First post in 10 yrs. Somehow I got rich…

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DaveRamseyfan
Posts: 8
Joined: Sat Jul 12, 2014 9:49 am

First post in 10 yrs. Somehow I got rich…

Post by DaveRamseyfan »

-Cliff notes: started a company in November 2014.
-Current Age 41
-ZERO DEBT in personal life or business!!!
-INCOME: over $500k/yr and increasing yearly
-10 yrs later I have a paid off house $750k.
-$550k in brokerage account. I invested $100k in 8 stocks in March of 2019 during the Covid crash. Sold some and rebought during dips. Mostly dumb luck I guess.
-another $200k in a simple Ira. Mutual funds.
-$550k in my business account. I owe 90k in taxes out of this.
-$290k in a cd with money from my business account.
-$270k in high yield savings account CIT.
-$272k in another high yield savings Citizens access.


So my problem is what to do next. I want to continue the exponential success but I’m kind of getting overwhelmed with where I should go next. I’m terrified of losing what I’ve made. Part of me wants to keep buying and holding stocks long term with my $550k in the brokerage account bc honestly it’s making loads at the moment. Another part of me wants to sell all stocks and invest in mutual funds or index funds until some other major crash. I don’t have the time to learn about stock investing so I just try to buy on bad news…. Thoughts?? what would you do in my position given my limited investing knowledge
theorist
Posts: 1372
Joined: Sat Sep 28, 2019 11:39 am

Re: First post in 10 yrs. Somehow I got rich…

Post by theorist »

DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am -Cliff notes: started a company in November 2014.
-Current Age 41
-ZERO DEBT in personal life or business!!!
-INCOME: over $500k/yr and increasing yearly
-10 yrs later I have a paid off house $750k.
-$550k in brokerage account. I invested $100k in 8 stocks in March of 2019 during the Covid crash. Sold some and rebought during dips. Mostly dumb luck I guess.
-another $200k in a simple Ira. Mutual funds.
-$550k in my business account. I owe 90k in taxes out of this.
-$290k in a cd with money from my business account.
-$270k in high yield savings account CIT.
-$272k in another high yield savings Citizens access.


So my problem is what to do next. I want to continue the exponential success but I’m kind of getting overwhelmed with where I should go next. I’m terrified of losing what I’ve made. Part of me wants to keep buying and holding stocks long term with my $550k in the brokerage account bc honestly it’s making loads at the moment. Another part of me wants to sell all stocks and invest in mutual funds or index funds until some other major crash. I don’t have the time to learn about stock investing so I just try to buy on bad news…. Thoughts?? what would you do in my position given my limited investing knowledge
This is bogleheads. I’d invest any new money in a balanced portfolio of stock and bond index funds, with a bond allocation designed to keep you calm during market volatility. Depending on tax implications, you could either hold onto your single stocks in the taxable account, or slowly sell them down. At your income level, if you invest a large amount yearly, you’ll be mostly indexed in a few years anyway.

I wouldn’t wait to time the market — anyway, your next set of idiosyncratic stock picks may not perform well. With your income just keep steadily investing, and you’ll not need to think about money much again in a few years.
PoppyA
Posts: 1294
Joined: Sat Oct 11, 2014 4:24 pm

Re: First post in 10 yrs. Somehow I got rich…

Post by PoppyA »

Well done!

A couple questions:

Do you have access to any tax deferred accounts via your business?

Have you thought about setting an asset allocation in your mind? Friend, over the course of your life stocks will tank & stocks will explode. You need to think about what combination of stocks/cash you can sleep with at night. Look at the wiki here to learn more about this subject.

After that it becomes about making consistent deposits into your accounts and keeping your asset allocation where you like it based on what season of life you are in.

Best wishes.
YeahBuddy
Posts: 2989
Joined: Tue Oct 31, 2017 12:55 pm

Re: First post in 10 yrs. Somehow I got rich…

Post by YeahBuddy »

Congrats! I wish I could start my own business. Just don't know what business or how to do it. Seems like a steep learning curve.

If I were you, I would read about the Boglehead lazy 3 fund portfolio. I have linked it below. Just set it and forget it. I would then enjoy some of that money. You're doing very well and no need to stress anymore.


viewtopic.php?t=88005

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

https://www.bogleheads.org/wiki/Lazy_portfolios
Light weight baby!
sailaway
Posts: 9174
Joined: Fri May 12, 2017 1:11 pm

Re: First post in 10 yrs. Somehow I got rich…

Post by sailaway »

I just buy index funds and leave them. We can earn much more consistently by focusing on paid work than hoping to time the market. The we have plenty to invest in the dips, although we also invest on the highs. Just whenever we have the funds. I don't know how much is spending versus investing bogleheads style, but we never earned $500k and had a similar net worth by the time DH was 40.

We found an investment policy statement reassuring through the ups and downs. Should I try to time? No, just follow the plan. This includes rebalancing to our desired AA on a schedule rather than in reaction to news.

I also take advantage of tax sheltered accounts. When I was last self employed, I created a 401k for this purpose.
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Watty
Posts: 30170
Joined: Wed Oct 10, 2007 3:55 pm

Re: First post in 10 yrs. Somehow I got rich…

Post by Watty »

DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am So my problem is what to do next.
Talk to your accountant ASAP about getting tax deferred retirement accounts setup before the end of the year so you can take advantage of them in 2024.

There is also a getting started wiki for investing if you have not seen it.

https://www.bogleheads.org/wiki/Getting_started
DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am I don’t have the time to learn about stock investing so I just try to buy on bad news…. Thoughts?? what would you do in my position given my limited investing knowledge


1) Max out all tax advantaged accounts, likely over $50K a year since you own a business.

2) Invest in a simple three fund portfolio.
https://www.bogleheads.org/wiki/Three-fund_portfolio
https://www.bogleheads.org/wiki/Tax-eff ... _placement

3) Spend your available time focused on your business since it is so much more profitable than systematic stock picking would be. A mutual fund manager or financial advisor would be in the investing hall of fame if they could consistently pick stocks which beat index funds but 1% over the long term, and over the next 40 years that would also make a huge difference with the way that investments compound.

You need to keep in mind that you have about $2 million so stock picking and getting an extra 1% a year is only $20K. That is nice enough but with it sounds a lot easier to make $20K in your business than stock picking.

Expecting to stock pick and beat the indexes is optimistic, expecting to best them by 10% is not realistic. Expecting to beat them without spending LOTS of time figuring out which stocks to buy is also not realistic, people working on Wall Street often work 60 to 80 hour weeks and cannot beat the indexes.

4) Based on your user name you must be a Dave Ramsey fan. He is not popular here. He has helped a lot of people get out of debt but his investing advice is unrealistic and dangerous and he promotes high cost investments so once you get out of debt it is time to leave him behind.
pseudoiterative
Posts: 664
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Location: australia

Re: First post in 10 yrs. Somehow I got rich…

Post by pseudoiterative »

DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am So my problem is what to do next. I want to continue the exponential success but I’m kind of getting overwhelmed with where I should go next. I’m terrified of losing what I’ve made. Part of me wants to keep buying and holding stocks long term with my $550k in the brokerage account bc honestly it’s making loads at the moment. Another part of me wants to sell all stocks and invest in mutual funds or index funds until some other major crash.
One idea is to think through what you plan to use this wealth for, and work backwards from there. What's your goal?

Suppose you plan to buy a new house for about $1.5m in 2 years, and you don't want to delay these plans if there is stock market volatility. In this case it might be a good idea to park enough funds for this purchase in a low risk asset like your high yield savings accounts. An investment approach that might not align with this goal is being 100% invested in the stock market -- if market prices crash and do not recover by the time you need to raise cash for your purchase, that might put you in a position where your plans are unavoidably delayed, or stock needs to be sold at a large loss to raise enough cash.

Suppose instead you want to invest your wealth towards retirement at age 60, and have no plains to need a large amount of cash in the next decade or so. In this case you are in a position where you could accept much more risk if you wish to allocate a larger portion of your wealth to the stock market -- if stock market prices were to crash next year, because your plans do not require any large cash withdrawals that would otherwise force you to sell stock at a loss while market prices were depressed, you could stay invested in the market and ride out the volatility.

If you can pin down your goal, that can inform how much risk you are willing to accept, and could also help avoid getting too flustered by financial news and market volatility -- if the stock market is down this week, but within the range of what your long term plan can tolerate, what's to be concerned about?


one way to structure this type of thing is as an investment policy statement: https://www.bogleheads.org/wiki/Investm ... _statement

that might be a bit too formal place to start, but worth a read
HomeStretch
Posts: 12479
Joined: Thu Dec 27, 2018 2:06 pm

Re: First post in 10 yrs. Somehow I got rich…

Post by HomeStretch »

Congratulations, you have made impressive progress in 10 years in terms of increasing assets/income and eliminating debt. You have risk as a business owner and holding $559k in 8 stocks. Consider coming up with a plan to balance that by:

1. Investing the $542k in the high yield savings accounts into low-ER diversified equity/bond funds according to your desired asset allocation.

2. At a minimum, stop reinvesting dividends in your Taxable brokerage account. Invest the dividends in a U.S. total stock market fund.

3. Determine how much $ you need to retain for business capital and whether you should distribute the excess to invest for retirement as per #1.

Also do some of the suggested BH wiki reading to educate yourself on investing.
J295
Posts: 3687
Joined: Sun Jan 01, 2012 10:40 pm

Re: First post in 10 yrs. Somehow I got rich…

Post by J295 »

Address feeling “terrified” to lose what you have. You have a lengthy financial life in front of you and the equity markets over the next four decades in all probability will have some (very) rough patches. Can you buckle up for some chaos and a 50%+ equity drop sometime?

Create an IPS. See wiki. We have one. Three sentences. Simple and valuable.
muffins14
Posts: 6865
Joined: Wed Oct 26, 2016 4:14 am
Location: New York

Re: First post in 10 yrs. Somehow I got rich…

Post by muffins14 »

DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am -Cliff notes: started a company in November 2014.
-Current Age 41
-ZERO DEBT in personal life or business!!!
-INCOME: over $500k/yr and increasing yearly
-10 yrs later I have a paid off house $750k.
-$550k in brokerage account. I invested $100k in 8 stocks in March of 2019 during the Covid crash. Sold some and rebought during dips. Mostly dumb luck I guess.
-another $200k in a simple Ira. Mutual funds.
-$550k in my business account. I owe 90k in taxes out of this.
-$290k in a cd with money from my business account.
-$270k in high yield savings account CIT.
-$272k in another high yield savings Citizens access.


So my problem is what to do next. I want to continue the exponential success but I’m kind of getting overwhelmed with where I should go next. I’m terrified of losing what I’ve made. Part of me wants to keep buying and holding stocks long term with my $550k in the brokerage account bc honestly it’s making loads at the moment. Another part of me wants to sell all stocks and invest in mutual funds or index funds until some other major crash. I don’t have the time to learn about stock investing so I just try to buy on bad news…. Thoughts?? what would you do in my position given my limited investing knowledge

VTI, VXUS, VTEB

You probably have too much cash
Crom laughs at your Four Winds
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CyclingDuo
Posts: 6342
Joined: Fri Jan 06, 2017 8:07 am

Re: First post in 10 yrs. Somehow I got rich…

Post by CyclingDuo »

DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am -Cliff notes: started a company in November 2014.
-Current Age 41
-ZERO DEBT in personal life or business!!!
-INCOME: over $500k/yr and increasing yearly
-10 yrs later I have a paid off house $750k.
-$550k in brokerage account. I invested $100k in 8 stocks in March of 2019 during the Covid crash. Sold some and rebought during dips. Mostly dumb luck I guess.
-another $200k in a simple Ira. Mutual funds.
-$550k in my business account. I owe 90k in taxes out of this.
-$290k in a cd with money from my business account.
-$270k in high yield savings account CIT.
-$272k in another high yield savings Citizens access.


So my problem is what to do next. I want to continue the exponential success but I’m kind of getting overwhelmed with where I should go next. I’m terrified of losing what I’ve made. Part of me wants to keep buying and holding stocks long term with my $550k in the brokerage account bc honestly it’s making loads at the moment. Another part of me wants to sell all stocks and invest in mutual funds or index funds until some other major crash. I don’t have the time to learn about stock investing so I just try to buy on bad news…. Thoughts?? what would you do in my position given my limited investing knowledge
Congrats on increasing your income and getting out of debt! :beer

Small point, but the Covid crash was in March of 2020, not 2019. We are currently 4 years, and 7 months beyond that global market event.

As was brought up in your previous posts 10 years ago, Ramsey is indeed very good for helping households get out of debt which you have done. I'm not against his investing advice as Bogleheads have spent time distilling it down to a pretty simple formula and pointing out it is just another lazy portfolio in this thread: viewtopic.php?t=428329

If you want to see oodles of lazy portfolios, just look here: https://www.whitecoatinvestor.com/150-p ... han-yours/

In short, posters as well as an author over at Seeking Alpha took Ramsey's recommendation of 25% Growth and Income, 25% Growth, 25% Aggressive Growth, and 25% International to create a similar lazy portfolio via a low cost, index fund version - or rather a DIY Lazy Portfolio that is low cost and has no AUM fees associated with it.

The Seeking Alpha author article in the link above used Vanguard or Blackrock ETFs to get a lower cost Lazy Dave version...

Vanguard ETFs

VGK: 12.5% Vanguard European Stock Index Fund (ER .08)
VWO: 12.5% Vanguard Emerging Markets Stock Index Fund (ER .08)

VOO: 25% Vanguard 500 Index Fund (ER .01)
VYM: 25% Vanguard High Dividend Yield Index Fund (ER .08)
VBR: 25% Vanguard Small Cap Value Index Fund (ER .07)

Blackrock iShares ETFs

IXUS: 25% iShares Core MSCI Total International Stock (ER .07)
HDV: 25% iShares Core High Dividend ETF (ER .08)
IVV: 25% iShares Core S&P 500 ETF (ER .03)
IJS: 25% iShares S&P Small-Cap 600 Value ETF (ER .18)

In another thread here at Bogleheads, we distilled the Ramsey Portfolio and the performance of it down to just a two fund lazy portfolio: viewtopic.php?t=391896

VTI: 75% (Vanguard Total US Stock Market)
VXUS: 25% (Vanguard Total International Market)

A Lazy Portfolio is something you can stick with through thick and thin. Most of us here at Bogleheads would argue for keeping your costs low. Hiring an advisor who may charge an assets under management fee (AUM fee), and use mutual funds (or ETFs) that have higher expense ratios is what we would argue against in most cases because you could get the same for your yourself as a DIY investor, and at a lower cost by using a discount brokerage firm such as Schwab, Vanguard, or Fidelity by using the underlying lower cost index funds.

In your case, and as has been pointed out, you really should have a workplace tax deferred retirement plan for yourself. Although you have done well with the 8 stocks you purchased during the Covid dip, I agree with the other posters that going forward you should diversify with index funds to own the entire market. You still have plenty of years of accumulation ahead of you to take advantage of a low cost, lazy portfolio.

By age 40, one should have saved 3X their income in their investment accounts. So for you, 3 X $500K at age 40 for $1.5M would have been the suggested target in your investment accounts/savings using the benchmarks that Fidelity, JP Morgan, T.Rowe Price, etc. use along with their metrics of retiring around age 65-67 at one's FRA (full retirement age according to SS), and having a portfolio + SS in retirement for one's income.

Here are some of the guideline examples...

Fidelity wants you at 3X $500K for $1.5M by age 40
Image

JP Morgan wants you at $1.5M+ by age 40
Image

T.Rowe Price wants you at least to be at 2X $500 for $1M by age 40
Image

CyclingDuo
"Save like a pessimist, invest like an optimist." - Morgan Housel | "Pick a bushel, save a peck!" - Grandpa
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Sandtrap
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Location: Hawaii No Ka Oi - white sandy beaches, N. Arizona 1 mile high.

Re: First post in 10 yrs. Somehow I got rich…

Post by Sandtrap »

to op:
1
Focus on your business.
Maximize profit and profit margin
Minimize expenses while not compromising quality and professional service and customer focus
Don't leave any money on the table, run clean.
Minimize your operating eapital reserves/float
2
If you did not make a formal excellent business plan, do so now, then review and update very 3 years to keep your focus sharp and expansion clean and purposeful.
3
You can contact and consult with Vanguard VPAS customer rep to work with structuring your low cost index fund portfolio for a solit financial base now and a long term personal retirement strategy (which you need to do now), so that you can stay 200 percent focused on making the 100 dollars vs investing and saving the pennies. (as you are in business vs an employee with a fixed paycheck, you can do this all the more. right?

4
As far as the 3rd leg of your 3 legged stool (business, personal investing for retirement, diversification of incomes streams) (which dave ramsey supports for business peole as well).
Make this your 3rd job. work 24/7 right?

Read and do all of the below. Once you grasp the entirety of the forum wiki you will know as much or far more than most FA's and helpful wealth managers and private bankers and insurance annuaity salesman and brokerage consultants and others that want "to help you with your money" for a fee, etc. Right?

Okay: You can do this from beginning to the end. Take several years to become an expert at it, like another business. It is easy....but it is not.
j
GETTING STARTED
https://www.bogleheads.org/wiki/Getting_started
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
Bogle Philosophy
https://www.bogleheads.org/wiki/Bogleh ... hilosophy
Here are links to the wiki's "Getting Started" and "Investing Startup Kit" pages:
https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Bogleh ... rt-up_kit
Define General Investment Goals and Objectives (what is your plan?)
https://www.bogleheads.org/wiki/Invest ... statement
IPS Statement Worksheet PDF at Morningstar
http://news.morningstar.com/pdfs/inves ... pr2016.pdf
Outline of Investing
https://www.bogleheads.org/wiki/Outline_of_investing
Outline of Financial Planning (with links)
https://www.bogleheads.org/wiki/Outlin ... _planning
Funding Priority (what do I do first?)
https://www.bogleheads.org/wiki/Priori ... vestments
Tax Efficient Fund Placement
https://www.bogleheads.org/wiki/Tax-ef ... _placement
Asset allocation in multiple accounts
https://www.bogleheads.org/wiki/Asset ... accounts
Risk Tolerance (what is your "sleep factor"?)
https://www.bogleheads.org/wiki/Risk_tolerance
Asset Allocation (what is right for you?)
https://www.bogleheads.org/wiki/Asset_allocation
Emergency Fund
https://www.bogleheads.org/wiki/Emergency_fund
Bogle 3 Fund Portfolio Basics and Beyond
https://www.bogleheads.org/wiki/Three- ... _portfolio

**If you wanted to FIRE right now...you would not be "rich" as you state.
So....beware complacency. High cash flow does not beget "wealth". So, focus on long term wealth. Establish, much like a business plan, a personal projection plan to FIRE. So, you'll be able to qualify for let's say a 20 year plan or 15, etc to FIRE. Even if you don't, they can be benchmarks you use for "personal wealth reality checks". See?

Use any of these portfolio projection tools for your needs.
Engaging Data Site:
https://engaging-data.com/early-retirem ... and-tools/
TestFolio Website:
https://testfol.io/
Portfolio Visualizer site:
https://www.portfoliovisualizer.com/bac ... allocation

Complex is not better, simplicity is>
In your portfolio:
Eliminate or minimize fund overlaps, redundancies, and funds that are less than 5 percent of total (don't move the needle).
Read:
TAYLOR LARIMORE ON “SIMPLICTY”
https://www.bogleheads.org/forum/viewt ... p?t=156505

Suggested Reading List
https://www.bogleheads.org/RecommendedReading.php
Forum Library of Investing Advice with links
https://www.bogleheads.org/wiki/Main_Page

Outstanding write up on the 64/40 allocation by Bernstein.
http://web.archive.org/web/20061214061 ... in6040.pdf
R. Ferri on Bernstein's 60/40
http://www.etf.com/sections/index-inve ... nopaging=1

Free Reading: "If You Can" by Bernstein
https://www.google.com/url?sa=t&rct=j& ... -SB3S580I5

to op.. FWIW: at your age, I had only been 10 years into running 3 businesses. I was broke or felt broke. But, cash flow was high and expenses were high as well and the businesses were growing. I put off buying a home and having that debt and reinvested everything I had into the businesses. Had I known about the "bogleheads 3 legged stool approach for business owners, in concept", I would have embraced it as well for a long term goal of earning and aquiring "wealth". Fortunately, I was able to "FIRE" at age 58.

Congratulations on your successes: everything is in your hands at this point, take the ball....run.
j
Wiki Bogleheads Wiki: Everything You Need to Know
gips
Posts: 1966
Joined: Mon May 13, 2013 5:42 pm

Re: First post in 10 yrs. Somehow I got rich…

Post by gips »

Sandtrap wrote: Wed Oct 30, 2024 9:42 am to op:
1
Focus on your business.
Maximize profit and profit margin
Minimize expenses while not compromising quality and professional service and customer focus
Don't leave any money on the table, run clean.
Minimize your operating eapital reserves/float
2
If you did not make a formal excellent business plan, do so now, then review and update very 3 years to keep your focus sharp and expansion clean and purposeful.
As someone who was a partner in one startup and a co-founder of another, both ending with significant equity events, I’m not sure how one provides cookie cutter advice to a business owner. It’s common practice to sacrifice net margin for growth and without knowing an awful lot about OP’s business (product, customers, competition, equity event goals, scalability, etc) it’s impossible to make a recommendation around the right mix of profitability vs growth.

Additionally, the OPs business plan should be updated yearly as it provides conscious reflection for the coming year on growth opportunities, new products and services, partnership opportunities, projected income and expenses, new hires and progress against end state goals.

OP, if your end state goal is selling your business, it’s important to understand ebidta multiples for similar businesses and set goals for the sale price. For example, ours was $50mm revenue in five years. We didn’t achieve that goal but after five years, we had a nice ebidta multiple offer and decided to cash out.

Congrats on your success to date and good luck going forward!
User avatar
Sandtrap
Posts: 21537
Joined: Sat Nov 26, 2016 5:32 pm
Location: Hawaii No Ka Oi - white sandy beaches, N. Arizona 1 mile high.

Re: First post in 10 yrs. Somehow I got rich…

Post by Sandtrap »

gips wrote: Wed Oct 30, 2024 11:25 am
Sandtrap wrote: Wed Oct 30, 2024 9:42 am to op:
1
Focus on your business.
Maximize profit and profit margin
Minimize expenses while not compromising quality and professional service and customer focus
Don't leave any money on the table, run clean.
Minimize your operating eapital reserves/float
2
If you did not make a formal excellent business plan, do so now, then review and update very 3 years to keep your focus sharp and expansion clean and purposeful.
As someone who was a partner in one startup and a co-founder of another, both ending with significant equity events, I’m not sure how one provides cookie cutter advice to a business owner. It’s common practice to sacrifice net margin for growth and without knowing an awful lot about OP’s business (product, customers, competition, equity event goals, scalability, etc) it’s impossible to make a recommendation around the right mix of profitability vs growth.

Additionally, the OPs business plan should be updated yearly as it provides conscious reflection for the coming year on growth opportunities, new products and services, partnership opportunities, projected income and expenses, new hires and progress against end state goals.

OP, if your end state goal is selling your business, it’s important to understand ebidta multiples for similar businesses and set goals for the sale price. For example, ours was $50mm revenue in five years. We didn’t achieve that goal but after five years, we had a nice ebidta multiple offer and decided to cash out.

Congrats on your success to date and good luck going forward!
great points from professional and personal experience
well said
congratulations on your substantial successes as well

me ke aloha
j
Wiki Bogleheads Wiki: Everything You Need to Know
Topic Author
DaveRamseyfan
Posts: 8
Joined: Sat Jul 12, 2014 9:49 am

Re: First post in 10 yrs. Somehow I got rich…

Post by DaveRamseyfan »

theorist wrote: Wed Oct 30, 2024 2:43 am
DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am -Cliff notes: started a company in November 2014.
-Current Age 41
-ZERO DEBT in personal life or business!!!
-INCOME: over $500k/yr and increasing yearly
-10 yrs later I have a paid off house $750k.
-$550k in brokerage account. I invested $100k in 8 stocks in March of 2019 during the Covid crash. Sold some and rebought during dips. Mostly dumb luck I guess.
-another $200k in a simple Ira. Mutual funds.
-$550k in my business account. I owe 90k in taxes out of this.
-$290k in a cd with money from my business account.
-$270k in high yield savings account CIT.
-$272k in another high yield savings Citizens access.


So my problem is what to do next. I want to continue the exponential success but I’m kind of getting overwhelmed with where I should go next. I’m terrified of losing what I’ve made. Part of me wants to keep buying and holding stocks long term with my $550k in the brokerage account bc honestly it’s making loads at the moment. Another part of me wants to sell all stocks and invest in mutual funds or index funds until some other major crash. I don’t have the time to learn about stock investing so I just try to buy on bad news…. Thoughts?? what would you do in my position given my limited investing knowledge
This is bogleheads. I’d invest any new money in a balanced portfolio of stock and bond index funds, with a bond allocation designed to keep you calm during market volatility. Depending on tax implications, you could either hold onto your single stocks in the taxable account, or slowly sell them down. At your income level, if you invest a large amount yearly, you’ll be mostly indexed in a few years anyway.

I wouldn’t wait to time the market — anyway, your next set of idiosyncratic stock picks may not perform well. With your income just keep steadily investing, and you’ll not need to think about money much again in a few years.
PoppyA wrote: Wed Oct 30, 2024 5:20 am Well done!

A couple questions:

Do you have access to any tax deferred accounts via your business?

Have you thought about setting an asset allocation in your mind? Friend, over the course of your life stocks will tank & stocks will explode. You need to think about what combination of stocks/cash you can sleep with at night. Look at the wiki here to learn more about this subject.

After that it becomes about making consistent deposits into your accounts and keeping your asset allocation where you like it based on what season of life you are in.

Best wishes.
YeahBuddy wrote: Wed Oct 30, 2024 5:40 am Congrats! I wish I could start my own business. Just don't know what business or how to do it. Seems like a steep learning curve.

If I were you, I would read about the Boglehead lazy 3 fund portfolio. I have linked it below. Just set it and forget it. I would then enjoy some of that money. You're doing very well and no need to stress anymore.


viewtopic.php?t=88005

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

https://www.bogleheads.org/wiki/Lazy_portfolios
sailaway wrote: Wed Oct 30, 2024 5:48 am I just buy index funds and leave them. We can earn much more consistently by focusing on paid work than hoping to time the market. The we have plenty to invest in the dips, although we also invest on the highs. Just whenever we have the funds. I don't know how much is spending versus investing bogleheads style, but we never earned $500k and had a similar net worth by the time DH was 40.

We found an investment policy statement reassuring through the ups and downs. Should I try to time? No, just follow the plan. This includes rebalancing to our desired AA on a schedule rather than in reaction to news.

I also take advantage of tax sheltered accounts. When I was last self employed, I created a 401k for this purpose.
Watty wrote: Wed Oct 30, 2024 6:06 am
DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am So my problem is what to do next.
Talk to your accountant ASAP about getting tax deferred retirement accounts setup before the end of the year so you can take advantage of them in 2024.

There is also a getting started wiki for investing if you have not seen it.

https://www.bogleheads.org/wiki/Getting_started
DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am I don’t have the time to learn about stock investing so I just try to buy on bad news…. Thoughts?? what would you do in my position given my limited investing knowledge


1) Max out all tax advantaged accounts, likely over $50K a year since you own a business.

2) Invest in a simple three fund portfolio.
https://www.bogleheads.org/wiki/Three-fund_portfolio
https://www.bogleheads.org/wiki/Tax-eff ... _placement

3) Spend your available time focused on your business since it is so much more profitable than systematic stock picking would be. A mutual fund manager or financial advisor would be in the investing hall of fame if they could consistently pick stocks which beat index funds but 1% over the long term, and over the next 40 years that would also make a huge difference with the way that investments compound.

You need to keep in mind that you have about $2 million so stock picking and getting an extra 1% a year is only $20K. That is nice enough but with it sounds a lot easier to make $20K in your business than stock picking.

Expecting to stock pick and beat the indexes is optimistic, expecting to best them by 10% is not realistic. Expecting to beat them without spending LOTS of time figuring out which stocks to buy is also not realistic, people working on Wall Street often work 60 to 80 hour weeks and cannot beat the indexes.

4) Based on your user name you must be a Dave Ramsey fan. He is not popular here. He has helped a lot of people get out of debt but his investing advice is unrealistic and dangerous and he promotes high cost investments so once you get out of debt it is time to leave him behind.
pseudoiterative wrote: Wed Oct 30, 2024 6:16 am
DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am So my problem is what to do next. I want to continue the exponential success but I’m kind of getting overwhelmed with where I should go next. I’m terrified of losing what I’ve made. Part of me wants to keep buying and holding stocks long term with my $550k in the brokerage account bc honestly it’s making loads at the moment. Another part of me wants to sell all stocks and invest in mutual funds or index funds until some other major crash.
One idea is to think through what you plan to use this wealth for, and work backwards from there. What's your goal?

Suppose you plan to buy a new house for about $1.5m in 2 years, and you don't want to delay these plans if there is stock market volatility. In this case it might be a good idea to park enough funds for this purchase in a low risk asset like your high yield savings accounts. An investment approach that might not align with this goal is being 100% invested in the stock market -- if market prices crash and do not recover by the time you need to raise cash for your purchase, that might put you in a position where your plans are unavoidably delayed, or stock needs to be sold at a large loss to raise enough cash.

Suppose instead you want to invest your wealth towards retirement at age 60, and have no plains to need a large amount of cash in the next decade or so. In this case you are in a position where you could accept much more risk if you wish to allocate a larger portion of your wealth to the stock market -- if stock market prices were to crash next year, because your plans do not require any large cash withdrawals that would otherwise force you to sell stock at a loss while market prices were depressed, you could stay invested in the market and ride out the volatility.

If you can pin down your goal, that can inform how much risk you are willing to accept, and could also help avoid getting too flustered by financial news and market volatility -- if the stock market is down this week, but within the range of what your long term plan can tolerate, what's to be concerned about?


one way to structure this type of thing is as an investment policy statement: https://www.bogleheads.org/wiki/Investm ... _statement

that might be a bit too formal place to start, but worth a read
HomeStretch wrote: Wed Oct 30, 2024 6:22 am Congratulations, you have made impressive progress in 10 years in terms of increasing assets/income and eliminating debt. You have risk as a business owner and holding $559k in 8 stocks. Consider coming up with a plan to balance that by:

1. Investing the $542k in the high yield savings accounts into low-ER diversified equity/bond funds according to your desired asset allocation.

2. At a minimum, stop reinvesting dividends in your Taxable brokerage account. Invest the dividends in a U.S. total stock market fund.

3. Determine how much $ you need to retain for business capital and whether you should distribute the excess to invest for retirement as per #1.

Also do some of the suggested BH wiki reading to educate yourself on investing.
J295 wrote: Wed Oct 30, 2024 6:47 am Address feeling “terrified” to lose what you have. You have a lengthy financial life in front of you and the equity markets over the next four decades in all probability will have some (very) rough patches. Can you buckle up for some chaos and a 50%+ equity drop sometime?

Create an IPS. See wiki. We have one. Three sentences. Simple and valuable.
muffins14 wrote: Wed Oct 30, 2024 6:51 am
DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am -Cliff notes: started a company in November 2014.
-Current Age 41
-ZERO DEBT in personal life or business!!!
-INCOME: over $500k/yr and increasing yearly
-10 yrs later I have a paid off house $750k.
-$550k in brokerage account. I invested $100k in 8 stocks in March of 2019 during the Covid crash. Sold some and rebought during dips. Mostly dumb luck I guess.
-another $200k in a simple Ira. Mutual funds.
-$550k in my business account. I owe 90k in taxes out of this.
-$290k in a cd with money from my business account.
-$270k in high yield savings account CIT.
-$272k in another high yield savings Citizens access.


So my problem is what to do next. I want to continue the exponential success but I’m kind of getting overwhelmed with where I should go next. I’m terrified of losing what I’ve made. Part of me wants to keep buying and holding stocks long term with my $550k in the brokerage account bc honestly it’s making loads at the moment. Another part of me wants to sell all stocks and invest in mutual funds or index funds until some other major crash. I don’t have the time to learn about stock investing so I just try to buy on bad news…. Thoughts?? what would you do in my position given my limited investing knowledge

VTI, VXUS, VTEB

You probably have too much cash
CyclingDuo wrote: Wed Oct 30, 2024 8:43 am
DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am -Cliff notes: started a company in November 2014.
-Current Age 41
-ZERO DEBT in personal life or business!!!
-INCOME: over $500k/yr and increasing yearly
-10 yrs later I have a paid off house $750k.
-$550k in brokerage account. I invested $100k in 8 stocks in March of 2019 during the Covid crash. Sold some and rebought during dips. Mostly dumb luck I guess.
-another $200k in a simple Ira. Mutual funds.
-$550k in my business account. I owe 90k in taxes out of this.
-$290k in a cd with money from my business account.
-$270k in high yield savings account CIT.
-$272k in another high yield savings Citizens access.


So my problem is what to do next. I want to continue the exponential success but I’m kind of getting overwhelmed with where I should go next. I’m terrified of losing what I’ve made. Part of me wants to keep buying and holding stocks long term with my $550k in the brokerage account bc honestly it’s making loads at the moment. Another part of me wants to sell all stocks and invest in mutual funds or index funds until some other major crash. I don’t have the time to learn about stock investing so I just try to buy on bad news…. Thoughts?? what would you do in my position given my limited investing knowledge
Congrats on increasing your income and getting out of debt! :beer

Small point, but the Covid crash was in March of 2020, not 2019. We are currently 4 years, and 7 months beyond that global market event.

As was brought up in your previous posts 10 years ago, Ramsey is indeed very good for helping households get out of debt which you have done. I'm not against his investing advice as Bogleheads have spent time distilling it down to a pretty simple formula and pointing out it is just another lazy portfolio in this thread: viewtopic.php?t=428329

If you want to see oodles of lazy portfolios, just look here: https://www.whitecoatinvestor.com/150-p ... han-yours/

In short, posters as well as an author over at Seeking Alpha took Ramsey's recommendation of 25% Growth and Income, 25% Growth, 25% Aggressive Growth, and 25% International to create a similar lazy portfolio via a low cost, index fund version - or rather a DIY Lazy Portfolio that is low cost and has no AUM fees associated with it.

The Seeking Alpha author article in the link above used Vanguard or Blackrock ETFs to get a lower cost Lazy Dave version...

Vanguard ETFs

VGK: 12.5% Vanguard European Stock Index Fund (ER .08)
VWO: 12.5% Vanguard Emerging Markets Stock Index Fund (ER .08)

VOO: 25% Vanguard 500 Index Fund (ER .01)
VYM: 25% Vanguard High Dividend Yield Index Fund (ER .08)
VBR: 25% Vanguard Small Cap Value Index Fund (ER .07)

Blackrock iShares ETFs

IXUS: 25% iShares Core MSCI Total International Stock (ER .07)
HDV: 25% iShares Core High Dividend ETF (ER .08)
IVV: 25% iShares Core S&P 500 ETF (ER .03)
IJS: 25% iShares S&P Small-Cap 600 Value ETF (ER .18)

In another thread here at Bogleheads, we distilled the Ramsey Portfolio and the performance of it down to just a two fund lazy portfolio: viewtopic.php?t=391896

VTI: 75% (Vanguard Total US Stock Market)
VXUS: 25% (Vanguard Total International Market)

A Lazy Portfolio is something you can stick with through thick and thin. Most of us here at Bogleheads would argue for keeping your costs low. Hiring an advisor who may charge an assets under management fee (AUM fee), and use mutual funds (or ETFs) that have higher expense ratios is what we would argue against in most cases because you could get the same for your yourself as a DIY investor, and at a lower cost by using a discount brokerage firm such as Schwab, Vanguard, or Fidelity by using the underlying lower cost index funds.

In your case, and as has been pointed out, you really should have a workplace tax deferred retirement plan for yourself. Although you have done well with the 8 stocks you purchased during the Covid dip, I agree with the other posters that going forward you should diversify with index funds to own the entire market. You still have plenty of years of accumulation ahead of you to take advantage of a low cost, lazy portfolio.

By age 40, one should have saved 3X their income in their investment accounts. So for you, 3 X $500K at age 40 for $1.5M would have been the suggested target in your investment accounts/savings using the benchmarks that Fidelity, JP Morgan, T.Rowe Price, etc. use along with their metrics of retiring around age 65-67 at one's FRA (full retirement age according to SS), and having a portfolio + SS in retirement for one's income.

Here are some of the guideline examples...

Fidelity wants you at 3X $500K for $1.5M by age 40
Image

JP Morgan wants you at $1.5M+ by age 40
Image

T.Rowe Price wants you at least to be at 2X $500 for $1M by age 40
Image

CyclingDuo
Sandtrap wrote: Wed Oct 30, 2024 9:42 am to op:
1
Focus on your business.
Maximize profit and profit margin
Minimize expenses while not compromising quality and professional service and customer focus
Don't leave any money on the table, run clean.
Minimize your operating eapital reserves/float
2
If you did not make a formal excellent business plan, do so now, then review and update very 3 years to keep your focus sharp and expansion clean and purposeful.
3
You can contact and consult with Vanguard VPAS customer rep to work with structuring your low cost index fund portfolio for a solit financial base now and a long term personal retirement strategy (which you need to do now), so that you can stay 200 percent focused on making the 100 dollars vs investing and saving the pennies. (as you are in business vs an employee with a fixed paycheck, you can do this all the more. right?

4
As far as the 3rd leg of your 3 legged stool (business, personal investing for retirement, diversification of incomes streams) (which dave ramsey supports for business peole as well).
Make this your 3rd job. work 24/7 right?

Read and do all of the below. Once you grasp the entirety of the forum wiki you will know as much or far more than most FA's and helpful wealth managers and private bankers and insurance annuaity salesman and brokerage consultants and others that want "to help you with your money" for a fee, etc. Right?

Okay: You can do this from beginning to the end. Take several years to become an expert at it, like another business. It is easy....but it is not.
j
GETTING STARTED
https://www.bogleheads.org/wiki/Getting_started
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
Bogle Philosophy
https://www.bogleheads.org/wiki/Bogleh ... hilosophy
Here are links to the wiki's "Getting Started" and "Investing Startup Kit" pages:
https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Bogleh ... rt-up_kit
Define General Investment Goals and Objectives (what is your plan?)
https://www.bogleheads.org/wiki/Invest ... statement
IPS Statement Worksheet PDF at Morningstar
http://news.morningstar.com/pdfs/inves ... pr2016.pdf
Outline of Investing
https://www.bogleheads.org/wiki/Outline_of_investing
Outline of Financial Planning (with links)
https://www.bogleheads.org/wiki/Outlin ... _planning
Funding Priority (what do I do first?)
https://www.bogleheads.org/wiki/Priori ... vestments
Tax Efficient Fund Placement
https://www.bogleheads.org/wiki/Tax-ef ... _placement
Asset allocation in multiple accounts
https://www.bogleheads.org/wiki/Asset ... accounts
Risk Tolerance (what is your "sleep factor"?)
https://www.bogleheads.org/wiki/Risk_tolerance
Asset Allocation (what is right for you?)
https://www.bogleheads.org/wiki/Asset_allocation
Emergency Fund
https://www.bogleheads.org/wiki/Emergency_fund
Bogle 3 Fund Portfolio Basics and Beyond
https://www.bogleheads.org/wiki/Three- ... _portfolio

**If you wanted to FIRE right now...you would not be "rich" as you state.
So....beware complacency. High cash flow does not beget "wealth". So, focus on long term wealth. Establish, much like a business plan, a personal projection plan to FIRE. So, you'll be able to qualify for let's say a 20 year plan or 15, etc to FIRE. Even if you don't, they can be benchmarks you use for "personal wealth reality checks". See?

Use any of these portfolio projection tools for your needs.
Engaging Data Site:
https://engaging-data.com/early-retirem ... and-tools/
TestFolio Website:
https://testfol.io/
Portfolio Visualizer site:
https://www.portfoliovisualizer.com/bac ... allocation

Complex is not better, simplicity is>
In your portfolio:
Eliminate or minimize fund overlaps, redundancies, and funds that are less than 5 percent of total (don't move the needle).
Read:
TAYLOR LARIMORE ON “SIMPLICTY”
https://www.bogleheads.org/forum/viewt ... p?t=156505

Suggested Reading List
https://www.bogleheads.org/RecommendedReading.php
Forum Library of Investing Advice with links
https://www.bogleheads.org/wiki/Main_Page

Outstanding write up on the 64/40 allocation by Bernstein.
http://web.archive.org/web/20061214061 ... in6040.pdf
R. Ferri on Bernstein's 60/40
http://www.etf.com/sections/index-inve ... nopaging=1

Free Reading: "If You Can" by Bernstein
https://www.google.com/url?sa=t&rct=j& ... -SB3S580I5

to op.. FWIW: at your age, I had only been 10 years into running 3 businesses. I was broke or felt broke. But, cash flow was high and expenses were high as well and the businesses were growing. I put off buying a home and having that debt and reinvested everything I had into the businesses. Had I known about the "bogleheads 3 legged stool approach for business owners, in concept", I would have embraced it as well for a long term goal of earning and aquiring "wealth". Fortunately, I was able to "FIRE" at age 58.

Congratulations on your successes: everything is in your hands at this point, take the ball....run.
j
gips wrote: Wed Oct 30, 2024 11:25 am
Sandtrap wrote: Wed Oct 30, 2024 9:42 am to op:
1
Focus on your business.
Maximize profit and profit margin
Minimize expenses while not compromising quality and professional service and customer focus
Don't leave any money on the table, run clean.
Minimize your operating eapital reserves/float
2
If you did not make a formal excellent business plan, do so now, then review and update very 3 years to keep your focus sharp and expansion clean and purposeful.
As someone who was a partner in one startup and a co-founder of another, both ending with significant equity events, I’m not sure how one provides cookie cutter advice to a business owner. It’s common practice to sacrifice net margin for growth and without knowing an awful lot about OP’s business (product, customers, competition, equity event goals, scalability, etc) it’s impossible to make a recommendation around the right mix of profitability vs growth.

Additionally, the OPs business plan should be updated yearly as it provides conscious reflection for the coming year on growth opportunities, new products and services, partnership opportunities, projected income and expenses, new hires and progress against end state goals.

OP, if your end state goal is selling your business, it’s important to understand ebidta multiples for similar businesses and set goals for the sale price. For example, ours was $50mm revenue in five years. We didn’t achieve that goal but after five years, we had a nice ebidta multiple offer and decided to cash out.

Congrats on your success to date and good luck going forward!
Sandtrap wrote: Wed Oct 30, 2024 11:32 am
gips wrote: Wed Oct 30, 2024 11:25 am

As someone who was a partner in one startup and a co-founder of another, both ending with significant equity events, I’m not sure how one provides cookie cutter advice to a business owner. It’s common practice to sacrifice net margin for growth and without knowing an awful lot about OP’s business (product, customers, competition, equity event goals, scalability, etc) it’s impossible to make a recommendation around the right mix of profitability vs growth.

Additionally, the OPs business plan should be updated yearly as it provides conscious reflection for the coming year on growth opportunities, new products and services, partnership opportunities, projected income and expenses, new hires and progress against end state goals.

OP, if your end state goal is selling your business, it’s important to understand ebidta multiples for similar businesses and set goals for the sale price. For example, ours was $50mm revenue in five years. We didn’t achieve that goal but after five years, we had a nice ebidta multiple offer and decided to cash out.

Congrats on your success to date and good luck going forward!
great points from professional and personal experience
well said
congratulations on your substantial successes as well

me ke aloha
j
I spent about an hour typing out responses to each of you, only to have my phone browser crash…. SMDH

Amazing responses tho and It may take me another 10 yrs to go through all of the links and ideas.

But to clarify a few things. I do have a tax deferred SIMPLE IRA set up with my business. I also like the idea of simplicity and just having 3-4 mutual funds. Are mutual funds fdic insured or can you just have millions of dollars in there? i know I can google that but that explains why I have 2 High yield savings accounts and a CD. Trying to mitigate some risk.

Also should have clarified that one of my goal is to step back from the business at age 45 and let my GM run things while I focus on the pursuit of happiness, exploration, and experience. I can double his pay and still make a great income… My mental health has taken many small hits with each employee, client or vendor I have to deal with. Although my net worth is doing great, I need to ensure I have an extraordinary life to go along with my money or it was all for nothing. My wife and I have no kids so I’m thinking of traveling the world for a year or buying a home in another country…
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Sandtrap
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Re: First post in 10 yrs. Somehow I got rich…

Post by Sandtrap »

Also should have clarified that one of my goal is to step back from the business at age 45 and let my GM run things while I focus on the pursuit of happiness, exploration, and experience. I can double his pay and still make a great income… My mental health has taken many small hits with each employee, client or vendor I have to deal with. Although my net worth is doing great, I need to ensure I have an extraordinary life to go along with my money or it was all for nothing. My wife and I have no kids so I’m thinking of traveling the world for a year or buying a home in another country…
This is really great to hear.
For many successful business people, there's a point where they "become" the business. It is like their offspring. They become so good at it and keen in instinct that there is nothing else and it grows exponentially. But, it's a codependent relationship with room for nothing else.
Yes. the very things about one's person, personality type MBTI, etc, that make for a successful business leader and entrepreneur are also what can create an imbalance and unhealthy "self". I had many many business mentors that were so outstanding and helpful for me, since I was little. One owned an entire city block of condo high rises and apartment buildings. He started from poverty. At age 70, he drove a white pickup truck, met with fellow retired (they never retire) business friends at McDonalds for free coffee refills, and browsed the stock market for fun. He sounded a lot like the founder of walmart, sam walton. While these people found so much financial success, life sullfillment, and apparent happiness in their achievements, they also had families that fell apart, beneficiearies with inter family lawsuits, and so much more. At the core, they were all simple people from another generation (of heroes).
So, it's good that you are keeping a great perspective.
Travel and have a healthy lifestyle while you can. Enjoy with DW while you can. Family when you can. Make memories.
j
Wiki Bogleheads Wiki: Everything You Need to Know
toblerone
Posts: 301
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Re: First post in 10 yrs. Somehow I got rich…

Post by toblerone »

DaveRamseyfan wrote: Wed Oct 30, 2024 9:29 pm Are mutual funds fdic insured or can you just have millions of dollars in there? i know I can google that but that explains why I have 2 High yield savings accounts and a CD. Trying to mitigate some risk.
Vanguard (for example) is SIPC insured. It is brokerage insurance, and similar to the FDIC insurance that banks have.
But the big Boglehead 3 (Vanguard, Fidelity, Schwab) are essentially "too big to fail" so it's not something you should be worried about, unless you are investing with small, sketchy firms.
Topic Author
DaveRamseyfan
Posts: 8
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Re: First post in 10 yrs. Somehow I got rich…

Post by DaveRamseyfan »

Sandtrap wrote: Wed Oct 30, 2024 9:52 pm
Also should have clarified that one of my goal is to step back from the business at age 45 and let my GM run things while I focus on the pursuit of happiness, exploration, and experience. I can double his pay and still make a great income… My mental health has taken many small hits with each employee, client or vendor I have to deal with. Although my net worth is doing great, I need to ensure I have an extraordinary life to go along with my money or it was all for nothing. My wife and I have no kids so I’m thinking of traveling the world for a year or buying a home in another country…
This is really great to hear.
For many successful business people, there's a point where they "become" the business. It is like their offspring. They become so good at it and keen in instinct that there is nothing else and it grows exponentially. But, it's a codependent relationship with room for nothing else.
Yes. the very things about one's person, personality type MBTI, etc, that make for a successful business leader and entrepreneur are also what can create an imbalance and unhealthy "self". I had many many business mentors that were so outstanding and helpful for me, since I was little. One owned an entire city block of condo high rises and apartment buildings. He started from poverty. At age 70, he drove a white pickup truck, met with fellow retired (they never retire) business friends at McDonalds for free coffee refills, and browsed the stock market for fun. He sounded a lot like the founder of walmart, sam walton. While these people found so much financial success, life sullfillment, and apparent happiness in their achievements, they also had families that fell apart, beneficiearies with inter family lawsuits, and so much more. At the core, they were all simple people from another generation (of heroes).
So, it's good that you are keeping a great perspective.
Travel and have a healthy lifestyle while you can. Enjoy with DW while you can. Family when you can. Make memories.
j
This is 100% the case with me. My business has become me and I don’t really have many friends or family that I Hang out with much.
The only way I can justify it is if I can get out early, Help some
Other people make money, and build a big enough snowball to keep me going throughout my life. The day I step away is the day my phone stops ringing almost altogether.
Topic Author
DaveRamseyfan
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Re: First post in 10 yrs. Somehow I got rich…

Post by DaveRamseyfan »

toblerone wrote: Wed Oct 30, 2024 9:53 pm
DaveRamseyfan wrote: Wed Oct 30, 2024 9:29 pm Are mutual funds fdic insured or can you just have millions of dollars in there? i know I can google that but that explains why I have 2 High yield savings accounts and a CD. Trying to mitigate some risk.
Vanguard (for example) is SIPC insured. It is brokerage insurance, and similar to the FDIC insurance that banks have.
But the big Boglehead 3 (Vanguard, Fidelity, Schwab) are essentially "too big to fail" so it's not something you should be worried about, unless you are investing with small, sketchy firms.
I was just reading about sipc. Looks like that only protects you up to $500,000. Where do really wealthy people keep their money? Or is it such a small chance the institutions will fail that it’s not even a consideration?
Or should I have $500k at multiple institutions?
toblerone
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Re: First post in 10 yrs. Somehow I got rich…

Post by toblerone »

DaveRamseyfan wrote: Wed Oct 30, 2024 10:42 pm I was just reading about sipc. Looks like that only protects you up to $500,000. Where do really wealthy people keep their money? Or is it such a small chance the institutions will fail that it’s not even a consideration?
Or should I have $500k at multiple institutions?
It's not even a consideration. Vanguard has over $9 trillion under management.
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whodidntante
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Re: First post in 10 yrs. Somehow I got rich…

Post by whodidntante »

IDK. America is a pretty rich country. Sometimes I find the amount of money people have humbling.

You have a comical amount of cash and CDs compared to your net worth. Consider learning how to invest. This is a good forum for the basics, and the basics will make you a better investor than most people.

You have quite a bit of money, but it seems like it's mainly due to excess income. 500k income is something most will never achieve, so good job on that. Learning how to invest and learning why it can make sense to take good risks would be a good step now.

Congrats on getting lucky with your single stocks. Do whatever you like, but the same meteoric rise you experienced can turn into a dramatic fall, and you won't have time to get out. Single stocks are not a good risk, unless you are outlier level effective at choosing them and managing your stock portfolio.
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Re: First post in 10 yrs. Somehow I got rich…

Post by steadyosmosis »

DaveRamseyfan wrote: Wed Oct 30, 2024 12:33 am Thoughts?? what would you do in my position given my limited investing knowledge
I have gained more investing knowledge than I ever dreamed of ... by reading bogleheads.org.
Early-retired ... portfolio AA 50/50 ... (46% tIRA, 33% RIRA, 16% taxable, 5% HSA) ... (16% VTI, 16% SCHB, 13% SCHF, 5% VITSX, 50% US Treasuries).
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Lawrence of Suburbia
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Re: First post in 10 yrs. Somehow I got rich…

Post by Lawrence of Suburbia »

Vanguard Target date fund, for whatever year you wish to retire. K.I.S.S.
VTTVX/VWINX/DODWX/TIAA Traditional
smitcat
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Re: First post in 10 yrs. Somehow I got rich…

Post by smitcat »

DaveRamseyfan wrote: Wed Oct 30, 2024 10:40 pm
Sandtrap wrote: Wed Oct 30, 2024 9:52 pm
This is really great to hear.
For many successful business people, there's a point where they "become" the business. It is like their offspring. They become so good at it and keen in instinct that there is nothing else and it grows exponentially. But, it's a codependent relationship with room for nothing else.
Yes. the very things about one's person, personality type MBTI, etc, that make for a successful business leader and entrepreneur are also what can create an imbalance and unhealthy "self". I had many many business mentors that were so outstanding and helpful for me, since I was little. One owned an entire city block of condo high rises and apartment buildings. He started from poverty. At age 70, he drove a white pickup truck, met with fellow retired (they never retire) business friends at McDonalds for free coffee refills, and browsed the stock market for fun. He sounded a lot like the founder of walmart, sam walton. While these people found so much financial success, life sullfillment, and apparent happiness in their achievements, they also had families that fell apart, beneficiearies with inter family lawsuits, and so much more. At the core, they were all simple people from another generation (of heroes).
So, it's good that you are keeping a great perspective.
Travel and have a healthy lifestyle while you can. Enjoy with DW while you can. Family when you can. Make memories.
j
This is 100% the case with me. My business has become me and I don’t really have many friends or family that I Hang out with much.
The only way I can justify it is if I can get out early, Help some
Other people make money, and build a big enough snowball to keep me going throughout my life. The day I step away is the day my phone stops ringing almost altogether.
I believe one of the key things you need is a clear and workable exit strategy - you may be there already, but still need an executable plan.
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