Currently have $700,000 at 26 years old get $100,000 a year

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GrayS26
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Currently have $700,000 at 26 years old get $100,000 a year

Post by GrayS26 » Thu Mar 30, 2017 1:27 pm

Hello everyone! Great to be a boglehead member.

I'm 26 and have $700,000 liquid. My parents also give me $100,000 a year.

I only spend <3,500 a month for bills and entertainment and save the rest.

I'm currently in balanced funds bc 100% stock is quite scary for me. Is that ok?

I don't have a 9-5 job.

GrayS26
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Re: 3 fund portfolio vs. all-in-one fund

Post by GrayS26 » Thu Mar 30, 2017 3:03 pm

[Moved into here from: 3 fund portfolio vs. all-in-one fund --admin LadyGeek]

Can someone please give an example of a 1 fund portfolio vs a 3 fund portfolio?

Like if I wanted a 1 fund what could I buy or if I wanted a 3 fund which ones could I buy.

Thank you

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by LadyGeek » Thu Mar 30, 2017 3:56 pm

Welome! I moved your post into here so we can focus on your own situation. It would help quite a bit if you could take a stab and post your portfolio in this thread using the Asking Portfolio Questions format. The format will make you think about the "big picture" while giving us the information we need to point you in the right direction.

Here's a great place to start: Getting started

If you have any questions, ask them here.
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by BL » Thu Mar 30, 2017 4:49 pm

What balanced fund are you in? Giving more info would get you more reasoned suggestions and also help you look at your own financial life. Are you guaranteed this amount of money the rest of your life? Even with the best of intentions/plans, things can change. Are you working toward a career or do you have other life objectives?

Vanguard's Tax-managed Balanced Fund might be worth a look. It is about 50/50 stock/bond (muni). Buying the same mix separately or a 3-fund portfolio (using muni bonds) would get similar results.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by aristotelian » Thu Mar 30, 2017 5:04 pm

You are independently wealthy and fully provided for. If you have a low risk tolerance and no need to take the risk, it is perfectly fine to be conservative. Not only have you won the game, you have no need to play it.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by ray333 » Thu Mar 30, 2017 5:45 pm

you "get 100,000 a year" ... you're fine. Open an ally account and find a hobby.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by 3PKWzh9 » Thu Mar 30, 2017 5:56 pm

While I have no trust fund or family monetary support, I am just a few years older than you and, since your age, have owned businesses that provided me with the same thing: $100,000 - $250,000 of passive, automatic income into my account.

My advice to you would be to evaluate your talents and attempt to build a freelance or contracting type career in the field at which you have the most natural talent. Set goals high, and don't be satisfied with yourself until you achieve them.

Where do you live? What did your parents (or grandparents) do to build wealth? Did you go to good schools?

If you went to good schools, there is a good chance that you are going to feel poor compared to your working friends in just a few years.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by MotoTrojan » Thu Mar 30, 2017 7:51 pm

Nicely done. I'd use less bonds personally, unless you expect to live off this and don't expect income to continue.

GrayS26
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by GrayS26 » Thu Mar 30, 2017 9:58 pm

BL wrote:What balanced fund are you in? Giving more info would get you more reasoned suggestions and also help you look at your own financial life. Are you guaranteed this amount of money the rest of your life? Even with the best of intentions/plans, things can change. Are you working toward a career or do you have other life objectives?

Vanguard's Tax-managed Balanced Fund might be worth a look. It is about 50/50 stock/bond (muni). Buying the same mix separately or a 3-fund portfolio (using muni bonds) would get similar results.
It's a bit complicated. Sometimes I spend more per year but I always do save AT LEAST $40,000 a year.

Regarding investing I'm not really sure if what I'm doing is good or not but it's mostly in balanced funds with both stocks and bonds. I don't remember the names but maybe it's 60/40 if I recall correctly.

I also have a trust fund which I didn't mention bc it will come MANY years from now when I'm a lot older so I didn't see a point in mentioning it, but it's worth over $3,000,000 and gives set monthly payments.

I'm not working toward a career right now, but I do have a college degree. I'm just enjoying the things I enjoy doing, which isn't anything extravagant (Starbucks, browsing the web, making music playlists on YouTube, dating and trying to find a girlfriend, staying in shape, and so on)
Last edited by GrayS26 on Thu Mar 30, 2017 10:15 pm, edited 1 time in total.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by GrayS26 » Thu Mar 30, 2017 10:04 pm

I read the thread on "illusion of poverty" and "illusion of wealth" and I may have the "illusion of poverty"

I have this fear like what if the markets go down and stay down. I'm very afraid of the system no longer working for investors, not saying this would happen or anything but it's just a fear not based on any evidence or anything but it still worries me.

This is why I try to spend less but at the same time I try to enjoy.

GrayS26
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by GrayS26 » Thu Mar 30, 2017 10:21 pm

(Deleted post)

Thanks to everyone for your posts.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by bigred3 » Thu Mar 30, 2017 10:23 pm

I'm in a similar position as you, but a few years older. I would put 20%-50% in a SP500 index fund (or some amount you are comfortable with) and just let it ride. Wouldn't look at it/pay attention to the markets. Be careful so others don't know about your situation, especially potential girlfriends or girlfriends. I didn't tell my wife about my situation until after we got engaged. I had to ask if she had any idea and she basically said the only thing she found different was that I paid with cash a lot of the time and didn't seem to stress much about unanticipated expenses/things like that. Just put a comfortable amount away in the SP500, be affable and somewhat low-key, find a passion/purpose, and keep busy.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by stimulacra » Thu Mar 30, 2017 10:23 pm

GrayS26 wrote:I'm not working toward a career right now. I'm just enjoying the things I enjoy doing, which isn't anything extravagant (Starbucks, browsing the web, making music playlists on YouTube, dating and trying to find a girlfriend, staying in shape, and so on)
Financially it looks like you're set. I think almost any reasonable asset allocation would serve you well; the Buffet allocation (90% S&P 500/10% short duration bonds) could be on the aggressive end of the spectrum, Harry Browne's Permanent Portfolio (1/4 Stocks, 1/4 U.S Treasuries, 1/4 Cash, 1/4 Gold) could be the ultra-conservative side of things.

The only constructive criticism I can offer is finding something to be passionate about beyond what you're doing now. Something that gives purpose to your days. This might help with the dating arena as well, most women seem to enjoy a balanced mix of ambition along with leisure, regardless of how much you have in the bank.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by TSWNY » Thu Mar 30, 2017 11:35 pm

GrayS26 wrote:I read the thread on "illusion of poverty" and "illusion of wealth" and I may have the "illusion of poverty"

I have this fear like what if the markets go down and stay down. I'm very afraid of the system no longer working for investors, not saying this would happen or anything but it's just a fear not based on any evidence or anything but it still worries me.

This is why I try to spend less but at the same time I try to enjoy.

If I were you I would just go with a simple 60/40 fund and not look at it, you are basically getting paid to be a teenager.....set it and forget it. Why worry about a market down turn? Couldn't you just ask for more money?

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by itstoomuch » Thu Mar 30, 2017 11:36 pm

GrayS26 wrote: I'm not working toward a career right now, but I do have a college degree. I'm just enjoying the things I enjoy doing, which isn't anything extravagant (Starbucks, browsing the web, making music playlists on YouTube, dating and trying to find a girlfriend, staying in shape, and so on)
So, any luck in finding a girlfriend? :confused
Never mind the other stuff. :mrgreen: there isn't any magic or secrets or formuli in what you do with your wealth. But being successful in finding and holding a GF is :arrow: :?: :annoyed
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by PNW1 » Fri Mar 31, 2017 12:03 am

Chalk me up as another voice saying that "balanced fund" could mean many different things, and being more specific will elicit better advice. Reading through the wiki, as linked to, would be very sensible.

I debated writing the following, but feel that it's important. Please realize that you have been given an advantage that very few people receive. I'm not sure what I'd have done in your shoes; I have literally never considered it before because it is so far from the experience of anyone I've ever known. I respect the fact that you're interested in saving for the future, and that you're happy living on a fraction of your income. What I really feel you have been given, though, is the gift of freedom. I believe you'll find your life more fulfilling, if not more enjoyable moment-to-moment, if you find a cause or career that you value. Assuming that your future unearned income streams are guaranteed, you don't need to concern yourself with how much, if anything, you'll make while doing these things. You can choose to just take a summer off and travel because you feel like doing it. You'll never need to put up with a toxic work environment. But you can still choose to do something constructive with your time, and I both hope and believe that you'll feel better about yourself for having done so. I can guarantee that it will make you more respectable in the eyes of many of your fellow crewmates on this journey 'round the sun. I imagine that goes for the women who are quality girlfriend material, too. :)

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by fantasytensai » Fri Mar 31, 2017 9:27 am

PNW1 wrote:Chalk me up as another voice saying that "balanced fund" could mean many different things, and being more specific will elicit better advice. Reading through the wiki, as linked to, would be very sensible.

I debated writing the following, but feel that it's important. Please realize that you have been given an advantage that very few people receive. I'm not sure what I'd have done in your shoes; I have literally never considered it before because it is so far from the experience of anyone I've ever known. I respect the fact that you're interested in saving for the future, and that you're happy living on a fraction of your income. What I really feel you have been given, though, is the gift of freedom. I believe you'll find your life more fulfilling, if not more enjoyable moment-to-moment, if you find a cause or career that you value. Assuming that your future unearned income streams are guaranteed, you don't need to concern yourself with how much, if anything, you'll make while doing these things. You can choose to just take a summer off and travel because you feel like doing it. You'll never need to put up with a toxic work environment. But you can still choose to do something constructive with your time, and I both hope and believe that you'll feel better about yourself for having done so. I can guarantee that it will make you more respectable in the eyes of many of your fellow crewmates on this journey 'round the sun. I imagine that goes for the women who are quality girlfriend material, too. :)
Also to add to this, if there is anything I can see that would potentially lead your life astray, it would be a bad future spouse, so if you do want to marry one day, I would focus 80-90% of your energy on making sure that she is the one.

Otherwise, as long as you are conscious about your spending, there is really no way for you to ever need money. People that manage to blow wealthy parents' money usually tend to drive 5 ferraris while doing drugs and gambling. You are not like that so you should absolutely fine UNLESS you mess up at the wife part.

Travel the world (try backpacking, the real experience, not, you know, flying first class everywhere). See the world. No matter how rich or poor you are, an experience like that will be significant for your life.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by deltaneutral83 » Fri Mar 31, 2017 10:37 am

I'd have to know how guaranteed the $100k income is but the bulk of the nest egg for me if I were in this position would be in VTI. I guess it's hard for me to spend too much time thinking about it because of the trust that awaits in addition to the income. The most important things you have to worry about are not what's out of your control (stock/bond market volatility) but the things that are in your control: wife selection, monthly expenses, etc. In the mean time, find some ways to spend your time with philanthropic endeavors.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by mhalley » Fri Mar 31, 2017 11:25 am

I assume this is in a taxable account, so most would say that a balanced fund is not ideal as you give up the tax loss harvesting. In that case, the three fund portfolio is the way to go.
If the thought of having to rebalance is daunting, there are multiple balanced funds that would be reasonable. Since you are somewhat risk averse and don't have the willingness or need to take risk, a 60/40 fund is reasonable.
The vanguard lifestrategy moderate growth funds gives you the 60/40 split in a 4 fund portfolio.
https://personal.vanguard.com/us/funds/ ... =INT#tab=0

"The LifeStrategy Funds are a series of broadly diversified, low-cost funds with an all-index, fixed allocation approach that may provide a complete portfolio in a single fund. The four funds, each with a different allocation, target various risk-based objectives. The Moderate Growth Fund seeks to provide capital appreciation and a low to moderate level of current income. The fund holds 60% of its assets in stocks, a portion of which is allocated to international stocks, and 40% in bonds, a portion of which is allocated to international bonds. Investors with a long-term time horizon who can accept stock market volatility may wish to consider this fund."

Here is a wiki on the 3 fund portfolio.

https://www.bogleheads.org/wiki/Three-fund_portfolio

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by Leesbro63 » Fri Mar 31, 2017 11:30 am

GrayS26 wrote:I read the thread on "illusion of poverty" and "illusion of wealth" and I may have the "illusion of poverty"

I have this fear like what if the markets go down and stay down. I'm very afraid of the system no longer working for investors, not saying this would happen or anything but it's just a fear not based on any evidence or anything but it still worries me.

This is why I try to spend less but at the same time I try to enjoy.
I think I have this too. I'd LOVE to see that thread. I must have missed it. Can someone point me to it, please.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by gator1 » Fri Mar 31, 2017 11:31 am

A) Do not let any potential girlfriend know about your finances. (They may be able to easily figure it out if they are halfway intelligent w/ no money coming in but money going out)
B) Get a prenup.
C) If you get married and have kids make sure they are well taken care of if you pass.
D) No offense, but reading this all makes me know that if I'm passing down money to someone I am going to put in requirements they have to meet and most importantly they have to work at least 20 hours a week or do 20 hours a week of community service. I would personally not be okay with someone skating by on my money "just because". I would also get a lot more gratification from spending the money I earned, not spending the money I was handed. But, that's just me. At least from what you have described you are only spending portions of it, not all of it. I think you need to give some of it to an organization, and then volunteer at that organization. Preferably, something involving sick humans or animals.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by TigerNest » Fri Mar 31, 2017 11:40 am

Leesbro63 wrote:
GrayS26 wrote:I read the thread on "illusion of poverty" and "illusion of wealth" and I may have the "illusion of poverty"

I have this fear like what if the markets go down and stay down. I'm very afraid of the system no longer working for investors, not saying this would happen or anything but it's just a fear not based on any evidence or anything but it still worries me.

This is why I try to spend less but at the same time I try to enjoy.
I think I have this too. I'd LOVE to see that thread. I must have missed it. Can someone point me to it, please.
Here you go: viewtopic.php?t=214931

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by Abe » Fri Mar 31, 2017 11:42 am

GrayS26 wrote: I also have a trust fund which I didn't mention bc it will come MANY years from now when I'm a lot older so I didn't see a point in mentioning it, but it's worth over $3,000,000 and gives set monthly payments.
OP, does the $100k per year come from the trust fund or do you parents pay it separately?
Slow and steady wins the race.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by David Jay » Fri Mar 31, 2017 11:44 am

GrayS26 wrote:I have this fear like what if the markets go down and stay down. I'm very afraid of the system no longer working for investors, not saying this would happen or anything but it's just a fear not based on any evidence or anything but it still worries me.
Maybe this will help. There is nothing magic about markets if you ignore the short term variation. Here is my take on the S&P 500, but it applies to all stock markets (in aggregate):

When I hold the S&P 500, I own a piece of the companies that:

Produce the electricity to light my home (AEP, Alliant)
Produce the natural gas to heat my home (Apache, Anadarko)
Make or distribute the food and drink I consume (ADM, Brown-Forman)
Sell me a car and keep it running (AutoNation, Auto Zone)
Run hospitals and provide health insurance (Anthem, Aetna)
Create new drugs that extend and improve quality of life (Abbot, Bristol-Myers)
Run the banking system so my checks and ATM card function (Bank of America, Bank of New York)
Make my cool smartphone and the network that makes it work (Apple, ATT)
Make the components that go into all my electronic gadgets (Analog Devices, Broadcom)
Allow me to access virtually the sum knowledge of the planet (Alphabet)
Allows me buy almost everything (Amazon, Bed, Bath & Beyond, Best Buy)
Make and operate the airplanes I ride on to go see the grandkids (Boeing, American, Alaska)

And I only got through the company names that start with “A” and “B”. Short of global catastrophe (on the level of an extinction-level meteor strike), these great companies will continue to deliver these goods and services (and generate earnings for me, the owner).
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by CedarWaxWing » Fri Mar 31, 2017 11:53 am

PNW1 wrote:Chalk me up as another voice saying that "balanced fund" could mean many different things, and being more specific will elicit better advice. Reading through the wiki, as linked to, would be very sensible.

I debated writing the following, but feel that it's important. Please realize that you have been given an advantage that very few people receive. I'm not sure what I'd have done in your shoes; I have literally never considered it before because it is so far from the experience of anyone I've ever known. I respect the fact that you're interested in saving for the future, and that you're happy living on a fraction of your income. What I really feel you have been given, though, is the gift of freedom. I believe you'll find your life more fulfilling, if not more enjoyable moment-to-moment, if you find a cause or career that you value. Assuming that your future unearned income streams are guaranteed, you don't need to concern yourself with how much, if anything, you'll make while doing these things. You can choose to just take a summer off and travel because you feel like doing it. You'll never need to put up with a toxic work environment. But you can still choose to do something constructive with your time, and I both hope and believe that you'll feel better about yourself for having done so. I can guarantee that it will make you more respectable in the eyes of many of your fellow crewmates on this journey 'round the sun. I imagine that goes for the women who are quality girlfriend material, too. :)
+1000.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by knpstr » Fri Mar 31, 2017 12:00 pm

That is okay.

:beer
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius

GMT-8
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by GMT-8 » Fri Mar 31, 2017 1:10 pm

I didn't know we had to qualify to be a Boglehead! Although I don't have the OP's financial resources, I just wandered in and never left.

Perhaps he is just investigating and could be gaining a great deal from this conversation - such as the "don't let future girlfriends know your situation".

I experienced it in reverse - my wife-to-be had a bank account, no debt and a rich daddy when I met her ... but by the time we got married her account was empty. Now 45 years later, her dad is still living (thankfully) although his accounts are almost empty. But none of us have debt and we have more than enough, thanks to compound interest and low fees and staying the course -- we did it the the Boglehead way.

GMT-8

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by ether161 » Fri Mar 31, 2017 1:30 pm

One thing I noticed is that you fear for the future of investing as a whole.

No one knows what the future will hold. Most nations that exist today never existed 80 years ago. Think about it! (USA, Switzerland, UK are the only original countries that survived WWII and Cold War intact)

Wars have destroyed millions of lives, corruption governments have come and gone, and currencies have collapsed destroying most financial wealth with it just in two generations.

However, the US is one of the oldest continuous governments in the world, our currency is the most popular, and we continue to grow and innovate. If I were you, I would buy a nice, well built home and know that no matter what happens to the market at least you have your castle. Know that if your investments in a simple American equity and bond fund implode, so will the fortunes and retirements of millions of your fellow citizens.

You're a free man. No master to serve and self sufficient. The only threats to your well being are medical catastrophes and financial fraudsters.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by Morik » Fri Mar 31, 2017 1:30 pm

Haven't read through the whole thread, but a few pieces of advice:
1) Give a lot of thought to your goals--what do you want to do in life? Do any of your goals require more money than you have access to now/will have access to in the future if you don't make any changes?
If your goals are all doable within your current financial situation, then focus on saving what you don't need. I'd lean towards a relatively conservative asset allocation, such as one of the Vanguard life strategy funds (conservative growth or moderate growth). You could also make your own 3-fund with whatever ratio you want.
This way if you later change your mind about goals, or if something crazy happens/whatever, you will have a big financial cushion to fall back on.

If you won't have enough to accomplish your goals, consider how you will bridge that gap. Could you save aggressively now and invest it for long-term growth and plan to do your more expensive goals in a few decades?


2) When searching out a life partner/girlfriend/whatever, I'd suggest keeping your level of wealth concealed. Find someone who definitely likes you for you, not someone who is willing to tolerate living with you because it brings them financial stability.

AllenSmith
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by AllenSmith » Fri Mar 31, 2017 1:42 pm

sounds like its time to learn golf

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by Grt2bOutdoors » Fri Mar 31, 2017 2:18 pm

itstoomuch wrote:
GrayS26 wrote: I'm not working toward a career right now, but I do have a college degree. I'm just enjoying the things I enjoy doing, which isn't anything extravagant (Starbucks, browsing the web, making music playlists on YouTube, dating and trying to find a girlfriend, staying in shape, and so on)
So, any luck in finding a girlfriend? :confused
Never mind the other stuff. :mrgreen: there isn't any magic or secrets or formuli in what you do with your wealth. But being successful in finding and holding a GF is :arrow: :?: :annoyed
Here's a suggestion - you'll likely find someone but when they ask what you do - what are you going to say? Starbucks, browsing the web, making music playlists on YouTube, staying in shape, etc? Sounds a little creepy and I can see it raising flags unless you are making music playlists so you can DJ as a business. Find something productive to do, even if it is volunteering at a social organization, etc.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Longtermgrowth
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by Longtermgrowth » Fri Mar 31, 2017 3:42 pm

I would rather have stocks and bonds split in taxable. If not in a high enough tax bracket for municipal bonds to make sense (isn't it a 28% or higher tax bracket that muni bonds are usually recommended?), maybe a higher percentage of treasuries (especially if in a state that has income taxes, since my understanding is that treasury interest is state tax exempt) would be preferable?

GrayS26
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by GrayS26 » Fri Mar 31, 2017 5:52 pm

All of your posts have been very helpful. Thank you all so much.

I went to a party school for college. It's considered one of the biggest party schools in the country. My friends and the girls I date are all college students - my entire social life is in college. They understand me and my lifestyle well bc they are all "rich kids." Growing up I went to a good school, and many of the people my age went on to get advanced degrees and great careers, but I don't care to keep up with them. I am who I am and that's all I'm trying to be.

No, dating college girls, or rather TRYING to date college girls isn't easy. It's the biggest headache, but I love it. It's never ending drama, but it's fun. Do they know my situation? Well yeah. But I'm not worried about it. When the time comes for marriage, I'll think about prenups etc then. They come from the nicest neighborhoods in town, and it's nice dating (OR AT LEAST TRYING TO) someone from a similar background. There's a lot of mutual understanding and similarities I appreciate.

Sometimes I do spend more than I mentioned. My fear is that I anticipate having to spend more. I think I may have to bump up my expenses to a point where I'll save around 40K a year. Or worse case maybe even a little less. I'm also ALMOST 27 so that's 1 year older.

I don't have a 9-5 but I do have a hobby and purpose. Yes, on the daily all I do is get Starbucks, YouTube, browse web, Xbox, exercise etc but my social life and the endless drama takes up a lot of energy and time. If MTV wanted to do a reality TV show on us I think people may watch! (I'm kidding, but it really does take up time and energy).

Maybe I'm not the most ambitious person out there like some of the people my age that I knew, but like I said I am who I am. I am trying my best to be responsible. Yes I like to party, but I see nothing wrong with that. It's pretty harmless. It's not like it costs much either. The maximum it costs is like if I go on a date I might end up spending 400-500 bc we get champagne, etc. My bills are cheap overall. College life isn't expensive if you don't have to pay tuition (I already graduated).

I joined here bc I'm always open to learning. There's many things I don't know or understand but I do the best I can. I like listening to others and learning and I'm truly appreciative of everyone's thoughts and feedback. I feel like trying to learn as much as I can about my situation is important for me. Why do I worry about things? Bc I don't want to be a screw up in life. I just want to have fun but be responsible too.

Oh and regarding golf, I'm more of a night owl :)


EDIT: One more thing I should address, I don't own property. My lifestyle as described above is better suited for renting a 1BR condo, which is all I need.
Last edited by GrayS26 on Fri Mar 31, 2017 6:31 pm, edited 4 times in total.

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jharkin
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by jharkin » Fri Mar 31, 2017 6:02 pm

stimulacra wrote: The only constructive criticism I can offer is finding something to be passionate about beyond what you're doing now. Something that gives purpose to your days. This might help with the dating arena as well, most women seem to enjoy a balanced mix of ambition along with leisure, regardless of how much you have in the bank.
+1. You are already financially set for life. I think your biggest challenge is that someday you may get bored with life/not feel fulfilled. Think about what you want to do with your time for the next 60-80 years. Might want to find a cause to get involved in. etc... You wont believe us now (I wouldn't have when I was 20 either) but eventually you will get tired of partying and yearn for other fulfillment in life. Everyone does.

This will also increase your appeal to the fairer sex and help weed out the ones who are only interested in your trust fund. :)

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by BogleBoogie » Fri Mar 31, 2017 6:20 pm

triceratop wrote:
Levett wrote:"To whom much is given, much will be required."

PNW1 is exactly right: you need to find a worthy cause to which you can contribute your time and wealth. God knows there's real need and hardship out there in the larger world.

I am frankly curious about what you see in your present lifestyle that would identify you as a "Boglehead."

Everything you have appears to have been given to you.

Lev
The part where only 42% of net income is spent, and the remaining is saved. Why does it matter where the money comes from when evaluating proper financial decisions?
+1 I don't know how many people who would be so responsible as you (saving 42% of net income) when given 100k/yr. You are living well below your means when this scenario seems like it could lead to quite the opposite. Nice job in that regard!

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by stoptothink » Fri Mar 31, 2017 6:26 pm

GrayS26 wrote:All of your posts have been very helpful. Thank you all so much.

I went to a party school for college. It's considered one of the biggest party schools in the country. My friends and the girls I date are all college students - my entire social life is in college. They understand me and my lifestyle well bc they are all "rich kids." Growing up I went to a good school, and many of the people my age went on to get advanced degrees and great careers, but I don't care to keep up with them. I am who I am and that's all I'm trying to be.

No, dating college girls, or rather TRYING to date college girls isn't easy. It's the biggest headache, but I love it. It's never ending drama, but it's fun. Do they know my situation? Well yeah. But I'm not worried about it. When the time comes for marriage, I'll think about prenups etc then. They come from the nicest neighborhoods in town, and it's nice dating (OR AT LEAST TRYING TO) someone from a similar background. There's a lot of mutual understanding and similarities I appreciate.

Sometimes I do spend more than I mentioned. My fear is that I anticipate having to spend more. I think I may have to bump up my expenses to a point where I'll save around 40K a year. Or worse case maybe even a little less. I'm also ALMOST 27 so that's 1 year older.

I don't have a 9-5 but I do have a hobby and purpose. Yes, on the daily all I do is get Starbucks, YouTube, browse web, Xbox, exercise etc but my social life and the endless drama takes up a lot of energy and time. If MTV wanted to do a reality TV show on us I think people may watch! (I'm kidding, but it really does take up time and energy).

Maybe I'm not the most ambitious person out there like some of the people my age that I knew, but like I said I am who I am. I am trying my best to be responsible. Yes I like to party, but I see nothing wrong with that. It's pretty harmless. It's not like it costs much either. The maximum it costs is like if I go on a date I might end up spending 400-500 bc we get champagne, etc. My bills are cheap overall. College life isn't expensive if you don't have to pay tuition (I already graduated).

I joined here bc I'm always open to learning. There's many things I don't know or understand but I do the best I can. I like listening to others and learning and I'm truly appreciative of everyone's thoughts and feedback. I feel like trying to learn as much as I can about my situation is important for me. Why do I worry about things? Bc I don't want to be a screw up in life. I just want to have fun but be responsible too.

Oh and regarding golf, I'm more of a night owl :)
:shock: At least you are honest. I'll give you that.

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Shackleton
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by Shackleton » Fri Mar 31, 2017 7:15 pm

You do realize that at some point an older guy hanging around college students all the time becomes pathetic? And you are rapidly approaching that point. What do you see for your future?
“Superhuman effort isn't worth a damn unless it achieves results.” ~Ernest Shackleton

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by gator1 » Fri Mar 31, 2017 7:46 pm

Shackleton wrote:You do realize that at some point an older guy hanging around college students all the time becomes pathetic? And you are rapidly approaching that point. What do you see for your future?
I was thinking the same thing. An Essentially 27 year old is talking about "college life". It's approaching time to exit that lifestyle, Van Wilder. When one of my good buddies was 18(and I was 18) he lived in a dorm and I'd go visit. There was a 26 year old living in the dorm next door. And I always thought how old he was and looked. He, unlike the OP, kept to himself and the "college lifestyle" was to get an education, not to bro-out.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by LadyGeek » Fri Mar 31, 2017 8:21 pm

GrayS26 wrote:It's a bit complicated. Sometimes I spend more per year but I always do save AT LEAST $40,000 a year.

Regarding investing I'm not really sure if what I'm doing is good or not but it's mostly in balanced funds with both stocks and bonds. I don't remember the names but maybe it's 60/40 if I recall correctly.

I also have a trust fund which I didn't mention bc it will come MANY years from now when I'm a lot older so I didn't see a point in mentioning it, but it's worth over $3,000,000 and gives set monthly payments.
Could you take a stab at doing some research and post the fund names and related information in this thread using the Asking Portfolio Questions format?

A trust is a legal document that can be changed. What will you do if that trust doesn't happen? You need to get your current investments lined up to cover that situation. Posting in our recommended format will get you started on the right foot.

If you have any questions, ask them here.
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by randomizer » Fri Mar 31, 2017 8:43 pm

Although it's not an index fund (which is what most people go for around here) I think there's a strong argument to be made for someone in your position (young, solid income stream, low expenses) to invest big in pork bellies, specifically futures, hedging the currency risk with some emerging markets and maybe reaching for a bit of extra risk-adjusted return with a better Sharpe ratio by adding in some gold and an annuity.
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by TreeBeard » Fri Mar 31, 2017 8:59 pm

All of the helpful, open-minded responses are why I love this forum. But, I fear OP may be trolling. Happy Friday all in either case!

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TinkerPDX
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by TinkerPDX » Fri Mar 31, 2017 10:06 pm

You are set.

Focus on what you can do to help those who are less lucky.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by TropikThunder » Fri Mar 31, 2017 10:14 pm

Shackleton wrote:You do realize that at some point an older guy hanging around college students all the time becomes pathetic? And you are rapidly approaching that point. What do you see for your future?
Wooderson: That's what I love about these [college] girls, man. I get older, they stay the same age.
http://www.imdb.com/title/tt0106677/quotes

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by TropikThunder » Fri Mar 31, 2017 10:17 pm

GrayS26 wrote: ...many of the people my age went on to get advanced degrees and great careers, but I don't care to keep up with them. I am who I am and that's all I'm trying to be.
That's all you're trying to be because that's all you need to be. In my opinion, every time you post to clarify something, you make your self sound worse (which I originally thought would be hard to do). Best argument I've seen recently for bringing back high estate taxes.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by johnra » Fri Mar 31, 2017 10:23 pm

I agree that your search for meaning is most important priority, but nothing wrong with having your fun and experiment until you figure this out. I doubt many of us who are over the age of 26 had this figured out by age 26. I was in my late 40's when I was really able to see clearly and commit. So good luck with this.

But to address your more mundane question of asset allocation, I do NOT recommend a balanced fund because it is all merged. You are better off allocating to two or maybe three funds in an allocation you are comfortable with (say, 45% stock index,15% international index, and 40% total bond (or intermediate bond) index. You don't really need to fuss with rebalancing except every few years. But this way you are protected for when you want or need the money, you can choose where to withdraw from.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by chicagoan23 » Sat Apr 01, 2017 4:29 am

I'm surprised that everyone assumes $100k per year is more than enough long-term. If the OP ever marries and has kids, that is enough to support a middle class lifestyle. He would still have to buy a house, etc. which could wipe out his non-trust fund nest egg.

$3.7 million is not $50 million, especially if one is accustomed to a "party" lifestyle. A 3% withdrawal rate on that is $111k per year, with no Social Security or pension coming, and it has to last 70 years.

OP is doing a nice job saving some of the parental support, but future life changes may drastically increase his annual spend. I wouldn't focus on philanthropy just yet, unless there is an unlimited amount of mid-eight figure family money waiting for him beyond what he has now.

Keep saving, invest those savings prudently, and think about ways to earn some income doing things that you enjoy. Oh, and keep chasing the 21 year olds.....

Billionaire
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by Billionaire » Sat Apr 01, 2017 4:54 am

I think this was an early April Fools joke. I don't doubt people like this exist, but you'd think they have resources that have helped other family members accumulate such wealth before resorting to on-line financial help.

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corn18
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by corn18 » Sat Apr 01, 2017 5:58 am

I've always felt that everyone is not a product of their environment but, rather, a product of their expectations. OP, take your good fortune and make the world a better place. Please.

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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by TSWNY » Sat Apr 01, 2017 10:23 am

chicagoan23 wrote:I'm surprised that everyone assumes $100k per year is more than enough long-term. If the OP ever marries and has kids, that is enough to support a middle class lifestyle. He would still have to buy a house, etc. which could wipe out his non-trust fund nest egg.

$3.7 million is not $50 million, especially if one is accustomed to a "party" lifestyle. A 3% withdrawal rate on that is $111k per year, with no Social Security or pension coming, and it has to last 70 years.

OP is doing a nice job saving some of the parental support, but future life changes may drastically increase his annual spend. I wouldn't focus on philanthropy just yet, unless there is an unlimited amount of mid-eight figure family money waiting for him beyond what he has now.

Keep saving, invest those savings prudently, and think about ways to earn some income doing things that you enjoy. Oh, and keep chasing the 21 year olds.....

I'm assuming the solution to that problem would just be to run right to the "Bank of Daddy".

bigred3
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Re: Currently have $700,000 at 26 years old get $100,000 a year

Post by bigred3 » Sat Apr 01, 2017 10:51 am

I'm assuming the school is Arizona State and if I was 26 with 4 times the budget of a normal college student I might not want to leave either. All kidding aside (assuming you don't have any real substance abuse problems/gambling) you will get tired of it eventually and figure things out. I have friends that didn't start their careers until their 30's and are doing fine. None are on the fast track to the C-Suite, but doing well earning a living like everyone else. Just take care of your body/health and watch out for the girls! ha

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