How to invest 600k?

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miamivice
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Joined: Tue Jun 11, 2013 11:46 am

How to invest 600k?

Post by miamivice »

I have 600k that I currently have invested in the stock market. It's a mixture of large cap, mid cap, and small cap index funds. No international. It's done well for me - about 10% per year ROI for the last 10 years, which I am happy with.

My choices are I can leave it there or I can find an alternate investment. Alternate investment ideas include;

a) buying a house and renting it out (housing is generally strong in my area)
b) buying a small business and
c) buying a portion of a medium size business and being a silent parnter
d) others?

I do know that I am very busy and do not want to buy a job.

Thoughts?
mamster
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Joined: Tue Jan 11, 2011 1:05 pm

Re: How to invest 600k?

Post by mamster »

It sounds like you're having a case of "I have to DO SOMETHING" syndrome. Investments are supposed to be boring.
miamivice wrote: Thu Nov 17, 2022 12:27 pm I do know that I am very busy and do not want to buy a job.
This is the answer right here, right?
Topic Author
miamivice
Posts: 2725
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Re: How to invest 600k?

Post by miamivice »

mamster wrote: Thu Nov 17, 2022 12:30 pm It sounds like you're having a case of "I have to DO SOMETHING" syndrome. Investments are supposed to be boring.
miamivice wrote: Thu Nov 17, 2022 12:27 pm I do know that I am very busy and do not want to buy a job.
This is the answer right here, right?
It's really hard to get less work that owning index funds.
the_wiki
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Re: How to invest 600k?

Post by the_wiki »

miamivice wrote: Thu Nov 17, 2022 12:27 pm I have 600k that I currently have invested in the stock market. It's a mixture of large cap, mid cap, and small cap index funds. No international. It's done well for me - about 10% per year ROI for the last 10 years, which I am happy with.

My choices are I can leave it there or I can find an alternate investment. Alternate investment ideas include;

a) buying a house and renting it out (housing is generally strong in my area)
b) buying a small business and
c) buying a portion of a medium size business and being a silent parnter
d) others?

I do know that I am very busy and do not want to buy a job.

Thoughts?
So you do not want to buy a job, and then you list 3 jobs? :confused
homebuyer6426
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Re: How to invest 600k?

Post by homebuyer6426 »

Since you said you are time-poor, you could:

Use some of the 600k on things that give you more time in your life. Examples would be lawn and gardening services, home cleaning services, online grocery shopping, tax services, or hire out those things which you would normally DIY. I'd focus on the best time/money ratio items first.

If you don't want to do that, it's going to be difficult to beat stock market returns without putting in a lot of elbow grease.
wetgear
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Re: How to invest 600k?

Post by wetgear »

miamivice wrote: Thu Nov 17, 2022 12:27 pm I have 600k that I currently have invested in the stock market. It's a mixture of large cap, mid cap, and small cap index funds. No international. It's done well for me - about 10% per year ROI for the last 10 years, which I am happy with.

My choices are I can leave it there or I can find an alternate investment. Alternate investment ideas include;

a) buying a house and renting it out (housing is generally strong in my area)
b) buying a small business and
c) buying a portion of a medium size business and being a silent parnter
d) others?

I do know that I am very busy and do not want to buy a job.

Thoughts?
D) Invest it in the AA outlined in your IPS.
CoAndy
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Re: How to invest 600k?

Post by CoAndy »

Personally, I would leave as is.
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arcticpineapplecorp.
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Re: How to invest 600k?

Post by arcticpineapplecorp. »

miamivice wrote: Thu Nov 17, 2022 12:27 pm I have 600k that I currently have invested in the stock market. It's a mixture of large cap, mid cap, and small cap index funds. No international. It's done well for me - about 10% per year ROI for the last 10 years, which I am happy with.

My choices are I can leave it there or I can find an alternate investment. Alternate investment ideas include;

a) buying a house and renting it out (housing is generally strong in my area)
b) buying a small business and
c) buying a portion of a medium size business and being a silent parnter
d) others?

I do know that I am very busy and do not want to buy a job.

Thoughts?
why the need to make a change RIGHT NOW?

Did you plan on reassessing after 10 years of investing in "a mixture of large cap, mid cap, and small cap index funds" and now it's that time for reassessment?

Do you not believe you'll get similar returns going forward with your current investments and are looking for similar/better returns from alternative investments?

It doesn't sound like you have a need for these monies since you're willing to tie them up in alternative investments. But it's assumed you will need/want the funds at some point in the future. It's hard to advise you what to do with the money if we don't know when you plan to use this money and/or what its purpose is.

So, first what is the time frame for which you plan to use this money?

And what are you attempting to do with this money? I.E. if it was a lump sum investment 10 years ago of $232,000 originally and now it's worth $600,000 what amount are you looking for it to grow to before you plan on drawing from it? $800k? $1 mil? $1.5 mil? what?

in case you're wondering how I came up with it being $232,000 10 years ago I ran a future value calculation of 10% CAGR over 10 years (your numbers) on a lump sum 10 years ago of $232,000 like this:

=FV(.10, 10, 0, -232000)

and came up with $601,748.

If you were adding money over those 10 years periodically, you might not have earned 10% (we don't know unless we know more about what was invested when).

After you determine when you'll need the money (and what for) you can then determine your need, ability and willingness to take risk. That will help you determine your asset allocation. For instance, while you were 100% in stocks over the past 10 years you might not be over the next 10 years if you don't have the need, ability or willingness to take similar risk. Read more here:

How much risk do you need to take: https://www.cbsnews.com/news/asset-allo ... -you-need/
How much risk do you have the ability to take: https://www.cbsnews.com/news/asset-allo ... -you-take/
How much risk do you have the willingness to take: https://www.cbsnews.com/news/asset-allo ... tolerance/
How to deal with conflicts between the need, ability and willingness to take risk: https://www.cbsnews.com/news/asset-allo ... ing-goals/

please don't bother with any of the alternative investments you mention. Just determine your asset allocation if a change is needed between the next 10 years and the last.

does that help?
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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Harry Livermore
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Re: How to invest 600k?

Post by Harry Livermore »

I would do nothing different.
"a" and "b" on your list are both buying a job (as you put it)
"c" strikes me as having a much greater chance of making your money evaporate than a carefully curated portfolio of funds, such as you already seem to own...
Cheers
bloom2708
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Re: How to invest 600k?

Post by bloom2708 »

Don't just do something. Stand there. Quietly.
Jack FFR1846
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Re: How to invest 600k?

Post by Jack FFR1846 »

miamivice wrote: Thu Nov 17, 2022 12:27 pm I have 600k that I currently have invested in the stock market. It's a mixture of large cap, mid cap, and small cap index funds. No international. It's done well for me - about 10% per year ROI for the last 10 years, which I am happy with.

My choices are I can leave it there or I can find an alternate investment. Alternate investment ideas include;

a) buying a house and renting it out (housing is generally strong in my area)
You said: I do know that I am very busy and do not want to buy a job. So X this out.

b) buying a small business and
You said: I do know that I am very busy and do not want to buy a job. So X this out.

c) buying a portion of a medium size business and being a silent partner
Like what? Anything with potential will have a sizeable risk and the possibility that you're going to have to hire an attorney to get any of your money back.
d) others?

I do know that I am very busy and do not want to buy a job.

Thoughts?
If you want to MAKE more money, then leave the investments as they are and get an extra job. "Alternative investments" often mean "lose your money". If there was an easy, passive way to make more than market returns, it would be something everyone does and would be in the Bogleheads Wiki. There isn't. If you want to make more, you need to put in more work.
Bogle: Smart Beta is stupid
maj
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Re: How to invest 600k?

Post by maj »

I must have missed something.
How old are you?
Are you healthy?
Are these investments in a tax-deferred account? Or Taxable?

If you are middle-aged or in poor health, or both, and fearful of losing a lot in a bear market but still want to have equity investments, put the $600,000 in the Balanced Index Fund, 60% total USA stock market, 40% total USA bond market.

Your alternatives imply more risk than you currently bear, or demand time you don't readily have.

peace
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retiredjg
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Re: How to invest 600k?

Post by retiredjg »

miamivice wrote: Thu Nov 17, 2022 12:27 pm I do know that I am very busy and do not want to buy a job.
Ok. If that's the case, why do all the alternatives look like work?

There does not appear to be any reason to do something different from what you are currently doing. Is there some compelling reason to change that you didn't mention?
Bud
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Re: How to invest 600k?

Post by Bud »

miamivice wrote: Thu Nov 17, 2022 12:27 pm I have 600k that I currently have invested in the stock market. It's a mixture of large cap, mid cap, and small cap index funds. No international. It's done well for me - about 10% per year ROI for the last 10 years, which I am happy with.

My choices are I can leave it there or I can find an alternate investment. Alternate investment ideas include;

a) buying a house and renting it out (housing is generally strong in my area)
b) buying a small business and
c) buying a portion of a medium size business and being a silent parnter
d) others?

I do know that I am very busy and do not want to buy a job.

Thoughts?
These questions are worth asking if you have specific purchases in mind. If you ask a hypothetical, general question, well, the answers don't mean much of anything. Context is very important.

All the best.
wetgear
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Re: How to invest 600k?

Post by wetgear »

miamivice wrote: Thu Nov 17, 2022 12:27 pm I have 600k that I currently have invested in the stock market. It's a mixture of large cap, mid cap, and small cap index funds. No international. It's done well for me - about 10% per year ROI for the last 10 years, which I am happy with.

My choices are I can leave it there or I can find an alternate investment. Alternate investment ideas include;

a) buying a house and renting it out (housing is generally strong in my area)
b) buying a small business and
c) buying a portion of a medium size business and being a silent parnter
d) others?

I do know that I am very busy and do not want to buy a job.

Thoughts?
More information needed. viewtopic.php?t=6212
newyorker
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Re: How to invest 600k?

Post by newyorker »

Leave it as it is
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ruralavalon
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Re: How to invest 600k?

Post by ruralavalon »

miamivice wrote: Thu Nov 17, 2022 12:27 pm I have 600k that I currently have invested in the stock market. It's a mixture of large cap, mid cap, and small cap index funds. No international. It's done well for me - about 10% per year ROI for the last 10 years, which I am happy with.

My choices are I can leave it there or I can find an alternate investment. Alternate investment ideas include;

a) buying a house and renting it out (housing is generally strong in my area)
b) buying a small business and
c) buying a portion of a medium size business and being a silent parnter
d) others?

I do know that I am very busy and do not want to buy a job.

Thoughts?
I suggest staying with your stock index funds.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Mullins
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Re: How to invest 600k?

Post by Mullins »

Most people, when they talk about going into business for themselves, are doing just that: buying themselves a job, not a business.

People also dream about winning millions in the lottery. And what do many say they'd like to do should they win? They want to open a business. In other words, they wish to take their million dollars, risk it, and work very hard. They have a fantasy that owning a business is a cushy rich people thing. It's funny because usually people go into business to make the million dollars so they can stop working very hard, not the other way around.

A business owner wants a partner when they need something the partner has. A skill set, connections, certain work they'll do, there's something they bring to the table that enhances the business... for a silent partner, the business owner only wants money. I understand that a real estate investment company, for example, might seek silent partners investing in it so that they can acquire/maintain properties, but other than that type of situation, the question as I see it becomes why would a business owner who has a profitable business with years of profits yet ahead wish to give away any portion of it and not seek to borrow funds?
"The Quality of the Answer Depends on the Quality of Your Question."
Outer Marker
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Re: How to invest 600k?

Post by Outer Marker »

Harry Livermore wrote: Thu Nov 17, 2022 3:00 pm I would do nothing different.
"a" and "b" on your list are both buying a job (as you put it)
"c" strikes me as having a much greater chance of making your money evaporate than a carefully curated portfolio of funds, such as you already seem to own...
+1. Consider also that: "Data from the BLS shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more." https://www.investopedia.com/financial- ... 0or%20more.

Many rentals fail to break even, much less turn a profit. Real estate prices are high, as are interest rates, so this is not very attractive.

I would suggest you read the "Four pillars of investing" by Dr. Bernstein. Stocks have far outperformed other assest classes looking back over centuries of investing data.
hudson
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Re: How to invest 600k?

Post by hudson »

miamivice wrote: Thu Nov 17, 2022 12:27 pm I have 600k that I currently have invested in the stock market. It's a mixture of large cap, mid cap, and small cap index funds. No international. It's done well for me - about 10% per year ROI for the last 10 years, which I am happy with.

My choices are I can leave it there or I can find an alternate investment. Alternate investment ideas include;

a) buying a house and renting it out (housing is generally strong in my area)
b) buying a small business and
c) buying a portion of a medium size business and being a silent parnter
d) others?

I do know that I am very busy and do not want to buy a job.

Thoughts?
Your index funds have rock bottom expense ratios (ER)?
VTI's ER is .03% or .0003. (VTI = Vanguard total stock)
Real estate, small business, and silent partner type investments would give me heart burn. Those are great investments if they are a match for you and you know what you are doing.
Last edited by hudson on Wed Nov 23, 2022 7:21 am, edited 1 time in total.
Carol88888
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Re: How to invest 600k?

Post by Carol88888 »

bloom2708 wrote: Thu Nov 17, 2022 3:15 pm Don't just do something. Stand there. Quietly.
+1 Every time I start to think about changing my portfolio I realize that there is very good chance I will be making a good portfolio a little - or a lot - worse.

I suggest the OP look back at recent and past decisions and see how they fared.
junior
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Re: How to invest 600k?

Post by junior »

If you want to get rich, and quick, you'll have to find some other investment than the stock market. This works out for some people, and others go broke.
newyorker
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Re: How to invest 600k?

Post by newyorker »

I have some dry powder, actually holding onto it til next year.
jjj_22
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Re: How to invest 600k?

Post by jjj_22 »

You have money invested in index funds that you don’t want to invest in some other way.

Ok.

What’s the question here?
hiduplex
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Re: How to invest 600k?

Post by hiduplex »

Yeah I don't think I would start a business unless it's a low cost. solopreneur business so you wouldn't have to tie up more than 10k into the business but then that's going to be a fairly busy job.

Do you own a house at all? If not, what worked for me and what I would recommend is owner-occupying a rental duplex live in one unit rent the other one out then that way you could build up equity and get tax breaks and do all that and you could pay down a good chunk of it up front. Then just let the rent work for you and keep your cost of living low.

Otherwise I would just kind of leave it how it is.
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