A classic diversified portfolio is your best bet. Ie bit of everything
Ask HN: Steady 4-5% on $5M?
11–20 of 37 posts
Re: Ask HN: Steady 4-5% on $5M?
#12Earlier quoted context omitted.
Could you please explain your thoughts on this? My current operating philosophy on real estate prices are that inflation is demand driven (buyer purchasing power), and that individuals are already maxed out (40 year mortgages, rents 50% of income). The only reason I can see real estate continuing its climb is if government policy continues to insist that home prices can never depreciate. If that plays true, then sure…
(not the GP) > government policy continues to insist that home prices can never depreciate Those policies are for old people cashing out, rich people buying investment properties, and even richer people who own real estate developers. What do you think are the odds that in... let's say 5 years, either of these groups will have less weight in public policy making than they do today? I think it's very, very close to ze…
Agreed, fixing real estate crisis is taking money away from the main wealth storage of most people. Apart from a catastrophe I don't see the elected officials do anything about it.
Re: Ask HN: Steady 4-5% on $5M?
#13Selling covered calls on blue chip dividend stocks. Fixed income etc
Re: Ask HN: Steady 4-5% on $5M?
#14High dividend stocks or REITs.
Some markets are currently paying more than 4% as a whole: https://www.starcapital.de/en/research/stock-market-valuatio... . Russian stocks pay above 7%. Asian REITs have high dividends as well, e.g.: https://sreit.fifthperson.com/
Re: Ask HN: Steady 4-5% on $5M?
#15This is the whole premise of FIRE[1]. Invest in a S&P index fund and you should be able to pull out 4% or so without ever running out of money. 1. https://old.reddit.com/r/fire
https://old.reddit.com/r/financialindependence is the right link
Re: Ask HN: Steady 4-5% on $5M?
#16If you mean 4-5% annual average return, just stick it in a total stock market index fund. There's no reason to pursue interesting or creative ideas or even spend any brain power researching all sorts of options.
Since its inception in 2000, VTSAX has an average annual return of 7.18% [0]. That's 20 years, multiple US presidential administrations, multiple people running the Federal Reserve, and a big economic downturn (2008) thrown in. It's boring and won't give you any cool stories to tell at parties but you'll likely get the 4-5%.
[0] https://investor.vanguard.com/mutual-funds/profile/performan...
Re: Ask HN: Steady 4-5% on $5M?
#17There's no low risk options. The fed is holding interest rates so low that everyone is struggling to find a place to invest money. The economy is in a strange place right now. Record high tech stocks with near record high unemployment. Incomes and stocks temporarily inflated by governement rescue money worldwide. An oncoming eviction/default bomb that governments keep kicking down the road. If I had a significant amo…
Even products like High APY savings accounts are under 1% at the moment, so 50% into a Swiss account is unlikely to provide a large return. Also, why Swiss, and what currency would you hold in that institution?
One thing to consider is protections against any one financial institution having liquidity issues or folding — with the US and something like a savings account this would be FDIC Deposit Insurance, which covers $250k per depositor, per FDIC-insured institution.
Re: Ask HN: Steady 4-5% on $5M?
#18As others have written, there is no sure way of generating steady 4-5% in current markets. So think about what do you want to use the money for? Can you reduce your future known expenses or buy something now that you know you want?
If you have a mortgage, probably worth paying it off.
Invest in reducing energy costs -- insulation, renewables if in right place.
If you want a yacht, buy it now and rent it out until you need it.
Re: Ask HN: Steady 4-5% on $5M?
#19Real estate should still be a good bet for 4% real. It would be better with leverage if you could borrow at least 50% at some outrageously low rates but it’s not passive.
Could you please explain your thoughts on this? My current operating philosophy on real estate prices are that inflation is demand driven (buyer purchasing power), and that individuals are already maxed out (40 year mortgages, rents 50% of income). The only reason I can see real estate continuing its climb is if government policy continues to insist that home prices can never depreciate. If that plays true, then sure…
Real estate can climb for a number of reason. Either a shortage of housing, falling interest rates or just pure inflation. If you can somehow tap into really low rates, even if the house drops a bit in value you can extract enough rent to cover holding cost and then if you just match real (government inflation number is a lie imo) inflation with no growth you would be already be at 4%
Re: Ask HN: Steady 4-5% on $5M?
#20Selling covered calls on blue chip dividend stocks. Fixed income etc
There is even an ETF that automates that: QYLD