Agressive Investing of $6mm?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
MrHappy
Posts: 1
Joined: Thu Nov 21, 2019 9:05 am

Agressive Investing of $6mm?

Post by MrHappy »

Hello,

I am a 48 year old follower of this wonderful forum. After years of paying high AUM fees over at MSSB, my wife and I would like to move our assets over to Vanguard. We currently have $5.9mm in our retirement accounts and contribute about $200k yearly (profit sharing, SEP IRA (max matching) and cash balance with zero personal or business debt. I own a business that pays my wife and I about $1.3mm/year (combined) and we plan on working for another 15-20 years as we are fortunate enough to enjoy a light schedule of 25-30 hours a week. Yes, it is a "lifestyle business".

My question is, what is the best set up for max potential returns at Vanguard? We have no aversion to risk and if the portfolio loses 30-50% some years (or longer), so be it. Our business is strong enough to support us and we do enjoy working at growing it.

Thanks to all.

David
Jack FFR1846
Posts: 13253
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Agressive Investing of $6mm?

Post by Jack FFR1846 »

Dump the whole thing in VTI.
Bogle: Smart Beta is stupid
livesoft
Posts: 75121
Joined: Thu Mar 01, 2007 8:00 pm

Re: Agressive Investing of $6mm?

Post by livesoft »

OK, max potential returns, before or after taxes?

Max potential returns also means Max potential losses, but you knew that already, right?
Wiki This signature message sponsored by sscritic: Learn to fish.
retiringwhen
Posts: 2048
Joined: Sat Jul 08, 2017 10:09 am
Location: New Jersey, USA

Re: Agressive Investing of $6mm?

Post by retiringwhen »

look at vineviz's 5-fund portfolio: VTI, VWO, VIOV, VSS and BLV.

viewtopic.php?t=286862#p4668661

You can go all in on long-term bonds and mix us/ex-us to you hearts content. It is high risk / high reward with arguably a better than average risk-adjusted return if you believe in the diversification models used to allocate to those funds.

If you truly don't have downside risk aversion, this can be dialed up to a pretty high level of risk/reward (buying heavily into emerging markets, Int'; Small Cap, and US Small Cap Value with a heavy dose of negative correlation in long-term Treasuries)
sambb
Posts: 2973
Joined: Sun Mar 10, 2013 3:31 pm

Re: Agressive Investing of $6mm?

Post by sambb »

all in lifestrategy MODERATE growth. Thats it. Enjoy life. one fund,
User avatar
Brianmcg321
Posts: 1295
Joined: Mon Jul 15, 2019 8:23 am

Re: Agressive Investing of $6mm?

Post by Brianmcg321 »

100% in VTSAX.
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
123
Posts: 6929
Joined: Fri Oct 12, 2012 3:55 pm

Re: Agressive Investing of $6mm?

Post by 123 »

Brianmcg321 wrote: Thu Nov 21, 2019 11:17 am 100% in VTSAX.
+1 VTSAX/VTI keep it simple. With a portfolio of that size and ongoing contributions you can ride out any variations. Maybe keep $1M in bonds or CDs to avoid tax consequences if you want to raise cash for some purchase. Congratulations, you're doing well.

I would avoid various financial planner schemes like annuities, life insurance, limited partnerships etc. Devote your efforts to the continued success of your business and avoid investment distractions.
The closest helping hand is at the end of your own arm.
User avatar
David Jay
Posts: 10130
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Agressive Investing of $6mm?

Post by David Jay »

123 wrote: Thu Nov 21, 2019 12:02 pm +1 VTSAX/VTI keep it simple. With a portfolio of that size and ongoing contributions you can ride out any variations. Maybe keep $1M in bonds or CDs to avoid tax consequences if you want to raise cash for some purchase.
I agree with this idea with the slight modification of using a tax-free municipal bond fund in your tax bracket.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
apex84
Posts: 178
Joined: Sun Mar 11, 2007 12:51 am
Location: Chicago

Re: Agressive Investing of $6mm?

Post by apex84 »

I would choose an asset allocation with at least some allocation to US stocks, foreign stocks, and bonds. One way to do this is a pair of total market index funds for the equities and a municipal bond fund (intermediate term).
User avatar
Watty
Posts: 21789
Joined: Wed Oct 10, 2007 3:55 pm

Re: Agressive Investing of $6mm?

Post by Watty »

MrHappy wrote: Thu Nov 21, 2019 9:25 am We currently have $5.9mm in our retirement accounts and contribute about $200k yearly (profit sharing, SEP IRA (max matching) and cash balance with zero personal or business debt. I own a business that pays my wife and I about $1.3mm/year
It would be good to put a rough value on your business and also count that in your stock asset allocation.

If you value it at $10 million dollars(a made up number) then your total portfolio would be worth around $16 million dollars. Conventional wisdom is to never go below 20% in bonds so with a $16 million dollar portfolio I would suggest that you keep $3.2 million dollars in bonds especially since you have that much in your retirement accounts where taxes are not a problem.

One thing to consider when deciding how much risk to take is that you should have a need to take additional risk. I don't see that you have any need to try to take additional risk. A reasonable case can be made that once you have "won the game" that you should be less aggressive, not more aggressive.

It is a bit trite but there is an old saying, "Bulls make money, bears make money, pigs get slaughtered". Be cautious about being greedy.

One other thing to consider is that you likely do not have a lot of international exposure in that $16 million unless your business has a lot of international exposure. Somewhere in your plans it would be good to have a reasonable amount of international exposure. I have mixed feelings about it but the Vanguard target date fund I own has a significant asset allocation in an International Bond fund so that would be one option to consider.
kcxie
Posts: 65
Joined: Thu Dec 18, 2008 10:24 pm

Re: Agressive Investing of $6mm?

Post by kcxie »

Just put the 50% in stock and a 50% in bonds Then. forget about it. You do not need to take too much risk.
ohai
Posts: 1327
Joined: Wed Dec 27, 2017 2:10 pm

Re: Agressive Investing of $6mm?

Post by ohai »

"Max potential returns" to Vanguard means overweight emerging markets, high yield, small caps, and the rest to various large cap. Of course, if you decide to leave mutual funds for brokerage, there will be even more creative ways to take more risk.
User avatar
Gamma Ray
Posts: 487
Joined: Sun Feb 01, 2015 8:16 pm
Location: Bouncing between FL and NYC

Re: Agressive Investing of $6mm?

Post by Gamma Ray »

I have another question, At $6M, what kind of returns would one expect using fixed income funds if you don't want to risk 100% of your savings.
dbr
Posts: 34823
Joined: Sun Mar 04, 2007 9:50 am

Re: Agressive Investing of $6mm?

Post by dbr »

ohai wrote: Thu Nov 21, 2019 2:21 pm "Max potential returns" to Vanguard means overweight emerging markets, high yield, small caps, and the rest to various large cap. Of course, if you decide to leave mutual funds for brokerage, there will be even more creative ways to take more risk.
Correct. The problem here is what does one mean by max potential returns? One could even suggest searching the list of public corporations for the one stock that is going to explode to a thousandfold its current value or opening a margin account and shorting the devil out of something one is sure is going to crash.

Probably within the intended context the answer is 100% total stock market either US or US+World.
Thesaints
Posts: 3503
Joined: Tue Jun 20, 2017 12:25 am

Re: Agressive Investing of $6mm?

Post by Thesaints »

At 5M+ you get personalized advice from Vanguard. Talk to their experts and tell them you want to maximize after-tax gains.
They will ask you to define a target (using numbers, not poetry) and to help you they will present different target scenarios, with their associated risk.

Eventually, you will get to something like "My target is to have X millions in Y years time. Possible outcomes of this strategy span between Z and W millions (95% confidence), with a final amount between X±∆ millions having a 50% chance. Maximum drawdown will be ≤D millions (again 95% confidence)".
Last edited by Thesaints on Thu Nov 21, 2019 5:18 pm, edited 1 time in total.
Dottie57
Posts: 9715
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Agressive Investing of $6mm?

Post by Dottie57 »

sambb wrote: Thu Nov 21, 2019 11:06 am all in lifestrategy MODERATE growth. Thats it. Enjoy life. one fund,
This.
hillman
Posts: 189
Joined: Thu Jun 07, 2012 2:08 pm

Re: Agressive Investing of $6mm?

Post by hillman »

Brianmcg321 wrote: Thu Nov 21, 2019 11:17 am 100% in VTSAX.
You are so, so, so wrong. VITSX

:D :sharebeer
OldBallCoach
Posts: 442
Joined: Mon Dec 10, 2018 5:22 pm

Re: Agressive Investing of $6mm?

Post by OldBallCoach »

Two things...talk with your CPA and get the best plan in place for taxes and then maybe dump it into 70/30?
KyleAAA
Posts: 8756
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Agressive Investing of $6mm?

Post by KyleAAA »

50% IJS
40% ISCF
10% DGS
User avatar
Watty
Posts: 21789
Joined: Wed Oct 10, 2007 3:55 pm

Re: Agressive Investing of $6mm?

Post by Watty »

Gamma Ray wrote: Thu Nov 21, 2019 2:58 pm I have another question, At $6M, what kind of returns would one expect using fixed income funds if you don't want to risk 100% of your savings.
Here is Vanguard website that list the historical returns for different asset allocations.

https://personal.vanguard.com/us/insigh ... ns?lang=en
WhiteMaxima
Posts: 2282
Joined: Thu May 19, 2016 5:04 pm

Re: Agressive Investing of $6mm?

Post by WhiteMaxima »

20 shares of BRKA.
User avatar
1789
Posts: 1910
Joined: Fri Aug 16, 2019 3:31 pm

Re: Agressive Investing of $6mm?

Post by 1789 »

If you are confident that things will be OK when fund drops 50% then you can do 100% VTSAX. But i am not sure how can you be so sure of that?
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)
dbr
Posts: 34823
Joined: Sun Mar 04, 2007 9:50 am

Re: Agressive Investing of $6mm?

Post by dbr »

1789 wrote: Thu Nov 21, 2019 6:12 pm If you are confident that things will be OK when fund drops 50% then you can do 100% VTSAX. But i am not sure how can you be so sure of that?
Yes, it might be good to look at a Monte Carlo simulation of VTSMX in Portfolio Visualizer and adjust the percentile intervals to see the things that have only 1% or 2% of happening: https://www.portfoliovisualizer.com/mon ... sisResults The 1% percentile has a max drawdown of 74% and a there is a 5% chance of a 64% drawdown. However after 20 years even the 1% line shows no loss of money.

I guess the answer VTSMX seems obvious so there would need to be more information to say something else like small cap value and emerging markets, or BRK-A or AAPL or similar stock, for that matter.
lazyday
Posts: 3799
Joined: Wed Mar 14, 2007 10:27 pm

Re: Agressive Investing of $6mm?

Post by lazyday »

If you spend less than $125,000 per year, then you might put it all into the Vanguard Total World Stock fund. It could lose more than 50% though.

If you spend more, then it might make sense to have some in bonds or CDs. For example, 50/50 Vanguard Short Term Treasury and Vanguard Inflation Protected Securities. I can’t say what the split should be between stocks and bonds.
Thesaints
Posts: 3503
Joined: Tue Jun 20, 2017 12:25 am

Re: Agressive Investing of $6mm?

Post by Thesaints »

6M are not the standard retiree stash. There are tax subtleties that become important and one can afford much higher risk (if desired), compared to the typical retail investor.

It will cost some to get a little more sophisticated than a random BH thread and it will probably pay off.
HomeStretch
Posts: 5737
Joined: Thu Dec 27, 2018 3:06 pm

Re: Agressive Investing of $6mm?

Post by HomeStretch »

Good investing advice above.

Consider obtaining estate planning advice if you haven’t already. With your business value, savings rate and portfolio, you and spouse are likely to exceed the federal estate tax exemption when it reverts on January 1, 2026.
bayview
Posts: 2321
Joined: Thu Aug 02, 2012 7:05 pm
Location: WNC

Re: Agressive Investing of $6mm?

Post by bayview »

KyleAAA wrote: Thu Nov 21, 2019 5:30 pm 50% IJS
40% ISCF
10% DGS
For those of us who don't memorize ticker abbreviations:

IJS iShares small cap value
ISCF iShares multifactor international small cap
DGS WisdomTree small cap emerging markets

Why do posters continue to use ticker symbols only, despite urgings to amplify them? Without knowing what they are, your posts are just noise.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri
nix4me
Posts: 887
Joined: Sat Oct 13, 2018 9:32 am

Re: Agressive Investing of $6mm?

Post by nix4me »

100% VTI is what i would do.
User avatar
Brianmcg321
Posts: 1295
Joined: Mon Jul 15, 2019 8:23 am

Re: Agressive Investing of $6mm?

Post by Brianmcg321 »

hillman wrote: Thu Nov 21, 2019 5:05 pm
Brianmcg321 wrote: Thu Nov 21, 2019 11:17 am 100% in VTSAX.
You are so, so, so wrong. VITSX

:D :sharebeer

Image
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
pkcrafter
Posts: 14659
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: Agressive Investing of $6mm?

Post by pkcrafter »

My question is, what is the best set up for max potential returns at Vanguard? We have no aversion to risk and if the portfolio loses 30-50% some years (or longer), so be it.
OK, as long as you would feel the same with a loss of 80-90%.


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
nix4me
Posts: 887
Joined: Sat Oct 13, 2018 9:32 am

Re: Agressive Investing of $6mm?

Post by nix4me »

pkcrafter wrote: Thu Nov 21, 2019 8:19 pm
My question is, what is the best set up for max potential returns at Vanguard? We have no aversion to risk and if the portfolio loses 30-50% some years (or longer), so be it.
OK, as long as you would feel the same with a loss of 80-90%.


Paul
The market has never lost 80-90% - stop the fear mongering.
KyleAAA
Posts: 8756
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Agressive Investing of $6mm?

Post by KyleAAA »

bayview wrote: Thu Nov 21, 2019 7:30 pm
KyleAAA wrote: Thu Nov 21, 2019 5:30 pm 50% IJS
40% ISCF
10% DGS
For those of us who don't memorize ticker abbreviations:

IJS iShares small cap value
ISCF iShares multifactor international small cap
DGS WisdomTree small cap emerging markets

Why do posters continue to use ticker symbols only, despite urgings to amplify them? Without knowing what they are, your posts are just noise.
OP will look them up if interested. It is unnecessary for the rest of the forum to understand so it does not matter if most people don't have them memorized.
lostdog
Posts: 3761
Joined: Thu Feb 04, 2016 2:15 pm

Re: Agressive Investing of $6mm?

Post by lostdog »

100% VTWAX/VT-Total World

100% in VTSAX/VTI is not diversified enough. U.S. Only
Last edited by lostdog on Fri Nov 22, 2019 8:18 am, edited 1 time in total.
retiringwhen
Posts: 2048
Joined: Sat Jul 08, 2017 10:09 am
Location: New Jersey, USA

Re: Agressive Investing of $6mm?

Post by retiringwhen »

nix4me wrote: Thu Nov 21, 2019 8:46 pm The market has never lost 80-90% - stop the fear mongering.
The stock market lost 89% (as measured by the DJIA) of its value between OCT-1929 and OCT-1932.
kerplunk
Posts: 809
Joined: Sun Apr 17, 2011 9:58 pm

Re: Agressive Investing of $6mm?

Post by kerplunk »

If you ever figure out how to get “max possible returns,” please let us know.

I suggest the following:

48% total us stock market
12% total international stock market
40% total US bond market

Rebalance once a year.
msk
Posts: 1470
Joined: Mon Aug 15, 2016 10:40 am

Re: Agressive Investing of $6mm?

Post by msk »

1. US only: 100% VTI
2. Entire world: 100% VT
Choice is as per personal perception as to what the next several decades hold. I follow 2. with an 8-figure account. My "business" back-up to ride out market collapses is a COLA pension, enough for all our needs. Keep it simple and beat the pros
hillman
Posts: 189
Joined: Thu Jun 07, 2012 2:08 pm

Re: Agressive Investing of $6mm?

Post by hillman »

Brianmcg321 wrote: Thu Nov 21, 2019 8:07 pm
hillman wrote: Thu Nov 21, 2019 5:05 pm
Brianmcg321 wrote: Thu Nov 21, 2019 11:17 am 100% in VTSAX.
You are so, so, so wrong. VITSX

:D :sharebeer

Image
Hey, moneybags, $600 is $600. /s

I had not realized the difference between admiral and institutional was only .01%. And excellent meme usage.

Hope you have a good weekend.
lazyday
Posts: 3799
Joined: Wed Mar 14, 2007 10:27 pm

Re: Agressive Investing of $6mm?

Post by lazyday »

retiringwhen wrote: Thu Nov 21, 2019 9:26 pm
nix4me wrote: Thu Nov 21, 2019 8:46 pm The market has never lost 80-90% - stop the fear mongering.
The stock market lost 89% (as measured by the DJIA) of its value between OCT-1929 and OCT-1932.
To be fair (no meme, sorry) the max drop of ~89% was in nominal terms. As I recall, in real terms max drawdown was about 80%.

Even if the max was only 79%: just because something hasn’t happened before doesn’t mean it won’t happen. Other countries have suffered much worse declines than 80% real, no reason it can’t happen here.

The obvious answer is to diversify. My guess is that if the US market falls 90% real, you might still care about the value of your equity holdings, but if Total World Stock falls by 90% real, then most likely you'll only care about the armageddon around you.
lazyday
Posts: 3799
Joined: Wed Mar 14, 2007 10:27 pm

Re: Agressive Investing of $6mm?

Post by lazyday »

msk wrote: Fri Nov 22, 2019 1:45 am 1. US only: 100% VTI
2. Entire world: 100% VT
Choice is as per personal perception as to what the next several decades hold. I follow 2
1. Amazon only: 100% AMZN
2. A broad index fund

Also personal perception of what the next decades hold.

Choice 1 takes on unneeded concentration risk.

If someone chooses for themselves 100% Amazon, or much less dangerously, 100% US, that's fine. But some in this thread are suggesting 100% US to someone else.

(glad you chose 2)
retiringwhen
Posts: 2048
Joined: Sat Jul 08, 2017 10:09 am
Location: New Jersey, USA

Re: Agressive Investing of $6mm?

Post by retiringwhen »

lazyday wrote: Fri Nov 22, 2019 8:59 am
retiringwhen wrote: Thu Nov 21, 2019 9:26 pm
nix4me wrote: Thu Nov 21, 2019 8:46 pm The market has never lost 80-90% - stop the fear mongering.
The stock market lost 89% (as measured by the DJIA) of its value between OCT-1929 and OCT-1932.
To be fair (no meme, sorry) the max drop of ~89% was in nominal terms. As I recall, in real terms max drawdown was about 80%.

Even if the max was only 79%: just because something hasn’t happened before doesn’t mean it won’t happen. Other countries have suffered much worse declines than 80% real, no reason it can’t happen here.

The obvious answer is to diversify. My guess is that if the US market falls 90% real, you might still care about the value of your equity holdings, but if Total World Stock falls by 90% real, then most likely you'll only care about the armageddon around you.
Just 10+ years ago, Americans were looking at a 63% Real drop in the S&P500 between 2000 and early 2009. Those kinds of losses are not hypothetical and not even far back in history. Most people on this site have vivid, real memories and experiences.

See my little chart for evidence. Of course, just like the the Great Depression, the patient investor who held on or bought while there was "blood in the streets" was greatly rewarded. If the OP really does not have a risk aversion (or need to sell in a down market), then all in on the stock market is the best answer.

Bulls and Bears since 1929
dbr
Posts: 34823
Joined: Sun Mar 04, 2007 9:50 am

Re: Agressive Investing of $6mm?

Post by dbr »

lazyday wrote: Fri Nov 22, 2019 9:08 am

If someone chooses for themselves 100% Amazon, or much less dangerously, 100% US, that's fine. But some in this thread are suggesting 100% US to someone else.
The OP is asking for suggestions and is getting them. The OP is asking for a simple answer to a question that has nuances. What else are we supposed to say? I guess one answer is that there is no best, just choices each of which has its own possible consequences. Some posters are saying some things about what the consequences might be. It takes a lot of writing and a lot of discussion to work through all of that. A possibility is to just suggest go to the Wiki "Getting Started" and spend some time reading, a lot of time. Would it be a put-down to say that?
lazyday
Posts: 3799
Joined: Wed Mar 14, 2007 10:27 pm

Re: Agressive Investing of $6mm?

Post by lazyday »

dbr wrote: Fri Nov 22, 2019 9:28 amThe OP is asking for suggestions and is getting them. The OP is asking for a simple answer to a question that has nuances. What else are we supposed to say? I guess one answer is that there is no best, just choices each of which has its own possible consequences. Some posters are saying some things about what the consequences might be. It takes a lot of writing and a lot of discussion to work through all of that. A possibility is to just suggest go to the Wiki "Getting Started" and spend some time reading, a lot of time. Would it be a put-down to say that?
I agree with you, I just think that too many people are giving bad advice.

Saying to a stranger “Just put 100% into Amazon” is clearly terrible advice.

Saying to a stranger “Just put 100% in US index” is clearly bad advice. *

I don’t think we should say “Both flat earthers and globe earthers are entitled to their opinion” and I don’t think it’s a matter of opinion here either.

Sorry if I’m turning another thread into a fight on US only vs not only US.

(*) Unless you know something special about them, such as their feelings on patriotism.
lazyday
Posts: 3799
Joined: Wed Mar 14, 2007 10:27 pm

Re: Agressive Investing of $6mm?

Post by lazyday »

retiringwhen wrote: Fri Nov 22, 2019 9:12 amThose kinds of losses are not hypothetical and not even far back in history.
Agreed. 50% max drawdown is really not the worst that's likely to happen over time.
See my little chart for evidence.
I like that you go to the day or intraday, instead of just the month. Not including dividends makes it hard for me to interpret though.
retiringwhen
Posts: 2048
Joined: Sat Jul 08, 2017 10:09 am
Location: New Jersey, USA

Re: Agressive Investing of $6mm?

Post by retiringwhen »

lazyday wrote: Fri Nov 22, 2019 10:46 am I like that you go to the day or intraday, instead of just the month. Not including dividends makes it hard for me to interpret though.
As my notes at the bottom imply, I created the chart to attempt to feel the immediate pain, not total returns. nspirius posted a good total returns chart in another thread recently. It does tell a very different tale, maybe I'll add another page after getting to the bottom of that data.
Last edited by retiringwhen on Fri Nov 22, 2019 12:20 pm, edited 1 time in total.
aristotelian
Posts: 8923
Joined: Wed Jan 11, 2017 8:05 pm

Re: Agressive Investing of $6mm?

Post by aristotelian »

VT/VTWAX
illumination
Posts: 1238
Joined: Tue Apr 02, 2019 6:13 pm

Re: Agressive Investing of $6mm?

Post by illumination »

There's two camps, "stop playing when you've won the game" and "aggressively invest when you've won the game because you can afford to" I am in the latter camp, you just need to be prepared for bear markets and how to react.

I just don't see the purpose of signing up for dead money over long time periods when so much is still coming in the door. I would definitely be 90% plus invested in equities a retirement account that probably wasn't going to tapped into for 20+ years. Just the dividends from something like VTI are slightly more than a 10 year Treasury right now. And I think the ownership of equities makes even more sense in taxable because of all the sheltering benefits when you are at that tax bracket.
User avatar
TomatoTomahto
Posts: 11879
Joined: Mon Apr 11, 2011 1:48 pm

Re: Agressive Investing of $6mm?

Post by TomatoTomahto »

illumination wrote: Fri Nov 22, 2019 12:07 pm There's two camps, "stop playing when you've won the game" and "aggressively invest when you've won the game because you can afford to" I am in the latter camp, you just need to be prepared for bear markets and how to react.
And then there’s a third camp when they’ve won the game: we put roughly $3M in fixed income (tax deferred) and invest every other nickel in broad based equity funds. $3M should cover even a nasty stuff hitting the fan (we are both 60+), the rest can grow untrammeled.
I get the FI part but not the RE part of FIRE.
User avatar
goodenyou
Posts: 2601
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: Agressive Investing of $6mm?

Post by goodenyou »

TomatoTomahto wrote: Fri Nov 22, 2019 12:43 pm
illumination wrote: Fri Nov 22, 2019 12:07 pm There's two camps, "stop playing when you've won the game" and "aggressively invest when you've won the game because you can afford to" I am in the latter camp, you just need to be prepared for bear markets and how to react.
And then there’s a third camp when they’ve won the game: we put roughly $3M in fixed income (tax deferred) and invest every other nickel in broad based equity funds. $3M should cover even a nasty stuff hitting the fan (we are both 60+), the rest can grow untrammeled.
I would categorize that as winning the game with $3M and "aggressively investing when you've won the game because you can afford to" with the rest of the portfolio. LMP is a common strategy. I can see a difference, as the oft quoted Oracle has recommended, by putting 90% in an index fund when you have won by a lot. If you have a few billion, and you live off a .0005% SWR (exaggeration emphasized), you can be aggressive with the entire portfolio. How much you "win" by does matter.
"Ignorance more frequently begets confidence than does knowledge" | “Do you know how to make a rain dance work? Dance until it rains”
Vanguard Fan 1367
Posts: 1954
Joined: Wed Feb 08, 2017 3:09 pm

Re: Agressive Investing of $6mm?

Post by Vanguard Fan 1367 »

I like the advice to not go any higher than 70 % stocks. I like working towards VTI 70% and some sort of bond fund or funds for the other 30%. I have some capital gains issues as I work towards changing my stock funds to VTI or the Vanguard total stock market mutual fund.

I am less aggressive and have a 60/40 asset allocation.

Bogle's little book of Common Sense Investing helped me a lot.
Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it."
Post Reply