$10 MM Net worth..need advise on growing to $20 MM

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PN5048PC
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$10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM primarily in real estate (home, rentals et al). No debt. Live modestly. Current living expenses taken care of fully by job salary until such time SS kicks in to fully replace it. Willing to tolerate only a "moderate" or "moderately aggressive" portfolio allocation (ie some combination of stocks, bonds, cash). Not seeking questionable, novel or risky investments/methods. Thanks so much in advance in anticipation of your replies/advise.
Last edited by PN5048PC on Wed Feb 05, 2025 5:00 pm, edited 3 times in total.
idc
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by idc »

Google says 3.6% needed to double an investment in 20 years.
https://www.google.com/search?q=growth+ ... n+20+years

However, that won't account for inflation, and you haven't specified if the 20M is today's money or future money.

If I were you, I would put the 7MM in an SP500 ETF with dividends re-invested automatically. You might want to watch for the taxes generated by the dividends, but that would be a good problem to have. Given the current expected reversal to the mean of 5% for stocks, after inflation, your investment will grow easily past $20M in inflated dollars in 25 years without you doing anything.
dbr
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by dbr »

PN5048PC wrote: Sat Feb 01, 2025 1:45 pm Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. Current living expenses taken care of fully by job salary until such time SS kicks in. Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods. Thanks so much in advance in anticipation of your replies/advise.
Without more quantification I am not sure around 3% real is to be expected from moderate to mild risk investing.

But more than that investing is subject to such great uncertainty of outcome that you can't even make a reasonable statement except in statistical terms. An illustration inputing $10MM to results as observed in history and for a 20 year time frame can be seen here with a 50/50 portfolio, no spending, 20 years, and inflation corrected (you have to set the parameters) and the 25th percentile result is growth to around $17MM and the 75th percentile to $29MM. The dispersion in results measures the risk and the median at $22M the expectation. https://engaging-data.com/visualizing-4-rule/ Of course whether stock and bond results starting from 1871 to starting in 2003 for 20 years is representative of starting in 2025 is additional uncertainty.
nyclon
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by nyclon »

PN5048PC wrote: Sat Feb 01, 2025 1:45 pm Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. Current living expenses taken care of fully by job salary until such time SS kicks in. Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods. Thanks so much in advance in anticipation of your replies/advise.
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WeakOldGuy
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by WeakOldGuy »

Assuming you want $20M in real dollars (inflation adjust so the equivalent of $20M in today's dollars) you would need to get about 3.5% ROR in addition to whatever inflation is going to be. If you assume an average inflation of 3% (just a wild inaccurate guess) then you would need a nominal return of 7.5%.

A low-moderate risk portfolio is typically viewed as around 60/40, 60% stocks, 40% bonds. In the past, a 60/40 portfolio would get you to your goal in most 20 year periods, but not all. I have no confidence that the future returns will be as good as they have been in the past. Rather than 3.5% inflation adjusted real returns, I'm only expecting a 2.5% real return over the next 20 years. But then I'm a pessimist.
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WolfgangPauli
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by WolfgangPauli »

PN5048PC wrote: Sat Feb 01, 2025 1:45 pm Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. Current living expenses taken care of fully by job salary until such time SS kicks in. Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods. Thanks so much in advance in anticipation of your replies/advise.
At $10mm, you can afford $120 per year.. Sign up for Boldin Planner and do what if scenarios. A lot of detail provided and will give you probabilities .. .probabilities are the only answers that can be given as nothing is certain. Here are a few questions though:

1. How much, if any, of the $3MM in real estate is your primary home. Yes, that is part of your net worth but not investable.
2. Have you "marked up" your real estate to what people consider the value today? If so, I would not do that. Values will come down and bounce around. To be safe I keep my real estate at "book value".
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Wwwdotcom
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by Wwwdotcom »

I think you'd maximize your chances by downsizing from a $3M house to a $0.5M house. That would probably lower your property taxes and give you an additional 2.5M to invest. Your investment portfolio would now be 9.5M instead of 7M. I still don't think its rational to think/assume you are going to get there without a lucrative job. Overall, I think this is silly. Someone wanting to cut their living expenses and work more years in a high stress or risky job just to give their children $20M instead of $15M...
Itzapi
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by Itzapi »

A steady approach could be focusing on a diversified portfolio with a mix of index funds, bonds, and real estate. Since you prefer mild risk, slow and steady growth through long-term investments makes sense. You might also look into tax-efficient strategies, like maximizing retirement accounts and trusts for your heirs.
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White Coat Investor
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by White Coat Investor »

PN5048PC wrote: Sat Feb 01, 2025 1:45 pm Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. Current living expenses taken care of fully by job salary until such time SS kicks in. Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods. Thanks so much in advance in anticipation of your replies/advise.
Real estate isn't a fixed asset.

And growing $10 million to $20 million in 20-25 years is child's play. You only need a return of 2.81%

=RATE(25,0,-10000000,20000000) = 2.81%.

You could do that with cash and maybe even whole life insurance. You could buy a single 25 year treasury bond. No stocks or real estate or anything else needed.

Is that really your only goal, to double your money in nominal terms within 25 years? Maybe aim a little higher?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
smitcat
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by smitcat »

WeakOldGuy wrote: Sat Feb 01, 2025 3:28 pm Assuming you want $20M in real dollars (inflation adjust so the equivalent of $20M in today's dollars) you would need to get about 3.5% ROR in addition to whatever inflation is going to be. If you assume an average inflation of 3% (just a wild inaccurate guess) then you would need a nominal return of 7.5%.

A low-moderate risk portfolio is typically viewed as around 60/40, 60% stocks, 40% bonds. In the past, a 60/40 portfolio would get you to your goal in most 20 year periods, but not all. I have no confidence that the future returns will be as good as they have been in the past. Rather than 3.5% inflation adjusted real returns, I'm only expecting a 2.5% real return over the next 20 years. But then I'm a pessimist.
The historical returns of a 60/40 portfolio was 8.6% and the inflation rate for that same time period was 3%.
So the net historical return after inflation has been 5.6%, much larger than 3.5%.
https://investor.vanguard.com/investor- ... allocation
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by Rajsx »

Make it easy on yourself, consider yourself lucky & fortunate, look up VBIAX & do not look back, go enjoy yourself

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Call_Me_Op
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by Call_Me_Op »

White Coat Investor wrote: Sat Feb 01, 2025 3:59 pm
PN5048PC wrote: Sat Feb 01, 2025 1:45 pm Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. Current living expenses taken care of fully by job salary until such time SS kicks in. Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods. Thanks so much in advance in anticipation of your replies/advise.
Real estate isn't a fixed asset.

And growing $10 million to $20 million in 20-25 years is child's play. You only need a return of 2.81%

=RATE(25,0,-10000000,20000000) = 2.81%.

You could do that with cash and maybe even whole life insurance. You could buy a single 25 year treasury bond. No stocks or real estate or anything else needed.

Is that really your only goal, to double your money in nominal terms within 25 years? Maybe aim a little higher?
He wants to grow $10 million in today's dollars to $20 million in today's dollars. To me, this means he wants to double his money in real terms, not nominal.
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Circle the Wagons
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by Circle the Wagons »

PN5048PC wrote: Sat Feb 01, 2025 1:45 pm Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. Current living expenses taken care of fully by job salary until such time SS kicks in. Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods. Thanks so much in advance in anticipation of your replies/advise.
Assume $3M in real estate treads water in real terms. $7M needs to grow to $17M. Put the $7M in VT or equivalent funds for growth at maximum diversification benefit / smoothing. Walk away.

Expected return of 5% real is reasonable at current valuations, if globally diversified. CAGR = 3.55%, SD = 17%. You'll hit the goal in 25-26 years if we get these assumptions, or more, or less.
Last edited by Circle the Wagons on Sat Feb 01, 2025 5:48 pm, edited 1 time in total.
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White Coat Investor
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by White Coat Investor »

Call_Me_Op wrote: Sat Feb 01, 2025 5:35 pm He wants to grow $10 million in today's dollars to $20 million in today's dollars. To me, this means he wants to double his money in real terms, not nominal.
He'll need a little more risk then. But can still be pretty conservative. At 7%, money doubles every decade and he has 2 1/2 of them. So he needs 2.81% real. 20-30 year treasuries are currently yielding almost 5%, or about 2% real and 30 year TIPS are 2.48% right now, almost what he needs. Long term I'd expect 5%-7% real out of stocks. So a 20/80 portfolio would probably do it. As investment goals go, this one is child's play. In fact, he may very well hit this goal in just 10 years if he continues to invest aggressively.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
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PN5048PC
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

idc wrote: Sat Feb 01, 2025 3:04 pm Google says 3.6% needed to double an investment in 20 years.
https://www.google.com/search?q=growth+ ... n+20+years

However, that won't account for inflation, and you haven't specified if the 20M is today's money or future money.

If I were you, I would put the 7MM in an SP500 ETF with dividends re-invested automatically. You might want to watch for the taxes generated by the dividends, but that would be a good problem to have. Given the current expected reversal to the mean of 5% for stocks, after inflation, your investment will grow easily past $20M in inflated dollars in 25 years without you doing anything.
$ 20 MM needed is "in today's dollars" as i mentioned in my OP. But thank you for your advise however.
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PN5048PC
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

WolfgangPauli wrote: Sat Feb 01, 2025 3:38 pm
PN5048PC wrote: Sat Feb 01, 2025 1:45 pm Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. Current living expenses taken care of fully by job salary until such time SS kicks in. Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods. Thanks so much in advance in anticipation of your replies/advise.
At $10mm, you can afford $120 per year.. Sign up for Boldin Planner and do what if scenarios. A lot of detail provided and will give you probabilities .. .probabilities are the only answers that can be given as nothing is certain. Here are a few questions though:

1. How much, if any, of the $3MM in real estate is your primary home. Yes, that is part of your net worth but not investable. - $750K. Rest are investment properties and anticipated inheritance (real estate)
2. Have you "marked up" your real estate to what people consider the value today? If so, I would not do that. Values will come down and bounce around. To be safe I keep my real estate at "book value". - Yes values are not inflated and close to book value.
Please see my responses embedded in your questions
Last edited by PN5048PC on Sat Feb 01, 2025 6:35 pm, edited 1 time in total.
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PN5048PC
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

Wwwdotcom wrote: Sat Feb 01, 2025 3:43 pm I think you'd maximize your chances by downsizing from a $3M house to a $0.5M house. That would probably lower your property taxes and give you an additional 2.5M to invest. Your investment portfolio would now be 9.5M instead of 7M. I still don't think its rational to think/assume you are going to get there without a lucrative job. Overall, I think this is silly. Someone wanting to cut their living expenses and work more years in a high stress or risky job just to give their children $20M instead of $15M...
Valid point. Living modestly (yet comfortably) is how we were raised...old habits die hard even if i try. Re my primary home it is only ~ $ 750K..others are RE investments.
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PN5048PC
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

White Coat Investor wrote: Sat Feb 01, 2025 3:59 pm
PN5048PC wrote: Sat Feb 01, 2025 1:45 pm Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. Current living expenses taken care of fully by job salary until such time SS kicks in. Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods. Thanks so much in advance in anticipation of your replies/advise.
Real estate isn't a fixed asset.

And growing $10 million to $20 million in 20-25 years is child's play. You only need a return of 2.81%

=RATE(25,0,-10000000,20000000) = 2.81%.

You could do that with cash and maybe even whole life insurance. You could buy a single 25 year treasury bond. No stocks or real estate or anything else needed.

Is that really your only goal, to double your money in nominal terms within 25 years? Maybe aim a little higher?
Based on other posts, appears i should get a return of ~8% (at 2.5% inflation) over a 20 yr period to double my money. Per your sentiments, i also really like to aim for higher and seek double digit returns but not comfortable with the risk exposure..Id rather aim for lower returns for lower risk.
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PN5048PC
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

Rajsx wrote: Sat Feb 01, 2025 5:22 pm Make it easy on yourself, consider yourself lucky & fortunate, look up VBIAX & do not look back, go enjoy yourself

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Thank you. Unfortunately, I have had more than my share of lives challenges, setbacks and disappointments elsehwere, but i still do consider myself fortunate and lucky (atleast most of the time)
Last edited by PN5048PC on Sat Feb 01, 2025 9:02 pm, edited 1 time in total.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by maj »

Topic Author:
If you settle for VBIAX, you have chosen to live the years ahead in peace.
Congratulations.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by snackdog »

Barring a financial meltdown, you should hit your goal in ten years.
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WeakOldGuy
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by WeakOldGuy »

smitcat wrote: Sat Feb 01, 2025 5:11 pm
WeakOldGuy wrote: Sat Feb 01, 2025 3:28 pm Assuming you want $20M in real dollars (inflation adjust so the equivalent of $20M in today's dollars) you would need to get about 3.5% ROR in addition to whatever inflation is going to be. If you assume an average inflation of 3% (just a wild inaccurate guess) then you would need a nominal return of 7.5%.

A low-moderate risk portfolio is typically viewed as around 60/40, 60% stocks, 40% bonds. In the past, a 60/40 portfolio would get you to your goal in most 20 year periods, but not all. I have no confidence that the future returns will be as good as they have been in the past. Rather than 3.5% inflation adjusted real returns, I'm only expecting a 2.5% real return over the next 20 years. But then I'm a pessimist.
The historical returns of a 60/40 portfolio was 8.6% and the inflation rate for that same time period was 3%.
So the net historical return after inflation has been 5.6%, much larger than 3.5%.
https://investor.vanguard.com/investor- ... allocation
Thank you.

Are you saying that there were no 20 year periods when the real return of a 60/40 portfolio was less than 3.5%? I could be wrong, but I think that 1929, 1939, 1959, 1968, 1973, 1988, and 2000 would all likely qualify as the start of 20 year periods where the real returns of a 60/40 portfolio were less than 3.5%.

If the average historical returns, from 1926-2022 were 8.6% do you think that the future returns will be roughly the same?

I'm just saying that I wouldn't count on getting at least a 3.5% real return over a 20 year period in the future.
On investing; I have lots of questions, many opinions, and little knowledge. A dangerous combination. Be warned.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by smitcat »

WeakOldGuy wrote: Sat Feb 01, 2025 7:21 pm
smitcat wrote: Sat Feb 01, 2025 5:11 pm

The historical returns of a 60/40 portfolio was 8.6% and the inflation rate for that same time period was 3%.
So the net historical return after inflation has been 5.6%, much larger than 3.5%.
https://investor.vanguard.com/investor- ... allocation
Thank you.

Are you saying that there were no 20 year periods when the real return of a 60/40 portfolio was less than 3.5%? I could be wrong, but I think that 1929, 1939, 1959, 1968, 1973, 1988, and 2000 would all likely qualify as the start of 20 year periods where the real returns of a 60/40 portfolio were less than 3.5%.

If the average historical returns, from 1926-2022 were 8.6% do you think that the future returns will be roughly the same?

I'm just saying that I wouldn't count on getting at least a 3.5% real return over a 20 year period in the future.
Are you looking for the worst 20-25 year period for planning?
Or are you looking for the best 20-25 year period for planning?
Perhaps a good way to do this is to use the average returns for planning and then test the results using Monte Carlo or Historical return patterns to review the results.
FWIW - there is no real magic with the 20-25 years in this case ....as the funds are unused and will remain invested post the 20 year mark. The larger unknown is where these funds are located now and how will taxes affect their growth over time.
rufflesinc
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by rufflesinc »

If someone in OP's shoes has $10mm net worth and simply wants to growth it as an estate, then doesn't it make sense to put it 100% in S&P 500. Since no op won't be relying on it, then why not just let it ride?

As for historical returns, I was checking the other day, and correct me if I'm wrong but the DJIA returned less than 4% annually between 1915 (earliest i can find) and 1975
itnetpro
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by itnetpro »

PN5048PC wrote: Sat Feb 01, 2025 1:45 pm Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. Current living expenses taken care of fully by job salary until such time SS kicks in. Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods. Thanks so much in advance in anticipation of your replies/advise.
Throw the $7,000,000 in the .18% 100 year old Wellington fund VWENX, set and forget, and you will have a 50 percentile chance of over 21 million (real) or 35 million (nominal) dollars in 20 years.

It does throw off some dividends so best in a tax deferred account re-investing them.

https://www.portfoliovisualizer.com/mon ... gxn845rwB8

https://www.morningstar.com/funds/xnas/vwenx/quote

John
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docL
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by docL »

PN5048PC wrote: Sat Feb 01, 2025 1:45 pm Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. Current living expenses taken care of fully by job salary until such time SS kicks in. Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods. Thanks so much in advance in anticipation of your replies/advise.
as pointed out by others, obtaining $20M inflation adjusted in 25 years is childs play from an investing point of view. Pick some sort of allocation between 50/50 and 80/20 and just do nothing and it will take care of itself.

The more relevant question for you to ask yourself, though, is what is so special about that actual number? I mean clearly nobody you are going to leave the money to has a specific dollar amount in mind. If you truly aren't going to use any of it yourself and just want to maximize the value of it to your heirs than tilting far more towards equities is probably the right answer. Something like 90/10 or 100/0 is going to have a higher median and mean and whatever other measure you want return over that time frame and maximize the expected future value of your investment.

If ending up with something like $15M is not that big of a loss to you, than you should go more conservative on the investments. If ending up with way more than $20M has value to you, then go more aggressive. But you are in an easy place to succeed, don't overthink it.
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PN5048PC
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

smitcat wrote: Sat Feb 01, 2025 7:29 pm
WeakOldGuy wrote: Sat Feb 01, 2025 7:21 pm

Thank you.

Are you saying that there were no 20 year periods when the real return of a 60/40 portfolio was less than 3.5%? I could be wrong, but I think that 1929, 1939, 1959, 1968, 1973, 1988, and 2000 would all likely qualify as the start of 20 year periods where the real returns of a 60/40 portfolio were less than 3.5%.

If the average historical returns, from 1926-2022 were 8.6% do you think that the future returns will be roughly the same?

I'm just saying that I wouldn't count on getting at least a 3.5% real return over a 20 year period in the future.
Are you looking for the worst 20-25 year period for planning?
Or are you looking for the best 20-25 year period for planning?
Perhaps a good way to do this is to use the average returns for planning and then test the results using Monte Carlo or Historical return patterns to review the results.
FWIW - there is no real magic with the 20-25 years in this case ....as the funds are unused and will remain invested post the 20 year mark. The larger unknown is where these funds are located now and how will taxes affect their growth over time.
the $7 MM are in a combination of 401Ks, IRAs, other tax sheltered and Brokerage (Taxed) Accounts. Yes tax withdrawal planning becomes critical esp. for RMD. Plan to dive into this in the next phase of my financial planning.
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PN5048PC
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

docL wrote: Sat Feb 01, 2025 8:04 pm
PN5048PC wrote: Sat Feb 01, 2025 1:45 pm Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. Current living expenses taken care of fully by job salary until such time SS kicks in. Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods. Thanks so much in advance in anticipation of your replies/advise.
as pointed out by others, obtaining $20M inflation adjusted in 25 years is childs play from an investing point of view. Pick some sort of allocation between 50/50 and 80/20 and just do nothing and it will take care of itself.

The more relevant question for you to ask yourself, though, is what is so special about that actual number? I mean clearly nobody you are going to leave the money to has a specific dollar amount in mind. If you truly aren't going to use any of it yourself and just want to maximize the value of it to your heirs than tilting far more towards equities is probably the right answer. Something like 90/10 or 100/0 is going to have a higher median and mean and whatever other measure you want return over that time frame and maximize the expected future value of your investment.

If ending up with something like $15M is not that big of a loss to you, than you should go more conservative on the investments. If ending up with way more than $20M has value to you, then go more aggressive. But you are in an easy place to succeed, don't overthink it.
Agree re $15 MM vs $20 MM; it is simply my personal desire to leave a legacy of atleast $20 MM; driven largely by my concerns of what is going to happen to our country's and global economy in the next generation (so my progeny has a secure financial future)
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by goodenyou »

PN5048PC wrote: Sat Feb 01, 2025 9:13 pm
docL wrote: Sat Feb 01, 2025 8:04 pm

as pointed out by others, obtaining $20M inflation adjusted in 25 years is childs play from an investing point of view. Pick some sort of allocation between 50/50 and 80/20 and just do nothing and it will take care of itself.

The more relevant question for you to ask yourself, though, is what is so special about that actual number? I mean clearly nobody you are going to leave the money to has a specific dollar amount in mind. If you truly aren't going to use any of it yourself and just want to maximize the value of it to your heirs than tilting far more towards equities is probably the right answer. Something like 90/10 or 100/0 is going to have a higher median and mean and whatever other measure you want return over that time frame and maximize the expected future value of your investment.

If ending up with something like $15M is not that big of a loss to you, than you should go more conservative on the investments. If ending up with way more than $20M has value to you, then go more aggressive. But you are in an easy place to succeed, don't overthink it.
Agree re $15 MM vs $20 MM; it is simply my personal desire to leave a legacy of atleast $20 MM; driven largely by my concerns of what is going to happen to our country's and global economy in the next generation (so my progeny has a secure financial future)
I am assuming you are predicting high inflation by the comment "what is going to happen to our country". If that is the only thing to worry about, and not a total meltdown (in which you should be hoarding canned goods, guns and ammo), then plan for inflation with a hefty dose of TIPS.

Of course, predictions can be wrong and cause you to under perform and miss your $20M goal.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by sfnerd »

goodenyou wrote: Sat Feb 01, 2025 10:21 pm
PN5048PC wrote: Sat Feb 01, 2025 9:13 pm Agree re $15 MM vs $20 MM; it is simply my personal desire to leave a legacy of atleast $20 MM; driven largely by my concerns of what is going to happen to our country's and global economy in the next generation (so my progeny has a secure financial future)
I am assuming you are predicting high inflation by the comment "what is going to happen to our country". If that is the only thing to worry about, and not a total meltdown (in which you should be hoarding canned goods, guns and ammo), then plan for inflation with a hefty dose of TIPS.

Of course, predictions can be wrong and cause you to under perform and miss your $20M goal.
Inflation isn't the only risk (and a shrinking one at the moment, though things can change quickly). Discussing futute policy and politics is not allowed on this board, so it would be hard to discuss these risks without venturing into this area.

One undeniable fact, however, that is true regardless of the political climate, is that wealth inequality is rising. Leaving an inheritance to one's offspring is a way to shield them from this state of affairs. Ironically and unfortunately, this has an exacerbating affect on wealth inequality.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by dogagility »

PN5048PC wrote: Sat Feb 01, 2025 9:13 pm Agree re $15 MM vs $20 MM; it is simply my personal desire to leave a legacy of atleast $20 MM...
The most absolute way to turn 10M into a future real dollar value is to invest the money in an individual TIPS bond.

With the 10M you could...
  • Purchase a 20 year TIPS bond (CUSIP Number: 912810RR1) with a current real yield to maturity of 2.44%. This would practically guarantee you 13M in real dollars in 2046.
  • Purchase a 25 year TIPS bond (CUSIP Number: 912810SV1) with a current real yield to maturity of 2.43%. This would practically guarantee you 18M in real dollars in 2051.
I don't know of any other investment that will practically guarantee you of a future real amount of money.

However, you can very likely (not guaranteed) have a much higher real value in 20 to 25 years by investing a large portion or all of the 10M in equity index funds. If you're concerned about the "economy" (irrationally in my opinion) then you probably don't want to take this route. But it will likely reduce your heir's inheritance...

For example, here's a Monte Carlo simulation of a 60% total US equity and 40% total international equity portfolio. https://www.portfoliovisualizer.com/mon ... 3tHDAxsIxV The midpoint (50th percentile) real return in 20 years is 37M and in 25 years is 50M. The 10th percentile about matches purchasing an individual TIPS bond...
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by dbr »

dogagility wrote: Sun Feb 02, 2025 2:23 am
PN5048PC wrote: Sat Feb 01, 2025 9:13 pm Agree re $15 MM vs $20 MM; it is simply my personal desire to leave a legacy of atleast $20 MM...
The most absolute way to turn 10M into a future real dollar value is to invest the money in an individual TIPS bond.

With the 10M you could...
  • Purchase a 20 year TIPS bond (CUSIP Number: 912810RR1) with a current real yield to maturity of 2.44%. This would practically guarantee you 13M in real dollars in 2046.
  • Purchase a 25 year TIPS bond (CUSIP Number: 912810SV1) with a current real yield to maturity of 2.43%. This would practically guarantee you 18M in real dollars in 2051.
I don't know of any other investment that will practically guarantee you of a future real amount of money.

However, you can very likely (not guaranteed) have a much higher real value in 20 to 25 years by investing a large portion or all of the 10M in equity index funds. If you're concerned about the "economy" (irrationally in my opinion) then you probably don't want to take this route. But it will likely reduce your heir's inheritance...

For example, here's a Monte Carlo simulation of a 60% total US equity and 40% total international equity portfolio. https://www.portfoliovisualizer.com/mon ... 3tHDAxsIxV The midpoint (50th percentile) real return in 20 years is 37M and in 25 years is 50M. The 10th percentile about matches purchasing an individual TIPS bond...
Yes, the OP has done a clever job of specifying goals that are just not able to be achieved, viz. $20MM real and no risk. People do that sort of thing all the time.

So now there are choices to be made.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by rufflesinc »

dbr wrote: Sun Feb 02, 2025 6:53 am
Yes, the OP has done a clever job of specifying goals that are just not able to be achieved, viz. $20MM real and no risk. People do that sort of thing all the time.

So now there are choices to be made.
But op didn't say no risk, rather
Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods.
Isn't the S&P 500 moderate risk , and not questionable, novel, or risky investment?
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by dbr »

rufflesinc wrote: Sun Feb 02, 2025 6:58 am
dbr wrote: Sun Feb 02, 2025 6:53 am
Yes, the OP has done a clever job of specifying goals that are just not able to be achieved, viz. $20MM real and no risk. People do that sort of thing all the time.

So now there are choices to be made.
But op didn't say no risk, rather
Willing to tolerate only moderate/mild risk and not seeking questionable, novel or risky investments/methods.
Isn't the S&P 500 moderate risk , and not questionable, novel, or risky investment?
Most people would regard the stock market as high risk. For example loss in a year of half your assets is possible and has happened close to that twice in the last 25 years. A loss in a year of 90% of the wealth has happened. The question is how much and how fast the wealth comes back. A repeat of year 2000 near the end of his time period would probably not be what the OP has in mind.

A person could observe this price chart and decide if this is ok for them or not: https://www.morningstar.com/features/wh ... us-in-2020 The comparison is this compared to the actual high certainty of TIPS that, however, fall a tad short.

A different view is available here showing total returns history from different starting years (putting in zero for spending and choosing stock bond allocation): https://engaging-data.com/visualizing-4-rule/
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by docL »

dbr wrote: Sun Feb 02, 2025 7:17 am Most people would regard the stock market as high risk. For example loss in a year of half your assets is possible and has happened close to that twice in the last 25 years. A loss in a year of 90% of the wealth has happened. The question is how much and how fast the wealth comes back. A repeat of year 2000 near the end of his time period would probably not be what the OP has in mind.
The stock market is only "high risk" if you have a very short time frame in mind. The longer your time frame, the less risky it becomes. The worst 20 or 25 year time frame of the US stock market does not look nearly as scary.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by rufflesinc »

dbr wrote: Sun Feb 02, 2025 7:17 am A repeat of year 2000 near the end of his time period would probably not be what the OP has in mind.
What does this mean? S&p500 had annualized returns of over 15% for 20 and 25 year periods ending 2000
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by dbr »

docL wrote: Sun Feb 02, 2025 7:25 am
dbr wrote: Sun Feb 02, 2025 7:17 am Most people would regard the stock market as high risk. For example loss in a year of half your assets is possible and has happened close to that twice in the last 25 years. A loss in a year of 90% of the wealth has happened. The question is how much and how fast the wealth comes back. A repeat of year 2000 near the end of his time period would probably not be what the OP has in mind.
The stock market is only "high risk" if you have a very short time frame in mind. The longer your time frame, the less risky it becomes. The worst 20 or 25 year time frame of the US stock market does not look nearly as scary.
The longer the time the more risky it becomes.* The dispersion increases with time. It is a race between the rising average result and the possible lowest percentile range around that result, which could be short of the goal even if the average return is over the goal. The OP has to look at the prospects for a statistical result that has those properties. I referred to the Engaging Data chart to help understand that. This compares to the certainly of a 25 year TIPS that does very well but falls with certainty just short of the goal. So the OP has to decide how serious he is about the goal compared to how undesirable a lot of uncertainty is.

*A good discussion of that is here: https://danluu.com/norstad/risk-time/
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by dbr »

rufflesinc wrote: Sun Feb 02, 2025 7:31 am
dbr wrote: Sun Feb 02, 2025 7:17 am A repeat of year 2000 near the end of his time period would probably not be what the OP has in mind.
What does this mean? S&p500 had annualized returns of over 15% for 20 and 25 year periods ending 2000
It means what would the OP would say about large losses in one year depending on whether or not he liquidates the investment in 1999 or 2001 or he just continues on to 2010-2020-2030 in the person of his heirs.

The point is to ask what is the OPs idea about risk. I don't think it is well expressed. Your idea and my idea about risk is probably about the same, but I want to hear from the OP. Keep in mind most of us would probably put all the money in the stock market and let it run. On this forum there is all sorts of wailing and grinding of teeth if a person loses a dollar unexpectedly. We don't know where the OP is coming from. "Moderate/mild" is not language that pins this down well enough that I would advise just putting the money into stocks.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by cableguy »

4.5%.....16 years....$10M becomes $20M. Buy a $10M 16 year CD. LOL. So many other questions, factors.....but this is your easy answer...
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

dbr wrote: Sun Feb 02, 2025 7:40 am
rufflesinc wrote: Sun Feb 02, 2025 7:31 am

What does this mean? S&p500 had annualized returns of over 15% for 20 and 25 year periods ending 2000
It means what would the OP would say about large losses in one year depending on whether or not he liquidates the investment in 1999 or 2001 or he just continues on to 2010-2020-2030 in the person of his heirs.

The point is to ask what is the OPs idea about risk. I don't think it is well expressed. Your idea and my idea about risk is probably about the same, but I want to hear from the OP. Keep in mind most of us would probably put all the money in the stock market and let it run. On this forum there is all sorts of wailing and grinding of teeth if a person loses a dollar unexpectedly. We don't know where the OP is coming from. "Moderate/mild" is not language that pins this down well enough that I would advise just putting the money into stocks.
Thank you for the robust/spirted discussions. I do NOT consider stock market (equities) to be a risky investment. I am willing to tolerate what the investment industry would define as 'moderate' or "moderately aggressive" portfolio which is a mixture of stocks, bonds, MM et al via individual holdings, ETF, MF et al. Risky investments for me would be things like Crypto which i don't understand well and thus avoid. hope this helps.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by goodenyou »

Is your goal to leave a bequest of $20M real? Are you not going to spend from the the current $10M portfolio along the way? If so, won't you need a much better return to fund your expenses along the way to get to the end with $20M?
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

sfnerd wrote: Sat Feb 01, 2025 11:54 pm
goodenyou wrote: Sat Feb 01, 2025 10:21 pm

I am assuming you are predicting high inflation by the comment "what is going to happen to our country". If that is the only thing to worry about, and not a total meltdown (in which you should be hoarding canned goods, guns and ammo), then plan for inflation with a hefty dose of TIPS.

Of course, predictions can be wrong and cause you to under perform and miss your $20M goal.
Inflation isn't the only risk (and a shrinking one at the moment, though things can change quickly). Discussing futute policy and politics is not allowed on this board, so it would be hard to discuss these risks without venturing into this area.

One undeniable fact, however, that is true regardless of the political climate, is that wealth inequality is rising. Leaving an inheritance to one's offspring is a way to shield them from this state of affairs. Ironically and unfortunately, this has an exacerbating affect on wealth inequality.
You hit the nail on the head. My primary concern is a slow and steady decline of the US economy and the job market over an extended period of time..it is already a proven fact that first time in US history our children are worse off than their parents generation and i am afraid this will only continue and hence my desire to provide atleast some protection/cushion for them if i am able to, even if that means if i need to make some sacrifices.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

goodenyou wrote: Sun Feb 02, 2025 8:01 am Is your goal to leave a bequest of $20M real? Are you not going to spend from the the current $10M portfolio along the way? If so, won't you need a much better return to fund your expenses along the way to get to the end with $20M?
From my original post -- "Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. "Current living expenses taken care of fully by job salary until such time SS kicks in"...
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by smitcat »

PN5048PC wrote: Sat Feb 01, 2025 9:08 pm
smitcat wrote: Sat Feb 01, 2025 7:29 pm

Are you looking for the worst 20-25 year period for planning?
Or are you looking for the best 20-25 year period for planning?
Perhaps a good way to do this is to use the average returns for planning and then test the results using Monte Carlo or Historical return patterns to review the results.
FWIW - there is no real magic with the 20-25 years in this case ....as the funds are unused and will remain invested post the 20 year mark. The larger unknown is where these funds are located now and how will taxes affect their growth over time.
the $7 MM are in a combination of 401Ks, IRAs, other tax sheltered and Brokerage (Taxed) Accounts. Yes tax withdrawal planning becomes critical esp. for RMD. Plan to dive into this in the next phase of my financial planning.
Tax withdrawal strategies as well as tax drag strategies. (both tax deferred and taxable accounts)
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by goodenyou »

PN5048PC wrote: Sun Feb 02, 2025 8:06 am
goodenyou wrote: Sun Feb 02, 2025 8:01 am Is your goal to leave a bequest of $20M real? Are you not going to spend from the the current $10M portfolio along the way? If so, won't you need a much better return to fund your expenses along the way to get to the end with $20M?
From my original post -- "Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. "Current living expenses taken care of fully by job salary until such time SS kicks in"...
I read the OP before I posted my response. Am I to understand that this $10M is separate from a portfolio that it tasked with providing you with living expenses throughout your retirement? Or are you planning on working and earning wages until you die?
Is this $10M set aside for your children already in some sort of irrevocable trust that you want to grow to $20M separate of your living expenses portfolio?
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

goodenyou wrote: Sun Feb 02, 2025 8:16 am
PN5048PC wrote: Sun Feb 02, 2025 8:06 am From my original post -- "Seeking advise on how to grow this to $ 20 MM (in todays dollars) in 20-25 year timeframe..desire to leave this as legacy for progeny. Hold~ $7 MM in invested/investable assets and ~$ 3 MM in fixed assets (real estate mainly). No debt. Live modestly. "Current living expenses taken care of fully by job salary until such time SS kicks in"...
I read the OP before I posted my response. Am I to understand that this $10M is separate from a portfolio that it tasked with providing you with living expenses throughout your retirement? Or are you planning on working and earning wages until you die?
Is this $10M set aside for your children already in some sort of irrevocable trust that you want to grow to $20M separate of your living expenses portfolio?
Yes for the purposes of these chats/discussions , a ~$7 MM investable portfolio is to grow to a $ 20 MM (in todays dollars) in the next 20-25 yrs. Not including nor wish to include the ~ $3MM Real estate holdings in this calculus. i hope this helps.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by docL »

dbr wrote: Sun Feb 02, 2025 7:33 am *A good discussion of that is here: https://danluu.com/norstad/risk-time/
I'm just going to disagree with almost everything posted there. I mean one part literally describes an investment returning 14x over 40 years as a bad outcome. It also includes what the author describes as the most convincing argument he has read to define long term risk as 20 months in duration.

The best I can say about that link is that it accurately describes the risk of the stock market over a 1-3 year time frame.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by goodenyou »

PN5048PC wrote: Sun Feb 02, 2025 8:30 am
goodenyou wrote: Sun Feb 02, 2025 8:16 am

I read the OP before I posted my response. Am I to understand that this $10M is separate from a portfolio that it tasked with providing you with living expenses throughout your retirement? Or are you planning on working and earning wages until you die?
Is this $10M set aside for your children already in some sort of irrevocable trust that you want to grow to $20M separate of your living expenses portfolio?
Yes for the purposes of these chats/discussions , a ~$7 MM investable portfolio is to grow to a $ 20 MM (in todays dollars) in the next 20-25 yrs. Not including nor wish to include the ~ $3MM Real estate holdings in this calculus. i hope this helps.
Got it. The math is a bit different growing $7M to $20M than $10M to $20M.

If it is imperative that the kids to hit the ground running with $20M in 20-25 years at whatever age they will be at that time, then you will need to be out of the risk arena of investing. Arguably, in order to do that, TIPS seem to be the best option. However, not sure you can grow $7M to $20M with TIPS purchased today. If you aren't anchored to $20M in 20-25 years, maybe the bequest will be smaller, if you take risk, but the portfolio at that time may grow as the kids get older. They may also share your modesty and not "need" $20M at their age 20-25 years from now and can wait for the assets to grow and maybe give it to your grandchildren.
Last edited by goodenyou on Sun Feb 02, 2025 8:51 am, edited 1 time in total.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by PN5048PC »

To ALL the reply posters - THANK YOU!. I am learning a lot from this community and please keep the discussions going...i will try my best to continue respond to the questions/queries addressed to me as much as i can.
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Re: $10 MM Net worth..need advise on growing to $20 MM

Post by Wanderingwheelz »

PN5048PC wrote: Sun Feb 02, 2025 8:03 am
sfnerd wrote: Sat Feb 01, 2025 11:54 pm

Inflation isn't the only risk (and a shrinking one at the moment, though things can change quickly). Discussing futute policy and politics is not allowed on this board, so it would be hard to discuss these risks without venturing into this area.

One undeniable fact, however, that is true regardless of the political climate, is that wealth inequality is rising. Leaving an inheritance to one's offspring is a way to shield them from this state of affairs. Ironically and unfortunately, this has an exacerbating affect on wealth inequality.
You hit the nail on the head. My primary concern is a slow and steady decline of the US economy and the job market over an extended period of time..it is already a proven fact that first time in US history our children are worse off than their parents generation and i am afraid this will only continue and hence my desire to provide atleast some protection/cushion for them if i am able to, even if that means if i need to make some sacrifices.
I didn’t catch how old your kids are if it was mentioned but it’s important to remember that it’s highly likely they’ll need help all along the way leading up to when you croak and leave them the hypothetical $20MM to divide up.

There will be a lot of decisions you can be involved in, like okay she can afford this particular apartment on her own, but what if we subsidize her so that she’s able to live in a much safer location with behind garage parking and a better group of neighbors to keep an eye on things? The “worse off” scenario you’re so worried over doesn’t magically start on your date of you’re death.

I’d try to forget about leaving some random meaningless number at the end for the likelihood you’d miss all of the small-medium things you can do to help over the 30-40 years leading up to that point. It encourages frugality when the name of the game should be to be acutely aware of what you’re able to do to maximize the safety and happiness of your offspring even well into adulthood.
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