I'd go with 1 brokerage, Index fund most of it, keep 20% cash for misc investments (ethereum). Hire a trustworthy accountant.
It's only money. Now you have some, congratulations. Get back to focusing on the things that matter!
Ask HN: What to do after $8M (all cash, post tax) exit?
501–510 of 531 posts
Re: Ask HN: What to do after $8M (all cash, post tax) exit?
#502Earlier quoted context omitted.
https://www.reddit.com/r/AskReddit/comments/24vo34/whats_the... > You will be encouraged to hire an investment manager. Considerable pressure will be applied. Don't. > Investment managers charge fees, usually a percentage of assets. Consider this: If they charge 1% (which is low, I doubt you could find this deal, actually) they have to beat the market by 1% every year just to break even with a general market index fu…
>>...they have to beat the market by 1% every year just to break even... It's even worse than that. 1% ON TOP of inflation, which is reported as 1.9% but many financial experts say the actual figure is closer to 4% once goods such as energy and food are factored in. So the hypothetical investor must make ~5% just to break even. Anything less is a loss of spending power. Add 4% to realized losses and the figures can b…
Financial experts most certainly do not say anything like 4% inflation in the US.
Energy is extremely volatile, so it’s annual rate spikes up and down by as much as +/- 25% in any given 12 month period, but over longer time spans it’s close to flat, with US consumer prices driven down by fracking.
Food prices, similarly, are volatile, but have trended flat over long timespans.
Food and energy are going to be a tiny, tiny fraction of consumption for someone living off float from an $8 million windfall; core inflation (removing the volatile food and energy categories) is the right number to pay attention to.
Re: Ask HN: What to do after $8M (all cash, post tax) exit?
#503As someone suggested in comments, save at least 1 year worth in a safe haven (preferably gold) No need to freak out; Relax! Do NOT donate - That is being irresponsible Do NOT hire someone - It's not their money; you were at the right place at the right time - not them - you have the responsibility to invest right. Please do NOT retire - you are at your prime age of contributing back to the society - surely, take more…
Just to be clear, I'm not against helping other people. This is what I meant by NOT giving to charity - https://www.keela.co/blog/nonprofit-resources/charity-vs-phi...
"Don't give a man a fish, teach him how to fish"
Re: Ask HN: What to do after $8M (all cash, post tax) exit?
#504Earlier quoted context omitted.
Assets matching liabilities is an accounting idea that has nothing to do here. Wanting to do something is not a liability.
Liability is exactly the right term for it if it costs money.
No. Liability is money you have an obligation to transfer.
Dreams that involve money are not liabilities, at all.
Re: Ask HN: What to do after $8M (all cash, post tax) exit?
#505Take a trip to Jersey (the island) and you will be well taken care of. Another place is Marbella/ Puerto Banus Spain, good place to park money and make some while parked.
Re: Ask HN: What to do after $8M (all cash, post tax) exit?
#506Earlier quoted context omitted.
when you have $8mm, sitting on your hands for a year costs you ~$250,000.
If you make rash decisions based on your perception of opportunity costs at that kind of sum, it's a good first step for losing it all. I'm also surprised by the attitude of 5% gain is easy and guaranteed. It's not. Neither treasurey funds nor real estate yield anywhere near 5% and we are many years in a bull market. Expecting 5% yearly ROI in the market over the next decade is optimistic.
not opportunity cost, real dollar loss to inflation. the opportunity cost is even greater.
also I don't know why you are talking to me about 5%. $250k is not 5% of $8mm.
Re: Ask HN: What to do after $8M (all cash, post tax) exit?
#507Buy one or two houses in a nice seaside area, rent them, live all your life with a continuous income and do not spend too much. I would do this if this crappy software project management work I am doing gave me the same money :)
Re: Ask HN: What to do after $8M (all cash, post tax) exit?
#508I don't suggest the 'do-nothing' route. Time is limited. I'd suggest: 1) Splurge a little bit. Like $100k. Buy that Oculus VR you've been thinking about. Trade in your car to the new Tesla Model 3. Your wife has been eyeing a vacation to Hawaii for a few years now, go do it. Finish off your mancave basement project. Life is great, enjoy the fullness thereof. Don't feel bad about buying your kids a dozen new nerf guns…
I just wanted to chime in to say that this is just terrible, terrible advice.
It's clear you're not speaking from experience.
One has to be incredibly careful with a windfall like this. $8m is not a whole lot - certainly nothing like what you're fantasizing. Behaviors like you're suggesting can be incredibly damaging and snowball fast.
This is why most people who obtain sudden windfalls (an extraordinarily high percentage) go broke within years.
Re: Ask HN: What to do after $8M (all cash, post tax) exit?
#509Take the time to get one or more really, really good references to true, professional investment management services. (Not showy and "expensive", but good -- not "cheap", either, but real value for the real money you spend. This can be hard to determine, if you don't already have connections. And it can build on personal relationships; however, those can cut both ways, so be cautious.)
You want safe, diversified portfolio. You may be a bit challenged, near the end of the year, trying to position to manage tax exposure. But overall, be thinking long-term, not short-term.
Add to your daily, weekly, monthly schedule, time and resources for learning investment management. You don't have to do it all at once and overwhelm yourself. First, get safe. Then, learn, so that you can speak with and interact with your advisors from a knowledgeable position. You'll come to know what investments you're comfortable with, and what not. You may well also get better service from them, as a result. The good ones appreciate well-informed clients; they may even enjoy talking with you, on a personal level but also to the extent you have knowledge of and insight into your industry/segment that they may be interested in (not confidential knowledge).
This is what I know not from having large assets, myself, but from observing and speaking with a family member who does.
The professionals really do help, but he's also had to bring his own considerable knowledge and smarts to the table and sometimes override their advice. It's really more of a partnership, than one side or the other calling all the shots. If the people you are working with don't have this perspective (especially once they get to know and hopefully respect you), you may be working with the wrong people.
Re: Ask HN: What to do after $8M (all cash, post tax) exit?
#510Earlier quoted context omitted.
If you make rash decisions based on your perception of opportunity costs at that kind of sum, it's a good first step for losing it all. I'm also surprised by the attitude of 5% gain is easy and guaranteed. It's not. Neither treasurey funds nor real estate yield anywhere near 5% and we are many years in a bull market. Expecting 5% yearly ROI in the market over the next decade is optimistic.
> we are many years in a bull market I agree. Having most of his capital in the stock market or real estate is a great opportunity to lose money in the next 5-10 years. Holding cash and investing it when the market is down is a good idea. Buffet currently does that because Berkshire thinks [1] that most of the stocks are overvalued (he waits for the next crash to buy them when they're cheap). Other assets which are s…
$SPY has lots of room to go. This bull market is just starting to simmer until the market tells us otherwise. Further to that, for many, me excluded, time in the market is better than time in the market. If you can afford to just leave all your money in the market, overtime, statistically, it has been proven to get better returns when we recover. Suppose OP drops $8M into the market and it dips to $150, it will likely recover in time and it won't be spent if you just leave it. You can also do the 4% withdrawal that many financial blogs suggest.
Leaving cash on the side will eat you alive especially when inflation goes higher. However, if inflation goes up significantly over the next decade, think 15-20% inflation per year, having money on the side to buy assets will give OP the ability to become an asset owner, as inflation provides the ability for the largest transfer of wealth, assuming items can be paid off and investments are made in assets which gain value, i.e. houses, not cars.