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Started By
Message
With the market at current high levels and in age 55 how would you invest if you sold
Posted on 2/28/21 at 7:26 pm
Posted on 2/28/21 at 7:26 pm
Your small business? My brother in law sold his company and ended up putting about $3M in his pocket after taxes. He has never invested into anything other than his small business. He is now frozen and cannot make up his mind what to do. He no longer works for the business or has means to generate great income. He has very little debt (that I know of). Today he was asking my opinion.
Hate to recommend stocks at the current levels particularly with current political climate. Just seems like with that amount of money he could get something that would easily earn 4–5%.
He is meeting with Fisher Investments and Edward Jones this week to get their input. Concerned about fees.
What would you do at 55yo?
Hate to recommend stocks at the current levels particularly with current political climate. Just seems like with that amount of money he could get something that would easily earn 4–5%.
He is meeting with Fisher Investments and Edward Jones this week to get their input. Concerned about fees.
What would you do at 55yo?
This post was edited on 3/1/21 at 12:32 pm
16
Posted on 2/28/21 at 7:28 pm to NAsh-vegas Tigah
Dividend based fund, Chevron, Lockheed, other big names.
Posted on 2/28/21 at 7:29 pm to NAsh-vegas Tigah
Lol at netting $3M and then walking into Edward Jones for advice.
Best piece of advice is to not use Edward Jones.
If he’s bored maybe he could look into real estate investments?
Best piece of advice is to not use Edward Jones.
If he’s bored maybe he could look into real estate investments?
Posted on 2/28/21 at 7:32 pm to GeneralLee
He has never invested one bit. Where would you go? What would you do?
Posted on 2/28/21 at 7:32 pm to GeneralLee
Look into OTRKP
It’s the preferred shares for OTRK. OTRKP offers a 9.5% divi and trades in a pretty tight range. For example, the stock actually went up a few pennies during last week instead of down like most everything else did.
It’s the preferred shares for OTRK. OTRKP offers a 9.5% divi and trades in a pretty tight range. For example, the stock actually went up a few pennies during last week instead of down like most everything else did.
Posted on 2/28/21 at 7:41 pm to NAsh-vegas Tigah
Sit down with a fee based financial advisor and go from there. If just looking at traditional investmens, probably would be close to 50/50 stocks and bonds at that age.
Although like I said, if he wants to remain active I would take a good chunk of that $3M and get into real estate.
Although like I said, if he wants to remain active I would take a good chunk of that $3M and get into real estate.
This post was edited on 2/28/21 at 7:44 pm
Posted on 2/28/21 at 7:45 pm to NAsh-vegas Tigah
Step 1: cancel the Edward Jones appointment.
Posted on 2/28/21 at 7:47 pm to GeneralLee
quote:obviously, it depends. But generally speaking, that's pretty conservative. At 50,you still have 30 years to spend.
probably would be close to 50/50 stocks and bonds at that age.
Obviously, like I said it depends, and nothing wrong with capital preservation at that point.
As for OP, no one here knows the whole picture or his goals to give adequate advice other than speaking to an advisor
This post was edited on 2/28/21 at 7:52 pm
Posted on 2/28/21 at 7:49 pm to 3PieceSpicy
quote:
Best piece of advice is to not use Edward Jones.
DO NOT GO TO THESE THIEFS. This is best advice I seen lately. All investment companies are just leeches.
I would split into 6 different accounts, safe bond or money market account. Take 10% from each account into 500 index etf every qtr.
If market drops >25% move alot say 50% over into etf.
Bonds hedge against inflation while slowly exposure to current market bubble.
Posted on 2/28/21 at 8:00 pm to NAsh-vegas Tigah
Does he have any kind of retirement package at all??
Social security in ten years...
How does he want to live?
If I had 3M at 55 with no income I’d have to find a way to generate livable dividend payments.
He could easily buy rental properties with 1/4 to 1/3 of the 3M
He could buy VYM for the most stable of dividends. What about T for 7% annually? The stock is safe at $28.
Also, needs growth at 55...QQQ
Bond coupons generate passive money as well. Look into corporate and municipal bond ETFs.
Also, find a decent job while able? I understand that might be a tough transition going from employer to employee.
Social security in ten years...
How does he want to live?
If I had 3M at 55 with no income I’d have to find a way to generate livable dividend payments.
He could easily buy rental properties with 1/4 to 1/3 of the 3M
He could buy VYM for the most stable of dividends. What about T for 7% annually? The stock is safe at $28.
Also, needs growth at 55...QQQ
Bond coupons generate passive money as well. Look into corporate and municipal bond ETFs.
Also, find a decent job while able? I understand that might be a tough transition going from employer to employee.
This post was edited on 2/28/21 at 8:02 pm
Posted on 2/28/21 at 8:54 pm to NAsh-vegas Tigah
A solid $3mil investment into income producing real estate should yield 1%/month or $360,000/year pre tax. There’s 20 different ways to do this but a mix of commercial, residential, and daily/vacation rentals would do the trick.
If it were me-I’d take 1.5-2 and put into real estate. I’d put the rest into etfs and I’d get a job or start a new business as well. Just for a couple of years.
If it were me-I’d take 1.5-2 and put into real estate. I’d put the rest into etfs and I’d get a job or start a new business as well. Just for a couple of years.
Posted on 2/28/21 at 11:21 pm to Matt225
What vehicle would you use to invest? Fidelity or something similar??
What about tax exposure on buying and selling of stocks/etfs? I am learning myself...... hope to be where he is by time I am 55! lol
What about tax exposure on buying and selling of stocks/etfs? I am learning myself...... hope to be where he is by time I am 55! lol
Posted on 2/28/21 at 11:26 pm to NAsh-vegas Tigah
He needs to find CFP and seek professional advice. 3 MM will be fine if invested correctly but will evaporate quickly if not managed properly.
ETA
The advice given so far is terrible. Real estate, Exxon, etc is not a place for your main retirement funds. Seek professional advice.
ETA2
If he is absolutely turned off by their fees, he can probably access the professional services Vanguard offers. He will call them and they will assist on where to invest based on his goals.
LINK
ETA
The advice given so far is terrible. Real estate, Exxon, etc is not a place for your main retirement funds. Seek professional advice.
ETA2
If he is absolutely turned off by their fees, he can probably access the professional services Vanguard offers. He will call them and they will assist on where to invest based on his goals.
LINK
This post was edited on 2/28/21 at 11:45 pm
Posted on 3/1/21 at 12:51 am to NAsh-vegas Tigah
He needs a professional.
A fee only planner.
diversified funds for the equity portion might include;
500,000 in small cap fund, 500,000 in S&P 500 fund, and 250,000 in international stock fund.
A broad based real estate fund for another 250,000.
That is 1.5 million.
I would reinvest dividends and cap gains for these.
The remaining 1.5 million could be used for purchasing an annuity. These are expensive, but you said he is a novice investor. This would serve as a source of income to him.
This is sort of how I see it. Create a long term equity based portfolio with half and create a pension with the other.
A fee only planner.
diversified funds for the equity portion might include;
500,000 in small cap fund, 500,000 in S&P 500 fund, and 250,000 in international stock fund.
A broad based real estate fund for another 250,000.
That is 1.5 million.
I would reinvest dividends and cap gains for these.
The remaining 1.5 million could be used for purchasing an annuity. These are expensive, but you said he is a novice investor. This would serve as a source of income to him.
This is sort of how I see it. Create a long term equity based portfolio with half and create a pension with the other.
Posted on 3/1/21 at 12:31 pm to NAsh-vegas Tigah
He met with advisor.... they are thinking
50% in Blue Chip Dividend Paying Stocks & ETF's (Walmart, Exxon, Boeing, ETF's XLE, QQQ, S&P etc....) Buy and hold for the long term to minimize taxes.
30% in Bonds
10% in Gold/Real Estate/Crypto's
10% staying in cash to buy market dips as available.
He does not want to buy and manage real estate.
He plans to work in some capacity...... TBD.
In my opinion, I would reduce the % of stocks purchased now (based on current market values)..... hold more % in cash and buy dips. Something like 20% now. 40% hold to buy dips??? Advisor is warning of inflationary pressures and loss of purchasing power?
Thoughts?
Additional comment - fees at Edward Jones sounded stupid! Good advice from board on that one!
50% in Blue Chip Dividend Paying Stocks & ETF's (Walmart, Exxon, Boeing, ETF's XLE, QQQ, S&P etc....) Buy and hold for the long term to minimize taxes.
30% in Bonds
10% in Gold/Real Estate/Crypto's
10% staying in cash to buy market dips as available.
He does not want to buy and manage real estate.
He plans to work in some capacity...... TBD.
In my opinion, I would reduce the % of stocks purchased now (based on current market values)..... hold more % in cash and buy dips. Something like 20% now. 40% hold to buy dips??? Advisor is warning of inflationary pressures and loss of purchasing power?
Thoughts?
Additional comment - fees at Edward Jones sounded stupid! Good advice from board on that one!
This post was edited on 3/1/21 at 12:33 pm
Posted on 3/1/21 at 12:35 pm to GeneralLee
quote:
Best piece of advice is to not use Edward Jones.
Posted on 3/1/21 at 12:37 pm to bayoubengals88
quote:
If I had 3M at 55 with no income I’d have to find a way to generate livable dividend payments.
different strokes for different folks but i'm almost 55, there is no way i'd be able to spend 3MM dollars before i die
Posted on 3/1/21 at 12:39 pm to cgrand
cgrand..... I think the same thing! If I ever have that amount of money..... Would never work another day and never be concerned about money. Would put it in something very conservative even if it only got me 2-3%. Maybe that is why I don't have that kind of money.... lol
B-in-law is worried they will not be able to get the returns needed...... but they spend quite a bit more than we do..... trips, beach home, country club dues, cars etc..... He figures he needs to get a minimum of 5-7% avg annual return to be safe.
B-in-law is worried they will not be able to get the returns needed...... but they spend quite a bit more than we do..... trips, beach home, country club dues, cars etc..... He figures he needs to get a minimum of 5-7% avg annual return to be safe.
This post was edited on 3/1/21 at 12:43 pm
Posted on 3/1/21 at 1:34 pm to cgrand
(no message)
This post was edited on 7/25/22 at 4:25 pm
Posted on 3/1/21 at 2:17 pm to NAsh-vegas Tigah
recently retired and did this
long but sorta detailed..(59.5years old....no pension)
bucket one: immediate fixed income annuity that spins off income to pay basic needs....
buy a few but never invest more than 250k per contract to be insured by state.
bucket two: a bunch of investment grade coporate bonds...20k per bond and diverse...
also two bond index funds for diversity ( one corp ...one fed)
bucket three : one condo with a property manager...paid cash so income is steady
bucket four: a good mix of higher than average dividend ...but solid companies....like abbvie.verizon,exxon,shell,efc.coke....lots of others...this givrs you monthly checks and also hopefully stock goes up so have an inflation edge...( i loaded this bucket last march :)...)
the above money spins off decent dependable cash flow....
bucket five: cash...subsidize and live off cash until your able draw SS...lots of tax reasons and healthcare reasons for this...
bucket six : i have two mutual funds...sp index and international index....very very low cost and a large amount in these...average divenend is about 1.8 percent and the most i would draw from this bucket...i will count on the 1.8 percent income but not more...avg historical sp increase is 7.1 percent a year...i leave rest of growth of this bucket to help offset inflation...
bucket seven: need cash to play....wild card: just a few grand per item...find 3-5 wild cards....to invest in each year..you never know the next tesla...apple.... i bought stuff like c3ai abnb..spacs like acic..btwn ..... or just get a few ark funds
i use the 3.5 percent rule...i multiply my investment values times 3.5 percent...i take that number and add in my ss...this gives me a yearly income number....i havr enough cash in the bank to supply the yearly ss number until i start actually drawing ss...
i had a lot of professionals offer ideas but they wanted to much management feed fot such a conservative portfolio as i wanted...
i am NOT s professional investment person .......just a guy pushed into early retirement and scrambling...,...
long but sorta detailed..(59.5years old....no pension)
bucket one: immediate fixed income annuity that spins off income to pay basic needs....
buy a few but never invest more than 250k per contract to be insured by state.
bucket two: a bunch of investment grade coporate bonds...20k per bond and diverse...
also two bond index funds for diversity ( one corp ...one fed)
bucket three : one condo with a property manager...paid cash so income is steady
bucket four: a good mix of higher than average dividend ...but solid companies....like abbvie.verizon,exxon,shell,efc.coke....lots of others...this givrs you monthly checks and also hopefully stock goes up so have an inflation edge...( i loaded this bucket last march :)...)
the above money spins off decent dependable cash flow....
bucket five: cash...subsidize and live off cash until your able draw SS...lots of tax reasons and healthcare reasons for this...
bucket six : i have two mutual funds...sp index and international index....very very low cost and a large amount in these...average divenend is about 1.8 percent and the most i would draw from this bucket...i will count on the 1.8 percent income but not more...avg historical sp increase is 7.1 percent a year...i leave rest of growth of this bucket to help offset inflation...
bucket seven: need cash to play....wild card: just a few grand per item...find 3-5 wild cards....to invest in each year..you never know the next tesla...apple.... i bought stuff like c3ai abnb..spacs like acic..btwn ..... or just get a few ark funds
i use the 3.5 percent rule...i multiply my investment values times 3.5 percent...i take that number and add in my ss...this gives me a yearly income number....i havr enough cash in the bank to supply the yearly ss number until i start actually drawing ss...
i had a lot of professionals offer ideas but they wanted to much management feed fot such a conservative portfolio as i wanted...
i am NOT s professional investment person .......just a guy pushed into early retirement and scrambling...,...
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