What would you do with this portfolio? 5mil at 36 (but dumb)

[Zoomie]

Please explain like I'm 10. This was all just kind of dropped on me in the last 4 years.
Haven't had a job in 3 years, just keep converting BTC to cash and here I am.

----------------

Spending ~80k/year
Tax filing status: Single
Age: 36
State of residence: MT
Emergency fund: 6 months (atleast)
Debt: None

----------------

127k robinhood stocks
320k robinhood cash 4.5%

230k vfiax on vanguard
290k vigax on vanguard
20k vti on vanguard

790k with my financial advisor (LPL)
66% US stocks
21% Bonds

50k roth

2.3m in btc

1 commercial building (~600k)

currently have 4 houses I am the mortgagee of (~700k)

Own outright 2 houses (~270k)
My own and a fixer upper

-----------------------

So, what would you do if it was you?

[breakfastinbed]

I couldn't find it on a quick search, but there's a long thread out there about someone in a similar boat to you - significant wealth in BTC and not sure what to do next. Hopefully someone has the link.

At a 1.6% withdraw rate (for your entire net worth) you are likely set. The goal may be to convert your assets into something more liquid/stable.

This will likely be mostly equities, but you could actually probably get away with some bonds if you really like due potentially lower taxable income.

If you want to avoid complexity, the entire original purpose of the Boglehead two fund portfolio was for just that - something simple. 70-80% diversified equities (total US or international market), 20-30% in fixed income (would recommend intermediate-term treasuries or intermediate-term muni bonds).

[doobiedoo]

.. This was all just kind of dropped on me in the last 4 years.
Haven't had a job in 3 years, just keep converting BTC to cash and here I am.
----------------
Spending ~80k/year
Tax filing status: Single
Age: 36
State of residence: MT
Emergency fund: 6 months (atleast)
Debt: None
----------------
127k robinhood stocks
320k robinhood cash 4.5%

230k vfiax on vanguard
290k vigax on vanguard
20k vti on vanguard

790k with my financial advisor (LPL)
66% US stocks
21% Bonds

50k roth

2.3m in btc

1 commercial building (~600k)

currently have 4 houses I am the mortgagee of (~700k)[/color]
Own outright 2 houses (~270k)
My own and a fixer upper
-----------------------
So, what would you do if it was you?

You have plenty of money. In your shoes I would say the only real risk is the debt [the mortgages].
I would get out of debt! Get rid of the mortgages.

You certainly don't NEED 4 houses.
You don't say if you are renting some of them or remodeling them with intent to sell.
Maybe sell the one you like the least and pay off the mortgage of the other(s).

With 4 houses, a commercial property and lots of investments,
I don't think you have time to work AND manage your investments AND enjoy life.
So in your shoes, I wouldn't work either.

You appear to have 13% in individual stocks [66% of 790k LPL + 127k RobinHood]. Total net worth of ~$5 million.
I'm ok with that if you're ok with it.

[Zoomie]

I couldn't find it on a quick search, but there's a long thread out there about someone in a similar boat to you - significant wealth in BTC and not sure what to do next. Hopefully someone has the link.

That would be great!

If you want to avoid complexity, the entire original purpose of the Boglehead two fund portfolio was for just that - something simple. 70-80% diversified equities (total US or international market), 20-30% in fixed income (would recommend intermediate-term treasuries or intermediate-term muni bonds).

Thanks! I'll be googleing those words to figure them out. I will be moving more BTC this year to get to a more stable balance, I found about 1.2m in some old computers just yesterday which helped get me the energy to make a post on here.

I would get out of debt! Get rid of the mortgages.

You certainly don't NEED 4 houses.

I actually gave out the loans on those houses, it ends up being about 3.3k a month for on average 16 years or so. Should be about 700k after they get them paid off. One of them is my sister's, I'd like to give her the remainder of the house since it's pretty cheap (35k), not sure how yet but either my lawyer or adviser should be able to tell me.

With 4 houses, a commercial property and lots of investments,
I don't think you have time to work AND manage your investments AND enjoy life.
So in your shoes, I wouldn't work either.

You appear to have 13% in individual stocks [66% of 790k LPL + 127k RobinHood]. Total net worth of ~$5 million.
I'm ok with that if you're ok with it.

Thanks for the input. Really just want to make sure I don't count my chickens before they hatch.

[Caleb4387]

Please explain like I'm 10. This was all just kind of dropped on me in the last 4 years.
Haven't had a job in 3 years, just keep converting BTC to cash and here I am.

----------------

Spending ~80k/year
Tax filing status: Single
Age: 36
State of residence: MT
Emergency fund: 6 months (atleast)
Debt: None

----------------

127k robinhood stocks
320k robinhood cash 4.5%

230k vfiax on vanguard
290k vigax on vanguard
20k vti on vanguard

790k with my financial advisor (LPL)
66% US stocks
21% Bonds

50k roth

2.3m in btc

1 commercial building (~600k)

currently have 4 houses I am the mortgagee of (~700k)

Own outright 2 houses (~270k)
My own and a fixer upper

-----------------------

So, what would you do if it was you?

Turn 1.3 Million of BTC into taxable so you have something solid to live one. Sell the other million and buy back in during the dip cause you know what it gonna do.

[Boglelicious123]

Congrats! It looks like you’ve basically “won the game” so you don’t have to play anymore. If it was me, I would sell 90% of that BTC immediately. Convert all your money into a simple 2 fund portfolio. Something like 80% VT, 20% BND. Keep that 10% of your BTC in BTC. Then go live your life! You’ll never have to worry about $$$ if you are a reasonable person

And you’re on Bogleheads so you are reasonable!

[AB609]

Did you inherit these assets? Do you want to be in the real estate business? What sort of interest rate are you getting on the houses you hold the loans on? It looks like you have the opportunity to be set for life but I would want to de-risk your holdings by getting out of the real estate and bitcoin business.

[er999]

Personally, I’d switch to an all index fund portfolio, even if it meant paying taxes, and think how I want to spend my remaining time without finances being the number one constraint in life.

I’d suggest reading Bill Bernstein’s 4 pillars book. If you don’t want to do it yourself consider hiring a Vanguard advisor.

At 36 years old with $80k spend 5 million is quite good. I personally would be more worried about losing it rather than trying to turn it into 10 or 15 million quickly. 5 million can’t provide the Jackson Hole billionaire lifestyle but would be a quite comfortable level of spending.

If you want to spend your time doing real estate keep the rentals, but also could consider selling. The good thing about index investing is it takes about 1 hour a year. 3% / year spend would be considered conservative spending rate. If you need maybe 100k - 120k / year spend (to account for taxes and health insurance) that implies a portfolio of 3.3 - 4 million. You might be close to that after paying taxes to change to all index funds.

[Zoomie]

Did you inherit these assets?

I mined btc when I was young and have been converting it to usd for about 5 years. I bought all the assets from that money,

Do you want to be in the real estate business? What sort of interest rate are you getting on the houses you hold the loans on?

I dont know if I want to be in the real estate business. I mostly got these houses for people that couldn't get loans from a bank, but I trust them VERRRRRRRRY much, so the risk is very low.

$1300/mo (348 mo left) 4.92%
$300/mo (92 mo left) 2.5%
$860/mo (320 mo left) 2.5%
$515/mo (? mo left) 2.5%

It looks like you have the opportunity to be set for life but I would want to de-risk your holdings by getting out of the real estate and bitcoin business.

Is real estate a riskier asset? Would stocks be better than real estate?

Congrats! It looks like you’ve basically “won the game” so you don’t have to play anymore. If it was me, I would sell 90% of that BTC immediately. Convert all your money into a simple 2 fund portfolio. Something like 80% VT, 20% BND. Keep that 10% of your BTC in BTC. Then go live your life! You’ll never have to worry about $$$ if you are a reasonable person

And you’re on Bogleheads so you are reasonable!

Thanks! I will learn about a portfolio like that!

Personally, I’d switch to an all index fund portfolio, even if it meant paying taxes, and think how I want to spend my remaining time without finances being the number one constraint in life.

I’d suggest reading Bill Bernstein’s 4 pillars book. If you don’t want to do it yourself consider hiring a Vanguard advisor.

At 36 years old with $80k spend 5 million is quite good. I personally would be more worried about losing it rather than trying to turn it into 10 or 15 million quickly. 5 million can’t provide the Jackson Hole billionaire lifestyle but would be a quite comfortable level of spending.

If you want to spend your time doing real estate keep the rentals, but also could consider selling. The good thing about index investing is it takes about 1 hour a year. 3% / year spend would be considered conservative spending rate. If you need maybe 100k - 120k / year spend (to account for taxes and health insurance) that implies a portfolio of 3.3 - 4 million. You might be close to that after paying taxes to change to all index funds.

Thanks! I felt like I was right on the cusp of having a perfectly stable lifestyle with just a few small tweaks so hearing this is great! I'm not trying to grow it into Bugatti money, just want to be able to chill.

[AB609]

Did you inherit these assets?

I mined btc when I was young and have been converting it to usd for about 5 years. I bought all the assets from that money,

Do you want to be in the real estate business? What sort of interest rate are you getting on the houses you hold the loans on?

I dont know if I want to be in the real estate business. I mostly got these houses for people that couldn't get loans from a bank, but I trust them VERRRRRRRRY much, so the risk is very low.

$1300/mo (348 mo left) 4.92%
$300/mo (92 mo left) 2.5%
$860/mo (320 mo left) 2.5%
$515/mo (? mo left) 2.5%

It looks like you have the opportunity to be set for life but I would want to de-risk your holdings by getting out of the real estate and bitcoin business.

Is real estate a riskier asset? Would stocks be better than real estate?

Congrats! It looks like you’ve basically “won the game” so you don’t have to play anymore. If it was me, I would sell 90% of that BTC immediately. Convert all your money into a simple 2 fund portfolio. Something like 80% VT, 20% BND. Keep that 10% of your BTC in BTC. Then go live your life! You’ll never have to worry about $$$ if you are a reasonable person

And you’re on Bogleheads so you are reasonable!

Thanks! I will learn about a portfolio like that!

Personally, I’d switch to an all index fund portfolio, even if it meant paying taxes, and think how I want to spend my remaining time without finances being the number one constraint in life.

I’d suggest reading Bill Bernstein’s 4 pillars book. If you don’t want to do it yourself consider hiring a Vanguard advisor.

At 36 years old with $80k spend 5 million is quite good. I personally would be more worried about losing it rather than trying to turn it into 10 or 15 million quickly. 5 million can’t provide the Jackson Hole billionaire lifestyle but would be a quite comfortable level of spending.

If you want to spend your time doing real estate keep the rentals, but also could consider selling. The good thing about index investing is it takes about 1 hour a year. 3% / year spend would be considered conservative spending rate. If you need maybe 100k - 120k / year spend (to account for taxes and health insurance) that implies a portfolio of 3.3 - 4 million. You might be close to that after paying taxes to change to all index funds.

Thanks! I felt like I was right on the cusp of having a perfectly stable lifestyle with just a few small tweaks so hearing this is great! I'm not trying to grow it into Bugatti money, just want to be able to chill.

The mortgages you hold are more risky because you apparently have sub-prime borrowers and you are concentrated in one town (I'm guessing). Your rates are also well below market rates. That said, it's less than 20% of your portfolio and leveraging your investment savvy to help family and friends is admirable. You be cautious about it.

On these mortgages, was the IRS Applicable Federal Rate considered when the loans were arranged? If you are below the AFR, the loan might be considered a gift with tax implications coming into play.