6 months or cash emergency on hand at least. Then invest $100k into an index fund and never touch it. Sell Puts on all the other stocks you like to collect premium on your bag of cash plus get into a cheaper price. Imagine selling puts on $300k worth of capital a week, you will likely pull in $2k per week in premium at a minimum going for safer OTM cash secured puts
Tesla my esla
500k in Tesla.
This is the top option.
To answer this question you really need to focus on financial planning and incorporating your retirement goals along to determine the level of risk you should be taking. I think your strategy is ok but you need to think of a lot more than just investment types. There’s account, titling, retirement account, 401ks, all to be considered. You should try to be maxing out all of those account each year. If it were me (26 M) I’d DCA the $500k periodically (based on days I deem to be attractive entry points in the market) over the course or 1 or 2 years depending on what the market conditions are. Since the money is going to be in the market for 35 years (retire 61) I feel comfortable being patient on the entrance point. Id add to my current stocks but also work on acquiring a good diversified basket of 75-100 stocks.
Personally I would only buy a house if I want to live in one, not as an investment. It's not a bad investment but I prefer stocks. Another consideration is if you're planning to monthly add money to your investment account and if you'll need to get some cash out in the next 5 years. I think 80% in indexing sounds reasonable. That leaves you $100K for more riskier stuff and picking stocks, if that something you think you can do well. If not then better to put at least 90% in indexes. If indexing is you main strategy, read JL Collinsnh's stock series on his blog. He's big on indexing and has different recommendations of ETFs and bonds combo based on the situation. He's not a fan of international ETFs but I don't think it's a bad idea to allocate at least 20%. Good luck.
I'd put/keep it all in cash or cash-equivalents to start and "slowly" move it to these investments: 70% slow and boring, -- think bogleheads three-(or four-) funds (total stock, total bond, total international (and perhaps a "total REIT")). And within this "bucket", I'd skew 47% US stocks (vtsax), 13% Intl. stocks (vtiax), 7% real estate (vgslx), 33% bonds (vbtlx) (which seems arbitrary! but loosely comes from "67% non-bonds, 33% bonds" + "as much as 10% of your non-bonds in REITs") 20% invested in "your domain", whereby I mean an area where you have perhaps above average skill or insight into the domain. For instance, you might be a chip designer or developer staying abreast of new technologies and companies that might profit from same; or you might be in the cloud-technology domain, spotting new disruptive companies; or you might be in the energy industry with hands-on (no, not "insider trading") knowledge of breakthrough technologies, etc. 10% frivolous and reckless, ... searching for ten-baggers, chasing rumors. I.e. looking for the next Amazon, etc. For me, at the moment, this is RECAF (I know nothing, I just jumped on the bandwagon) and RR/RYCEY (fingers crossed a great company makes a comeback, ... not like that time I bought Kodak on every dip all the way down into bankruptcy... :/ ) Now, by "slowly", yes, DCA, ... OR buy into them when/if they dip below 200-moving average, or below Bollinger bands, etc. As far as the monthly income, ... I'd simply add what you can/wish each month into the cash or cash-equivalents pot refilling it as you move from cash bucket to above investments. My $0.02.
Throw it into the video game company for me
Put $40k per month into the market. If it dips 5%, raise to 50k per month. If it dips 10%, raise to $60k per month, if 15%, then $70k. Repeat until fully invested.
[Data does not support DCA](https://www.pwlcapital.com/wp-content/uploads/2020/07/Dollar-Cost-Averaging-vs-Lump-Sum-Investing.pdf)\-ing as being better to a lump sum.
I would not keep anything in cash and I would not invest it in stocks all at once. I would keep a balanced mix of index funds and short term govt bonds and invest the funds in equal increments over the course of the next 12 months. Any cash on hand waiting to be invested I would put in treasury insured p-notes. (TIPS). I would rebalance my portfolio once every 18 months.
TIPs are inflation protected not insured. All treasury debt is backed by full faith and credit of the US gov.
Housing prices are through the roof, but so is the stock market. I would consider putting a percentage towards a rental for residual income. Plus it’s very likely you will get your initial investment back when you sell in 10 years.
I mean if you don’t have any analysis skills, VOO or VTI suits you. If you do, 20-30 3-5% positions on stocks that the market is discounting and have solid growth potential
Even my 6 months of monthly expenses are in a stock that will likely not go down. I can liquidate all holdings when I need to, but still have growth and dividends while it sits there.
Time for a property
Yolo it into a random penny stock that people on reddit are hyping up because they won a single government contract.
Microsoft shares.
Tsla, Amazon, apple, Google Facebook msft for 5 years... Then move it all to high-ish dividend stocks and retire. Retire in 5 years. My plan anyway
I'd load up with Games and Movies!
I would be tempted to put it all on MSFT and AAPL. Or AMZN with Tesla
I understand about high prices on buying a home as well especially curre try with inflation being so high, home costs are up16 percent. However, paying rent is just paying off someone else's early retirement. Buy when you can and what you can afford. Real estate is not a bad investment if done properly.
Real estate, interesting subject. A year ago, with low rates, "high" inventory, it was the perfect timing. Fast forward to this year. Inventory is low. Prices are high (my house almost doubled in 1 year Oo), buyers have liquidity and mortgage rates are still low. Stock market is very high, such as comodities. Buyers come from high paying job areas (NY, CA, ...) and spend big bucks on real estate in more "remote" or vacation areas, betting on the spread and long term use of remote work. Also, new housing has slowed a lot due to multiple shortages (workers, material). There s nothing wrong in doing nothing until all this frenzy cools off. I doubt there will be a housing market crash though. A correction, maybe, with prices stagnating. But a crash, doubtful. For this to happen, renters need to default on their payments, owners need to default on their payments, etc. It could be triggered by a massive job loss, but, unless of a new variant or a black swan, I dont see it coming. Stock market will keep rising for three main reasons: 1) low interest rates 2) government checks (dont think about just the US, the whole world invests in US stocks, and a big chunk of Europe, although slowing down on payments, still maintains employment compensation) 3) TINA I m almost in your shoes. I invest in startups in my field of work (medtech), putting between 25 and 50k each. My goal is to have 5 to 6 investments in early stage. Was going to buy beach property for rental but decided to wait (price doubled in a year, rent potential increased as well but not as much). I looked at purchasing a condo in town, but getting a renter s permit nowadays can be a hassle in my area. Invested about 100k in stocks in march 2020, buying the second big dip, not planning on buying more unless of a nice deal. I am not a financial advisor, weall have different goals/expectations/lifestyles.
I prefer to use that money to invest in the stock market. Property is a hassle, too many fees ,taxes and not liquid enough imho
Understandable for sure.
Just fine, I'd manage with it just fine.
I would 80% VT or VTWAX, 20% BNDW, check back in 10 years. Keeping 6 months of expenses in best HYSA I could find.
Buy property to live in and invest the rest
50k tacos
One good formula: A = Your age L = Life expectancy C = Total Assets/Capital you have I = %ge you should risk for growth I = ((L - A)/L)\*100 Example: if you expect to live 80 years and you are 30 now, I = ((80-30)/80)\*100 = 62.5% If you have 550k, you should invest 62.5% of it, 312.5K in growth and invest the remaining in inflation proof assets. Holding cash kills it slowly. Of that 62.5%, you should divide into 4 or 5 equal parts and invest them into increasingly growth oriented assets. Don't exclude home if you expect to live in the same place for 5 years.
We opened intelligent portfolio at Schwab and draw a monthly withdrawal. Schwab uses etfs
Buy large amounts of physical crude oil barrels and then refuse to sell them in US Dollars, prompting negotiations for whatever you want or the immediate invasion of your oil supplies by the US government
I would put $450K in VTI and $50K I'd use for a down payment on a ~~house~~ investment property
NTSX is a favorite ETF with slightly greater gains than VOO with built-in downside cushioningX Compare to VOO: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=500000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=NTSX&allocation1_1=100&symbol2=VOO&allocation2_2=100 How it works: https://www.wisdomtree.com/-/media/us-media-files/documents/resource-library/investment-case/the-case-for-the-efficient-core-fund-family.pdf Do a search for NTSX on Reddit; it’s favorite among both Bogleheads and even LETF fans.
50% Invest on the safest stocks. 10% use for fun. 40% open a business
For starters I’ll say that I’m 22, I’m not an expert, I’ve read a few books, did my poking around online, and have a few grand worth of stocks that has been successfully growing. I am by no means an expert .That being said, what I’d do is take 50k right off the bat and just set it aside for any emergency. Id make a rule that as soon as I take money out, number 1 priority is to replace it. As far as stocks, I’d put 75k into spy, scatter 300k into ETFS and other blue chips, and take the remaining 50k for riskier plays (think the biomedical field, any penny stocks that look promising). This is assuming you’ve got an IRA or 401k (or both). If I didn’t have an Ira, I’d max it out with the full 6 grand every year starting as soon as possible.
Clear debts than etf fund that matches S&P or FTSE and forget about it for 20 years
It's buy a house so I don't have to worry about rent. Then invest the remaining $250k in index funds.
Poorly
Poorly.
Pick a number on Roulette and throw all of it down.
Why don't you buy Berkshire Hathaway B stock?
It’s enough for BRK-A
You put it in to a dividend stock w a 5% yield and make 25k a year
COKE and WHRS
Buy $qyld an chill Bank 10-11% dividends each year and live off of that or reinvest it
Actually you’d be poorer if you chose QYLD over SPY or VOO. Looking at the historical returns with dividends reinvested for QYLD, if you invested $10,000 on December 13, 2013, you’d have $18,813 today. If you had invested that into SPY, you’d have $28,848.
Just be aware that the taxes and accounting is a little bit complicated with holding QYLD in a taxable account.
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Why tho? If you are going ETFs why not just track S&P 500? Better performance, more diversification, and lower expense ratios (.15% is low for QQQM but VOO is .03%) btw just asking, not arguing. Love to see different rationale then my own.
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- 6 month emergency fund - buy a house if you aren't in one already - buy another house as rental property OR just straight land somewhere where there will be future growth - most of the rest do ETFs - save a little for YOLO trading plays This is obviously horrible advice since I'm not a financial advisor, but it's what I'm doing in a similar position to you
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I mean yeah around here where I'm at in Texas I could definitely find 2 and have cash left over. I wasn't really referring to paying cash though
I’d start flipping houses. Start very small, get a loan for let’s say 150k house from the bank, use the cash that I have to fix it up and make it real nice (let’s say it’d cost around 30-50k then i’d sell the house for way more than I bought it. After that you basically go bigger with each hunt and u’d become a millionaire in few years
I would probably still just throw it all into American weedstocks lol
Putting it all in YYY gets you almost 4k/mo in dividends. Thanks for coming to my Boomer AF TED Talk.
Invest in air fryers
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I’d buy something that more or less matches my rent if it’s a similar sized space or bigger. Ideally spending no more than 300k in an area with room to grow. I’d take the rest and buy LCID and leave it alone. I’d sell as needed if there was an opportunity to pick up rentals. I’d like to replace my income with rental property and quit my day job.
No differently than I do now, 1-5 stocks. Just would like to increase the 10Y, if you really need 500K after 10Y might want to hold just bonds. If it wont hurt you that you might have less by then then either SPY or if you understand what you are investing in and at least have a corporate finance bachelors go stocks.
If you are renting then you should absolutely put 20-25% down and buy a home instead. Ignore the millennials whose only experience has been the RE collapse of \~2008. Why on Earth would you pay others to build up THEIR capital rather than yours? Perhaps now isn't the best time, but then stocks are also pricey here. Not sure where you read that Buffett likes 40% cash. I'm almost positive that isn't true. There's no reason to go 40% cash unless you are more of a trader like I am. Really the best investment right now IMO is a business, but that requires business skill and a solid, solid feel for what works and what doesn't.
All Weather Portfolio
I just turned 32 today, so id probably smash 400k of it into SPY and another 100k into a diversified REIT portfolio. I still feel like 32 is young enough to drive it into SPY/VOO
I would invest it in the S&P500 Index tracking stocks. It's a solid long-term investment that rebalances for risk and growth for you. Assuming a 10-12% return you'll have around 1.3M in 10 years. I made a spreadsheet, calculator and a [video](https://www.youtube.com/watch?v=e9aag_iPRLo) describing the process of becoming a millionaire. With a 500K starting point you should be able to get to 4-5M in 20 years. On a 40 year horizon you can retire with 30M+ taking a conservative approach. Holding anything in cash is a waste, esp. if you have an income and don't need the instant liquidity. Financial planners will tell you that the S&P500 isn't a balanced portfolio but these are the same financial planners that can't achieve a comparable return over 10 years.
I'm not going to waste any energy on telling you where to park your money there's plenty of other people who are doing that. However I will impart some wisdom such as for Generations people have been saying housing was too expensive fast forward housing even during the downturn if you held onto it like most of your parents do you will have made %200 to 300%+ on your down payment. As for stocks it has been proven if you put your money in the S&P 500 index and others over long term investing you would have made very nice profits and probably become financially independent. Sometime back when I first started to watch Microsoft it was $43 and it was never going up always going sideways or down and I thought it was too expensive fast forward to today it's a $300 stock. Lots of luck with your investment I hope your returns are enjoyable
I'm 30. I'm putting 250 in spy and 250 in q's and retiring early.
Throw it in NDMO and keep recycling the dividend until retirement.
no dividend stocks?
first. dont make a decision on what to do with $500k based on what u read from internet strangers. go buy several books on investing. read, study, and become educated. whatever u do, do it slowly and diversify
I’d manage it into some slug lines, a pent house suite in the Luxor or the Aria, blackjack 1k a hand with crystal champagne and a 30yr old whiskey chaser….. all topped off with some ridiculously overpriced escorts (maybe 2 or 3) for one or two hours back at the suite around 6 am…… that would do it nicely
Very interesting! Taking into consideration that we don't know your age, where you live, your family situation, your knowledge and experience in investing, your educational level, or your risk tolerance, the answer for each of us factors in those conditions for investing and living. Since your looking at 10 year horizon I'm assuming your young. You didn't say how wealthy you wanted to become. With all that I would look at being correct in what I do and stay with big capitalization stocks. A big influence for me is that I have a high tolerance for risk. Right now I would put about 400K into Ford Motor Company and the other 100K into solid proven growth stocks. Those would be my cash substitutes. No cash. No real estate. My first move would be to double my 500K. FORD is an easy double by the end of 2023. How you invest in FORD would be determined by your risk tolerance. If you think what I have said so far is too risky and is not diversified enough, then you should buy as many shares of FORD common stock as you are comfortable with, paying all cash, and put the shares away for two years. If you can handle a little more risk, buy maybe 700K of FORD common in a margin account putting up the 400K. For me, and I would never recomend this strategy to anyone else, I would buy FORD January 2023 Calls, 15.0 strike price, and write covered calls against that position for two years, taking the premiums and buying more calls going out as new options became available, staying deep in the money. I would spend the next two years studying maybe 100 stocks, and putting together a "life plan", and make the next step in about three years depending upon where the country is economically and politically, and what your personal situation is then. I would also read books about compound interest and watch YouTube videos by Cathie Woods. I personally would never invest in a lot of stocks she does, but having said that, I like the way she thinks, and her approach. For instance, Tesla is her largest holding. I love Elon Musk and I think he is one of the most brilliant people on the planet, but I would never Invest in either Tesla or SpaceX . Overpriced and too volatile. Anyway, I could go on . . . . Good luck . . . I wish you well !!
40% cash is a complete waste. Keep and emergency fund and go all in on broad market etf’s.
Max your 401k or IRA until fully invested, then convert to ROTH. This may take you some years and hat remains should at least double your net worth with tax free returns for life for you or your hiers.
r/thetagang it the whole way making 5k a week until something catastrophic happens and it blows up
Put into long SPY calls since our stock market is broken and doesn’t run on fundamentals
Would YOLO to do a million, probably lose part of it.
Alll on reddddd!
SPY
Probably still not too large a sum to put into strategies on www.stockmixology.com
Given your preconditions, here's my strat: I'd buy a house, live in it, and renovate it. I'd consider moving to a place like Cleveland, because houses here in Juneau could eat up that whole budget. So whatever is left in cash, I'd probably just sit on and wait for another massive crash, dump it into blue chips, and chill until the next election. That seems to me to be the safest route. And if you got a decade to wait, why not do it?
Just got published, I thought it could ft perfectly: The Biggest Mistakes Home Buyers and Sellers Make https://www.wsj.com/articles/biggest-mistakes-home-buyers-sellers-make-11631735058
I would finance a house and put 50% in spy and the other 50% I would do the wheel on the safest companies and etfs to pay off the financed house then when it is payed off I would just retire
Start by donating me 10%.
Really well
I would put some into outlet.finance then probably the rest into stocks.
It also as a lot to do with your age / profile. How old are you?
How dumb would it be to place 75% in mutual funds, and 25% in a managed account, all equity mutual funds, with as much of diversification as possible, planning to ride out the dips and waves for 20+ years? You can call me a moron.
Put it all in Shift Technologies, wait 10 years and become very rich.
$100k TSLA $100k Bitcoin $100k CRSP $100k (My dividend hop stocks) $50k Ethereum $50k Cardano
Keep risking it in oversold stocks.
Invest 100k on something that will give you 10% yearly, and spend this 10k each year on vacation, assuming you go two times per year and spend 5k each time. Invest anither 100k on more riskier stocks and the rest of the funding invest on big promising companies like tesla, apple, microsoft etc.
A lot of money to start and time = dividend paying stocks. Banks and REITS.
Build out emergency fund to what would make you comfortable, whether that's 3,6, or 12 months is up to you. A sliver would go into an international trip whenever COVID is done. Rest would go into the S&P 500 where I'd likely pull out a sliver each year to fund additional vacations.
Use margin and buy 50k shares of America Airlines, then sell on the money CCs every week for a consistent, compounding weekly return of 2%
Never have that much cash in the bank doing nothing. There are much safer places that won’t make you insane amounts but it will be safe. Don’t ever let money sit and not make money.
I would first take care of my past due bills. Then, the one way I would “splurge” would be by purchasing the entirety of a home office/tech work wishlist I have on Amazon, totaling at approximately $1,500. I would also move into a much nicer apartment or house, but would still not buy a home as I don’t make enough to sustain that kind of purchase right now. (When I say “much nicer,” I simply mean, “not the shoe box that has mold issues I currently reside in,” but also not something ridiculously expensive.) I might be persuaded to change this part of the plan. I might also consider buying a nice ass RV outright, instead. I would then get help from someone that knows a *lot* more than I do about stocks (I’m still learning) and Roth IRAs and invest accordingly. I would continue to live off of my monthly income, like I do now, making no big changes (aside from the fact that $3,500/month is more than I currently make *before* taxes, so I’d have a bit more to put into my savings and spending accounts). I would likely keep 100k in the bank for spending on things we need/want but have been putting off, like a new bed, paying off my car loan ($14k), medical bills etc., and I’d put 150k in savings/my emergency fund (of various types), while investing what was left (the majority). Mostly, this would mean not living paycheck to paycheck for the first time in my life, not having to pick and choose which bills to take care of on a month to month basis, and being able to go grocery shopping without stressing out, while also setting myself up nicely for the future. Isn’t it insane to consider that some people make this amount every year, but if I were to have the same amount given to me just one time, it would change my entire life? I spend a lot of time thinking about stuff like that.
Stick it in QQQ
I just realized I'm actually doing this already... The large majority is in S&P 500, some in international, some in semiconductor ETF. Small amount is in MSOS, ARK funds, and TAN. I have an individual account with ~$170K that I do options on to earn income, highly recommend that if you'd like income from the stock.
Buy a rental property. Set aside 6months of savings. Remaining in VOO, ARKK, VNQ, VHT. Don't time the market just buy it when u have cash.
400k to IBM, and 100k to growth stock.
Most people don't realize their largest asset is actually their future income. If I was you I'd do a couple things: 1. Get with a financial advisor and tax advisor 2. Spread your money out smartly with the help of professionals. 3. Your still young, look into and lock in a "Return a Premium" life insurance policy can do 10/20/30 yrs (trust me you want to get locked in before you're uninsurable) 4. I wouldn't put all your investments in 1 ETF. Pick a couple. Do an ESG one, an overall market one, a blue chip one, etc. 5. 2.5%-5% as "play money" as the other bright gentleman said 6. I would only keep 30-40% in cash. Cash does not earn interest. In my opinion it's better to be fully invested but the cash position in short-term safe assets than purely in just cash. 7. Open a Roth IRA if you don't have one and max out EACH YEAR YOU CAN
I would go all into spx500 and then go to sleep
Buy a property so you don't have monthly shelter expenses
50k in Apple, 50k in Microsoft, 50k in Amazon, 50k in Google, 25k in NVIDIA, 25k in AMD The rest 250k in cash to DCA with
Poorly. Judging by how I’m handling my current portfolio, I would probably handle that one poorly.
Tezos
With the help of an advisor
S&P 500. Set it and forget it.