How To Manage/Invest 2 Million Usd (balanced fund, lawyer, Fidelity, trust)

[newt]

I didn't say you couldn't earn more. I'm just thinking that's about the safest thing someone could possibly do. Also, the original poster said, "I don't spend that much I just spend on things that I need."

[pzrOrange]

Originally Posted by mathjak107

to bad the management company wont make up the short fall in rent when divorce,illness,and job loss has a good tenant turn bad on you.

some management companies also insure tennants for up to 6 months!

but OK, fair enough. given the fact that there is no mortgage owed on the apartment (you did buy them with your $2M, right?), its not like you are on point to suffer a financial loss by paying bank out of your own pocket.

you have multiple apartments that give you a steady stream of income every month, and even if one fails to pay few times, its not a very big deal. there are investment risks everywhere you'd go. but the upside is still HUGE.

the land is yours, the equity is yours, the income is yours for the rest of your life. hell, you can remodel some units and jack up the rent if you want to. as long as the location is hot, there will be virtually unlimited demand. and if some time down the road you want to sell it and cash out - go for it, because you can!

[PureHapa]

Here's a site where you can find a fee-based financial planner:

NAPFA

I used a planner who was recommended to me by my CPA a while back, and she is a fee-based, not commission-based planner/advisor. I was very happy with her recommendations. I spent about $2,000 for a thorough consultation and recommendations written in a bound report.

Since you are young, anything you do today can be changed from time to time as you learn and get more experienced in managing your money. So my suggestion is to go to a fee-based planner and at this time, not putting your money into anything permanent like an annuity.

[mathjak107]

as i posted a few times how a planner gets paid really is a moot point.

there are positve and negatives to all of the ways.

a recent study i heard on bloomberg showed by over 2:1 folks dont want to pay hourly fees for advise. they rather spend the money in commissions or fee based on a percentage of assets when it comes to financial planning .

they could be throwing good money away but such is human nature.

the biggest issue with fee only by the folks who did it and responded to the study was folks thought they generally shoot out advice thats far to conservative and not always the best match for a persons wants and needs because they have no incentive to grow your portfolio at heart.

some fee only planners are fee only because they lack the necessary requirements required to sell certain products or else they would.

the fee based planners are another issue too, they get paid via a percentage of your assets even though they may or may not sell products themselves.

while they have a vested interest in the growth of your portfolio they may not always give unbiased advice either. if you ask if you should pay off your house with money from your account they may tell you not to since your account balance effects their fee despite the fact you really should.. fee based can get commissions thru 12b-1 fees in funds so there is no upfront commission. the truth is it would be cheaper if there were compared to paying it internally and hidden from view every year.



the commissioned guy may sell you poor products based on whats best for him ,not you. your not a client your a customer.
on the other hand he has no vested interest in putting you in overley aggressive investments like a fee based planner since he gets paid the same no matter how you do.

their are pitfalls with all 3 types.


there is a whole lot more to financial planning then investments and products. . its very possible the guy who is commissioned has the best overall knowledge of what you require from estate planning to tax planning so i wouldnt rule him out either.

its not an easy quest to find someone and how they get paid may not be the best rule of thumb to follow.

i always see go fee only posted as advice but depending on the planner that may or may not be the best way to go.

my choice would be that savey ,knowledgable all around planner thats fee only. my problem is i have not met one yet. . all the really good ones i know are fee based on assets.


my issue is planners are a dime a dozen that can handle the first 1/2 of the game which is your accumulation stage. thats when your saving ,investing and trying to raise a family.

most arent creative or well versed in the 2nd half of the game which is the decumulation stage as you enter retirement. here its all about products and strategys for keeping our money from excessive taxes or any taxes we dont have to pay. its for coming up with a working withdrawal plan and strategy for having our money last not only our lifetime but our spouses and heirs if any.

for an example of what i mean check out the likes of the retirement planning master ed slott.

[NJBOSCH]

Do not rely on Dave Ramsey for investment advice. I recommend reading Ray Lucia's book "Buckets of Money" or heading over to The Bogleheads Forum and learning about that investment strategy.

[mathjak107]

Wow a ray lucia fan. I thought i was the only one who thought he made lots of sense.

Damn,now you know where i steal most of my thoughts from.

Well i at least have been telling you all along dont give me credit for alot of my ideas im not that smart.

[mathjak107]

Originally Posted by 20yrsinBranson

Financial guru Dave Ramsey recommends the following:

25% Growth Stock Mutual Fund
25% Growth and Income Mutual Fund
25% Aggressive Growth Mutual Fund
25% International Mutual Fund

Personally, I would choose to put some into an index based account. There are many opinions about this. It s based upon what your risk tolerance is.

20yrisnBranson

Why would you recommend 100% equities when you havent a clue about the persons pucker factor for it?

[eskercurve]

I honestly think if you inherited or somehow won $2 million, you should seek professional help in investing it. Talk to them about what your long term goals are. And don't quit your job. Steady income is money in the bank. And it may not be a lot, but it'll be something.

Just don't go and spend it all. There's a reason why a very large number of pro athletes and lottery winners end up flat broke - they can't control their spending. And $2500 a month doesn't get you much in any state in the nation, and if you run to another country, you may as well just scream "here, take my money" as they hit you with fees. Good luck finding a job in those countries if that ends up happening to you. You may just end up kidnapped and die in the jungle. Think I'm kidding or exaggerating?

So, I would say walk into a reputable investment firm, and talk about your situation. From your grammar it is apparent that perhaps you aren't the sharpest knife or have the deepest education, so investing it yourself would be like playing with a loaded gun.

Even going to someone with money carries risk. The economy may go south in two years and you'll end up with half what you started with. Just don't panic, and keep working, and hey contribute every once in a while if possible.

[suiken01]

What do you guys think about this, I just do it safe and put everything in FDIC CDs. and high yield savings account. The rates are low now around 1%. However let's say long term like 50 years and assume I get 3% overall in all those 50 years, and the inflation overall in 50 years is also 3% then they will offset each other. So maybe 50,60 years from now my money will still be the same as now?

Now if I want to invest a little I am thinking about real estate, with hyperinflation or normal inflation the real estate will go up with the inflation, And the houses are so cheap right now, probably at the bottom or near the bottom and the mortgage rates are at historically low. I am thinking about using 500k to 750k of my money to invest in real estate. Rent them out and hold them long term like 10,20 years or longer. However I don't have a job so how am I going get qualified for mortgages? I am thinking about 100k to 150k houses, get the 1st one and buys it cash. rent it out and use the rental income as my income to qualify for 2nd house's mortgage, probably can't get too high of mortgage so still have to put down mostly cash. However I just repeating this for 5 houses or more then I should be able to get good LTV mortgages since by them I will have good income from rent. And just let my tenants pay for my mortgages. But I need to make sure people will want to rent the house, the neighborhood is good and not turning into trashy neighborhood. Find good tenants, avoid lawsuits by tenants. I mean real estate in 20,30 years from now, they gotta be up by then, economy should be ok by then and RE will go up with the inflation. I am thinking houses in FL, AZ, NV, 100 to 150k houses are probably good houses for rent over there?

With all the QEs and OTs what do you guys think about hyperinflation happening in the near future?

However I also heard from many people like mathjak mentioned, RE is a headache, just buy REITs don't get into that headache. Mathjack didn't you make some good money after 25 years? especially if you sold some before 08. Why were you sued and how do I avoid lawsuits from tenants. How to pick a house that got potential growth and won't stay empty and no one wanna rent it? I would really like to learn as much as I can from your 25 years of experiences, as well as other people's valuable experiences in real estate or just in general. Mathjak if time is back to 25 years ago and you can do it again, what would you invest in?

Also I have dual citizenship, right now a good chunk of my money in asia so uncle Sam doesn't know about it. I was planning on selling it and move all the money to the states however I know many rich people try to get their money out of the states to avoid taxes. Exactly what taxes are they trying to avoid? So maybe I should keep my money in asia so uncle Sam doesn't know about it? or some other ways. As I mentioned I got dual citizenship so I shouldn't use USA citizenship when I open up accounts etc overseas. IRS they can really get you around the globe huh? hard to avoid taxes from them?

well thanks guys for your suggestions and input, I have read every one of them and I will probably go back to them later. Right now I don't have much in the stock market, I do have some mutual funds.

[mathjak107]

its a flawed plan for many reasons you arent realizing.

3% interest rate and a 3% inflation rate with an inflation adjusted return and taxes dont cancel each other silly, your increasing your withdrawals each year on a declining balance. as well as paying taxes on the 3%

getting 3% on your balance isnt the same thing as drawing your balance down by 3% like when taking the withdrawals . gaining 3% is less money than withdrawing 3%.

its like if your stock falls 50% , then gains 50% it will only take you 1/2 way back to where you were ,you need a 100% gain to un-do the 50% drop.

just to keep your hair from hurting trying to figure this out a quick check on a calculator says taking a 3% withdrawal and increasing that withdrawal by the rate of inflation 3% and getting a pretax return of 3% will have you broke in under 30 years or a 100% failure rate. there is no money left after 29 years so going 50 years is out of the question.

its a very poor plan unless you draw way less . any unexpected expense or living longer destroys that plan even quicker. one other problem you dont recognize is you need a certain amount to live and pay bills. if you figured you would need a 3% withdrawl rate the first year then the years where interest rates are less than 3% will have you pulling out excessive amounts of cash to make up the shortfall in rates so you can keep paying those bills and eating.

that excessive rate above what your getting is like a trader with a string of losses. that money will be gone even when rates recover so that insures you will fail too.


you would have to draw so little to make that plan work it would be a shame to committ so much money to so little of a withdrawal. you could get 50% more of a withdrawal just by buying an immeadiate annuity.

if i could turn the hands of time back i would have done no real estate. the financial markets have done way better over the same time frame with non of the work and headaches of tenants.

real estate is awful in high inflation. we had 18% mortgages and real estate was dead. no one could afford to buy and prices plunged in the 1980's.

real estate and stocks did okay only after inflation fell again .

a myth was born after inflation fell that real estate was good in times of high inflation. thats a load of crap.

inflation fell for over 30 years so the fact markets did well after it fell makes it appear high inflation was a good thing. it wasnt ,it was awful and if we continued on from high inflation to hyper inflation the damage would have been even more severe. we have no where to go but up at this point both in inflation and rates. it will not be a repeat of what we had when inflation and rates fell for decades.

no matter how many raises you get your always behind the curve worse off when inflation rises alot.


your plan for real estate is like the real estate gurus of the 80's used to write about.

they all failed one by one as things crumbled like a deck of cards when something went wrong.

a tenant that takes a while to be evicted, a loss of a tenant that takes time to replace, increased taxes , unexpected repairs all drained cash and eventually they failed .

you need lots and lots of cash in reserve to do real estate to get you through the rough spots.

the real estate grave yard is filled with those who over extended themselves trying to copy these morons and ran out of dough.