Ask HN: I have $450K cash, what should I do to maximize my return? • Hacker News Board

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#81

Post by quotemstr » Sat, Aug 01, 2020, 5:02 PM UTC

throw0101a wrote: post #29

> I'm not comfortable investing the entirety into an index fund, given the current socio-political climate. Over the the long term there is not really anything better to do with it than equities: the Great Depression, World War 2, gold standard retirement, 1980s inflation, etc. Even if you only invested in the peaks, you'd still do quite well over the decades: * https://awealthofcommonsense.com/2014/02/worlds-worst-m…

I'm an index fund skeptic. What would happen in a world where everyone invested in index funds? Capital allocation would go haywire. You can't create value out of nothing. ISTM that the more people push on index funds, the more overvalued equities in the index become relative to those outside the index. I'm not sure that retrospective analysis saying index funds are the best applies going forward in a world where index funds are much more popular than they were in the past.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#82

Post by tzury » Sat, Aug 01, 2020, 5:05 PM UTC

Use it as down payment for three condos in Austin TX and rent them.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#83

Post by kstenerud » Sat, Aug 01, 2020, 5:07 PM UTC

It's a bit late in the cycle, but you can still make a few bucks in gold. As soon as your friends & family start talking about investing in gold, sell.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#84

Post by dmoy » Sat, Aug 01, 2020, 5:07 PM UTC

pedrocr wrote: post #15

This may be an interesting starting point: https://www.reddit.com/r/personalfinance/wiki/windfall

Actually surprisingly solid advice, even though it's reddit.

Helps that the first sublink in there is bogleheads :)

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#85

Post by branweb » Sat, Aug 01, 2020, 5:08 PM UTC

quotemstr wrote: post #81

throw0101a wrote: post #29

> I'm not comfortable investing the entirety into an index fund, given the current socio-political climate. Over the the long term there is not really anything better to do with it than equities: the Great Depression, World War 2, gold standard retirement, 1980s inflation, etc. Even if you only invested in the peaks, you'd still do quite well over the decades: * https://awealthofcommonsense.com/2014/02/worlds-worst-m…

I'm an index fund skeptic. What would happen in a world where everyone invested in index funds? Capital allocation would go haywire. You can't create value out of nothing. ISTM that the more people push on index funds, the more overvalued equities in the index become relative to those outside the index. I'm not sure that retrospective analysis saying index funds are the best applies going forward in a world where ind…

Not the op but I wish downvoters would comment giving their reasons. I remember seeing something about this in the atlantic a while back, and it would be good to know if/why it's a bad argument.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#86

Post by projektfu » Sat, Aug 01, 2020, 5:08 PM UTC

lowercased wrote: post #75

Without knowing more about you - age, health, goals, risk tolerance, other obligations, etc - it's all just random suggestions from the internet. My random suggestion here is diversify in to a few different equities areas. US, international, etc. I mostly have a few 'general market' funds, but a couple that are focused on tech companies, and they've outpaced the general market over the last several years. Keep some i…

If you do use a financial advisor, use one that charges hourly. The ones that charge a percentage win regardless of your outcome. I have been very unimpressed with their work when I have seen it in action. The flat fee ones are incentivized to give you less than what they would do in the same number of hours. Probably you can set up an initial allocation and learn about rebalancing, and you’ll only occasionally need advice in the future.

Another good book to read is “A Random Walk Down Wall Street”.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#87

Post by technicolorwhat » Sat, Aug 01, 2020, 5:09 PM UTC

Maximise what return? Money? Gratitude? Ego?

- If you'd like to make a dent into ones life, help someone out with a low income to achieve their goals. Like paying for a drivers license or buying a okay car so mom can bring her kid to school. With that kind of money you can help a lot of people. - If you want to use money to feel safe, put some money on therapy, to know you never needed it in the first place and to get to know yourself. Buy a piece of land for everyone to live on your family and friends. - Ego? Spend it on cars? Parties, everything that was unreachable and plaster your confidence. - Want more money? Invest it in arms, wind energy, or start your own fund in the balkans.

Up to you

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#88

Post by jasoneckert » Sat, Aug 01, 2020, 5:09 PM UTC

My advice is unconventional. Why maximize your return? Money is a renewable resource, but time is not.

If I were you, I'd spend the money to enjoy my time with others I care about and donate the rest to others in need.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#89

Post by actuator » Sat, Aug 01, 2020, 5:11 PM UTC

owenversteeg wrote: post #45

Ever since John Bogle created the first index fund about 50 years ago, the advice of simply put your money in, don't try to time the market, and divide between an allocation of stocks and bonds based on your risk tolerance has performed far better than anything else. This includes periods where the market has been very over-inflated. If you had the worst possible timing and put your money in around the absolute peak…

This has been true for the US markets till now but I am always scared to think of a scenario where they go the way of UK markets have done in the last decade. Look at one[1] of the FTSE 100's Index fund returns. They stand at 3.58% annualised, i.e your money is now 1.4x of the original amount. This is considering the fact that we are looking at returns from Aug 2010 levels when the FTSE index was already 20% down from the 2008 peak.

So the peaks I see now in Nasdaq actually look very scary to me. Anyway, I think if they decide to go ahead with equity, they should spread it out over a period.

[1] https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.asp...

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#90

Post by cjbprime » Sat, Aug 01, 2020, 5:12 PM UTC

jasoneckert wrote: post #88

My advice is unconventional. Why maximize your return? Money is a renewable resource, but time is not. If I were you, I'd spend the money to enjoy my time with others I care about and donate the rest to others in need.

Because managing the money wisely allows you to exchange less of it for more enjoyed time and more donation power, of course.

Your goal of using money to make you and other people feel good is not unconventional; the advice is unconventional because it's not an effective way to reach that goal.