Receiving 500k in cash due to some Biden W estate planning.

Early 30s, no spouse or children, Live in US, Income 120k, Risk Tolerance High, Time Frame Long Term (Ideally retiring in late 40s early 50s), current NW worth is about 270k (~160 in the market, ~ 90 in home equity, 20 in cash). Only Debt is a 30 year mortgage for 230k at 2.75%. I spend about 60k a year in general life.

Planning to gift out 25k, **** around with 25k and invest the rest. Vanguard is my preferred broker, have 80% or so in vanguard mutual funds or etfs. Pretty much all passive, a few thousand in actively managed funds, and a few thousand in a trading account for fun. Current allocation is 7% bonds 23% international stocks, 60% US stocks, 6% REITS, 2% Gold, 2% Bitcoin ETFs.

Thinking I will do something like the below, but would like to hear other opinions. Splitting it into as few positions as possible appeals to me.

20k BND
290k VTI
125k VXUS
15k VNQ

Forgot to mention, already maxing out a roth each year and contribute 6% to employer 401K with a 9% Match. So the plan is funds will be in a standard brokerage account.

Since you're not really allocating much to BND or VNQ...why not just put it ALL in VT? With the huge drop this year, I dramatically simplified my portfolio, tax loss harvested a ton of stuff and consolidated most of my taxable account to VT. I also still have a pretty significant allocation to VBR because I want the small cap value tilt.

Thanks, that sounds like a good plan. I think I will dump the majority in VT.

Okay just a reminder after deleting a bunch of stuff - this thread is not for discussion of or advocating ridiculously risky stuff like bitcoin or options.

What would you do with the cash? I have $225,000-$250,000 income with $250,000 sitting in cash. $250,000 home loan 4.25% rate. Married with 2 kids.

Depends on your goals and the rest of your financial situation. What is the purpose for the money?

At a minimum, if you want to keep it 'cash', I'd make sure you're in a high yield savings account or a quality short term treasury bonds fund.

He gave enough clues for us to solve what his goals ought be.

You should probably just start paying down on your mortgage

I would consider refinancing that home loan if you are staying in the house, I just got 2.75% for about 2k in fees on a 30. Would not pay down the mortgage even if you keep it a 4.25% and would invest in the 250k - whatever you consider a comfortable E fund. Do you have a 529 open for your kids? If they will ever pay tuition it is worth looking at. Broad based etfs or target date funds would be easiest.

If you absolutely aren't going to invest the money, then I'd probably pay off the mortgage and save the 4.25%, since you should be able to get a loan to pull cash out for a few grand down the line. Would strongly prefer investing in retirement accounts or 529 though.

edit: If you hunt around you should be able to get 500+ in free monies when opening a new brokerage account.

Where did you get a loan for $2000 closing cost? How big of loan?

230k loan, one of the online providers. Didn't need an appraisal and about 1,500 in promotional fee waivers.

Do we have a thread for a discussion of what we're doing in terms of investing? I'm probably not worthy of a thread in myself but we're looking to invest around £5-600k over the next year or so. We're relatively financially secure so this will be taking ownership stakes in and growing companies.

Probably can just keep it in my PGC but probably more relevant to BFI if anyone is interested.

I just sold my business, and expecting to close/fund EOM. I should net around $450K after taxes and paying all my outstanding debts (IRS debt, credit cards, vehicle loan). I will still be employed with the new company, so I'm confident I will earn decently until the second exit in 5 years (have a little equity still in the company) but nothing is guaranteed at the end of the day.

I have no idea what to do with this money, and the market being so high, along with the political climate worries me a correction is coming (I understand you can't time the market). I'm single, own no stocks or investments and currently rent. Being debt free will feel awesome but I need to start planning.

I'll probably put 20% on a house which may end up being $100K (very high priced RE market) and like to keep some liquid for potential opportunity to start another small business, but beyond that I'm pretty lost on where to stick $300K+, most of which I want to be a retirement fund really and probably not touch for 20+ years, which leads me back to just throwing most in index funds but no idea.

Thanks for any thoughts-

Congrats on the successful exit - I'm sure you will get some good advice here, I'm not at all versed on US retirement options myself but good to go into it with eyes open to the current climate.

The standard answer is to put it into a Vanguard target date fund and not think too much.

If you are really worried about "the market being high" then add to the target date fund at regular intervals over the course of a couple years.

Either way, once you have decided what to do, don't fiddle with it. Fiddling is unlikely to work out well.

Think you need to decide on a timeframe, do you want to protect value to use in starting another business in the next 2-5 years or do you want to invest for retirement on a long term scale for retirement.

Would agree with the target date fund and forget as the easiest option but you could very easily save the fees and throw together a simple portfolio yourself but you would have to manage it annually ish. Target date fund could easily cost you a few 100k by retirement in additional fees, do that math (personalcapital.com free tools will do it for you) and decide if those fees are worth the trade off.

Thanks to you and others for the feedback.

Can you expound on the "manage it annually" portion, and what this may consist of?

I am rather fee adverse, and I agree with the help of others I need to tap for advice and some personal research I'm confident I could create a simple portfolio to lock up a chunk of this that I wanted to not touch or look at for xx years and be safe without paying fees to do so.

The total fee is 0.14% annually. So, with your $300k investment you are looking at $420 this year.

You can manage it yourself, which would involve buying and selling stocks and bonds to rebalance your portfolio. The fun part is that you are nowhere near wealthy enough to purchase a well-diversified bond portfolio through individual bond issues on the open market, so you will have to pay the fee for some fund or set of funds either way. The other fun part is that you are nowhere near wealthy enough to purchase a well-balanced portfolio of small stocks through individual stocks, which means you will have to purchase a fund to cover that and pay the fee. The other other fun part is that you are nowhere near wealthy enough to purchase a well-diversified multinational portfolio of anything, so you will have to purchase a fund and pay that fee. The other other other fun part is that your mistakes in rebalancing and selecting which index to do a half-hearted attempt to copy will (much more likely than not) cost you far more than 0.14% annually that you can't quite save in fees due to the first three fun parts.

Re Managage annually.

Periodically you would just want to check up on your holdings and make sure your allocation is still in line with your goals. If not you would just need to rebalance. Ie: Day Zero you buy 30% of etf X, 20% etf Y, 50% of etf Z. A year goes by and ETF X is up 40%, etf Y is up 30%, etf Z is down 10%. Your allocation has changed due to the g/l and you would need to sell some X and Y to buy some Z if you wanted to stay with your original allocation. As you age and your investment timeline changes most also want to take less risk. Target date funds will handle all this stuff for you.

So, your method of saving upwards of $100k in lifetime target date mutual fund fees is to pay $99,000 in lifetime ETF fees. Pretty good plan.

Not that it matters but to get to $100k lifetime ETF fees, assuming a 0.11% fee difference between VTI and Vanguard's Target Date Funds, would require someone to invest like $3 million a year for 30 years. Plus there aren't any additional fees tacked onto Vanguard Target Date funds, they're just forced to use Investor Class shares instead of Admiral Class shares/ETF versions. Plus you can't even buy Investor Class shares these days.

Not that it matters.

I don't think the suggestion was to buy VTI and VTI and VTI and rebalance between it. Presumably building your own target date fund would include such things as building something that resembles a target date fund with more than one thing in it.

Are you not compounding?

Just quickly putting some numbers into this compounding calculator: https://www.nerdwallet.com/banking/c...est-calculator

Lump sum of $100,000 compounded monthly at 10% at the end of 30 years is $1,984,387.

With the 0.11% difference in fees you mentioned: Lump sum of $100,000 compounded monthly at 9.89% at the end of 30 years is $1,920,485.

So in this example, for every $100k you invest, that tiny 0.11% difference in fees costs you $63,902.

And that's just the 0.11% difference. It costs you far more than that in total fees.

Mea culpa on that.

But there are no additional fees for Vanguard's Target Retirement funds, it's from the acquired funds being investor shares vs. admiral shares/ETFs.