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

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

#421

Post by Justin_K »

monktastic1 wrote: post #357
alex_sikora wrote: post #246

Earlier quoted context omitted.

I'd probably recommend https://old.reddit.com/r/FatFIRE over /r/pf as it's more likely to have people that have experienced getting a large lump sum like this.

FatFIRE is for people who want to live large off their savings (usually understood as >$100k/yr passive income, which generally requires $2.5M+ in invested assets). That doesn't seem to describe OP's position. If FIRE is an interest, then https://www.reddit.com/r/financialindependence/ is a better bet.

4% roi is far worse than market and real estate averages.

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

#422

Post by humank »

nknealk wrote: post #123

Surprised not to see this mentioned anywhere. In finance, we don’t look at maximizing total return but rather risk adjusted return. Buying a lotto ticket has amazing total return if you hit the jackpot but really bad risk adjusted return. The thing you should spend some time doing is deciding what your risk tolerance is and how much variance in your portfolio you can stomach. Then you can start talking investment str…

A lottery generally has negative expected return, so probably not the best example to use

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

#423

Post by triceratops »

gfodor wrote: post #417
triceratops wrote: post #416

Earlier quoted context omitted.

I think we have different ideas of what "average" advice is. People on Bogleheads don't get rattled when the market drops - they buy more aggressively. Listening to people who got rich starting their own business, or making shrewd investments isn't useful for most people. That approach is hard to replicate and has far more risk. Someone who ground their way to financial independence with disciplined, diligent, and pa…

Saying that index based investing doesn’t involve luck is exactly what I was getting at by the usual advice. Unfortunately, buying index funds, particularly US stock market index funds, is a matter of investing based upon selection bias. On the long timelines demanded by index investing, staking your claim on the US equities market is hugely risky, particularly when you are doing so without an investment thesis that…

> Ask yourself if there is any condition where you would deallocate from stocks.

It's reasonable to deallocate from individual stocks, or to sell to reallocate to other investments and keep to your plan. Deallocating from the stock market entirely, long-term is a much stronger position to take. There would need seismic shifts in the global economy to do that, because it's like admitting that on aggregate companies aren't going to make money anymore, right?

> staking your claim on the US equities market is hugely risky

I don't believe I ever said you should invest solely in the US equities market. There's also REITs, ex-US developed markets, bond markets, emerging markets.

> The reality is half or more of that common sense advice was proven idiotic 50 years later

Can you share sources, please? I'd love to learn more.

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

#424

Post by rabidrat »

Justin_K wrote: post #421
monktastic1 wrote: post #357

Earlier quoted context omitted.

FatFIRE is for people who want to live large off their savings (usually understood as >$100k/yr passive income, which generally requires $2.5M+ in invested assets). That doesn't seem to describe OP's position. If FIRE is an interest, then https://www.reddit.com/r/financialindependence/ is a better bet.

4% roi is far worse than market and real estate averages.

Not anymore.

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

#425

Post by icedchai »

Justin_K wrote: post #421
monktastic1 wrote: post #357

Earlier quoted context omitted.

FatFIRE is for people who want to live large off their savings (usually understood as >$100k/yr passive income, which generally requires $2.5M+ in invested assets). That doesn't seem to describe OP's position. If FIRE is an interest, then https://www.reddit.com/r/financialindependence/ is a better bet.

4% roi is far worse than market and real estate averages.

4% is what FIRE folks consider "safe" over long periods of time. It is based on the well-known Trinity study: https://en.wikipedia.org/wiki/Trinity_study

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

#426

Post by arcticbull »

arcticbull wrote: post #270
nordsieck wrote: post #264

Earlier quoted context omitted.

> I don't think most people need a financial advisor, but if I had a $450k pile of cash and I wanted to understand the tax consequences of various investments I would definitely pay for a consultation. I think you have to be a little careful with this. Shockingly, most financial professionals do not have a fiduciary duty to their clients. If you pay for advice, I'd definitely recommend getting one that does have a fi…

Indeed, the Trump administration rolled-back an Obama era rule that financial advisors must be fiduciaries. I'm not sure most people realized that happened.

Sorry if that came off as political, I mentioned the leadership at the time as epoch markers as I didn't recall off-hand the specific dates. I suspect people didn't realize that the fiduciary rule wasn't a thing prior to 2015, let alone that it was over by 2018, and it is my understanding the Trump administration was looking at resurrecting the rule.

[1] https://www.nytimes.com/2018/06/22/your-money/fiduciary-rule...

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

#427

Post by tuesdayrain »

Surprised I'm the first person to mention Ethereum. And by the amount of people bashing Bitcoin. I suspect those are mainly emotional responses by people who are unhappy they knew about cryptocurrency for years and missed out on profits. In my opinion it's foolish to not dedicate at least 5-10% of a portfolio to high risk assets.

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

#428

Post by csmiller »

JulianWasTaken wrote: post #98
branweb wrote: post #85

Earlier quoted context omitted.

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.

Not a downvoter (nor a financial expert) but to check the argument seems at least reasonable to check whether the proportional return of Vanguard funds has decreased as the fractional amount of money invested with them vs. the total stock market has increased. Seems unlikely the answer is yes (probably because in fact you are not investing in "nothing" -- there's value in having money itself, same as interest at a ba…

By purchasing stock (not at ipo/sep), you aren’t giving money to companies, you are buying the share from another entity.

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

#430

Post by Tiktaalik »

RomanPushkin wrote: post #59
Tiktaalik wrote: post #38

Buy land in Portugal or Malta and leverage it to get a EU Passport.

Why do you need EU passport? Seems like unreasonable investment

Have you not noticed that due to the disastrous covid response that the USA passport is basically worthless right now?
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