How To Manage/Invest 2 Million Usd (bond, Etrade, brokerages, fund)

[suiken01]

hi guys how would you advise me on how to manage/invest 2 million USD?

here are some background, I am 35, I don't spend that much I just spend on things that I need. single now but might get married later or might not. I got a part time job it doesn't pay much at all and I might just stop that job. My money will worth a lot more in some countries like Thailand or other countries in asia, or just stay in the states and move to other states that got lower cost of living. Any states you guys can recommend that's decent to live and got low cost of living?

So I am 35 and I plan to maybe just retire and not work anymore. So still got 50 years to live, maybe longer maybe shorter. How would you guys advise me on those 2 million USD? Houses in the states are cheap now what do you guys think about that? other investments? insurances? etc

inflation is about 3%...but what is it like realistically for you older guys....I mean like living in the same standards how much more do you pay 10 or 20 years from now ? is it really 3% every year on avg?


thanks guys

[SpeedyAZ]

I'm a professional financial manager, I'll send you account information and you can transfer the funds into that account where it'll be managed.

Troll post if I've ever seen one, nobody makes $2 million with the grammar of an eight year old.

[suiken01]

yes I know my grammar isn't the best since it's not my first language, but this isn't a troll post I just want some good suggestions.

I didn't say I made the money with a job.

[mathjak107]

if you go 2 million to invest ,dont ask us who dont know a thing about you and your risk or goals . talk to a good pro. there is more to investing than just what to buy.

[westcoastforme]

Originally Posted by suiken01

hi guys how would you advise me on how to manage/invest 2 million USD?

here are some background, I am 35, I don't spend that much I just spend on things that I need. single now but might get married later or might not. I got a part time job it doesn't pay much at all and I might just stop that job. My money will worth a lot more in some countries like Thailand or other countries in asia, or just stay in the states and move to other states that got lower cost of living. Any states you guys can recommend that's decent to live and got low cost of living?

So I am 35 and I plan to maybe just retire and not work anymore. So still got 50 years to live, maybe longer maybe shorter. How would you guys advise me on those 2 million USD? Houses in the states are cheap now what do you guys think about that? other investments? insurances? etc

inflation is about 3%...but what is it like realistically for you older guys....I mean like living in the same standards how much more do you pay 10 or 20 years from now ? is it really 3% every year on avg?


thanks guys

If you really do have 2 million dollars, If I were you I would be VERY smart with it and not do much risky investing if you want to retire now.

Number 1. There are plenty of states with low cost of living. It depends on what kind of weather you want. Do you want a House or a townhouse. You can probably pick up a nice townhouse In Phoenix for $150,000 to $200,000. Property taxes are not bad out there as well.

Numer 2. Investments: Like I said before, you don't want anything with any risk. If I had a house paid for in cash and $1,800,000 left, I might put the money in FDIC bank accounts and get my measely 1% a year making me about $18,000. I'd say no/very little risk would be good.

Number 3. If you can live off $2000-2500 bucks a month you will be in good shape. Remember, no house payment, PMI, interest to the banks, etc. ($2500 times 12 months times 50 years is $1,500,000) That leaves you $300,000 grand left over, not including any interest earned on your accounts.

Number 4. You could always get a part time job working 2-3 days a week for 15-20 hrs a week to cover health insurance costs, car insurance, etc.

Number 5. YOU NEED homeowners insurance in case your house burns down, Car insurance in case of an accident, and health insurance. Dont skimp on the car insurance or health insurance. Make sure you have good limits for your car insurance.

[mathjak107]

2 million dollars and no investing in asset classes that contain risk and expect to live on it and inflation adjust it for 60 plus years is not something most would want to even try. odds are very high you will end up in failure without dumpster diving.

you would need to take no more than 2500 bucks a month inflation adjusted from your 2 million. thats if inflation stays at only 3% for the next 60 years. your talking about a 1-1/2% withdrawal rate.

how much were you expecting to draw a year? at 3% inflation you will have to draw double every 20 years.



.

[Billy_J]

With $2m, you can use any grammar you wish!

One thing is with stocks, if you buy too much of a low volume stock, you will make that stock go up in price. Selling you make the stock go down in price. (Not good!) Even $100k can do this with a low volume stock. Best to buy/sell a little at a time.

Anyway there are good paying dividend stocks. The actual stock price will go up/down, but the dividends will continue to roll in. All you need to do is buy when the stock is low (everyone else is selling), and be DARN sure those companies will continue stay in business and remain profitable for many years to come.

You could mirror investments from someone like Warren Buffett.

Also companies borrow money by issuing bonds. Some bonds are pretty much guaranteed in that the company is required to set aside the money each year to eventually pay off the bond. Companies do run into financial trouble and they default. You can lose everything in some of those cases. Depends on how the bond is worded and if it is secured or not. Lower paying bonds have better credit ratings, but pay lower interest.

For example Microsoft has some bonds which don't pay much, but excellent credit rating!

And with over $250k, some brokerages like ETrade will invest your money for you. Learn about "churning".

You could also buy rental properties / apartments and have that managed by a professional property management company. If you go this route, I would advise you to buy new buildings only. Older buildings have asbestos and other expensive environmental clean-up issues when remodeling. An older building might need to have all its plumbing replaced - not cheap!

As for where you live, some states like Nevada do not have state income tax.

Also there are some investments like oil trusts which give you "depletion" tax write off's. Some oil unit investment trusts go to zero at the end of their life. Read EVERY word of the trust and fully understand the investment before sticking a dime into it. Don't just buy something because it has a high yield.

Pay a lawyer and/or pay an investment advisor to review your investments before hand. A few hundred or a thousand is well worth a little more understanding of how an investment works. And the investment advisor should be a disinterested party - does not gain anything from your investments.

Also find a good CPA and ask about your options.

The best thing to protect your money would be to diversify. A little here, a little there, some more over there.

[suiken01]

thanks a lot guys, especially the ones that took their time and wrote a good amount like westcoast and billy.

Yes for financial adviser I was wondering about that, min 100k to open an account and they take a %. But Billy you gave me a great advice which is to pay financial adviser to look over my investments(but they ain't my adviser for my investments, so no conflict of interests). Why didn't I think about that before?

So how much do those financial advisers charge per hour? any banks got them or get the ones in investment banks like JP Morgan, etc. ?

In cheaper cost of living states like NV, TX, FL. Can you live with 2500 to 3000 USD a month? for a single man and a small family let's say 4.

So how about you guys? what would you do with 2M. I know you all got diff goals and are of diff ages, just wondering.

It was very sad to see my poor grammar caused people to think I am a troll. I looked over my post but can't really find the errors, maybe someone can help me make my level of English into the 2M range as well? thanks again guys

[TempusFugitive]

What you're looking at is 'old man investing', then.

Stocks will traditionally outperform inflation and will not stay flat for 20 years. I would suggest deciding on what risk you're willing to accept and then investing in dividend paying stocks in a diversified portfolio.

That won't make you a fortune, but it will keep you well-off. As an example: The Bank of Montreal has paid dividends every year for 125 years. They're relatively safe. Banking in general is usually a safe investment. Power generation? Power consumption only goes up and British government has given several benefits to electricity generation.

With the right dividend-paying stock portfolio(Which will require you researching on your own. Managed portfolios, I won't give my opinion on. You can research those and discover if you think they're right), you can expect an inflation adjusted income of about 5% of your initial investment, going to more depending.

As an example: Johnson and Johnson. If you had invested $100, 000.00 in it in 1980 and reinvested the dividends you'd gotten, by around 2010, you'd be worth $5.5 million and be living on dividends 3 times your total initial investment. This will most likely not happen with a diversified portfolio, but you're also less likely to be hit by a market glut in a single area.

[mathjak107]

it certainly can happen with a diversified portfolio. total return is total return no matter how its obtained. if total return is the same in both cases you can sell a small amount off any portfolio each year and create your own dividend.

there is no difference at all whether the company sells a piece of its value off and distributes it or you do. if you want to pick stocks that did well apple and microsoft are two great examples on the other end of the spectrum, for most of their growth they paid no dividend but thats not to say you couldnt have created your own off them.

the s&p 500 is filled with dividend payers but that doesnt mean a simple mix of gold,a total market index fund ,long term treasuries and cash couldnt beat it, in fact it did . you could have rebalanced each year and got even a bigger dividend you created.

i like stocks that pay dividends only because many do so and raise their dividends because it proclaims look at me ,im healthy and have cash i dont even need. they may out perform because of the vote of confidence but there is nothing about the dividend itself that lets you succeed any better or worse than putting together any other good portfolio..

anyone who follows my posts knows im not one who accepts things for face value as most of the time the logic is wrong. dividend stocks are stocks ,plain and simple they get hit with all the carnage in a downturn any other stock does. the darling of wall street DVY with its computer selection of only the top dividend paying stocks got totally hammered in the downturn falling more than its non paying peers.

there is no easy success in markets or one way thats better than another and folks have to learn this as thats why most small investors end up seeing 1/3 the gains the markets do long term.

sure its easy to find a few good dividend paying stocks and use them as an example but its just as easy to pick results any way you choose.

the real deal is your total portfolio and its return including your cash. its about looking at years end and getting your entire snap shot.

you get folks who brag about how well they do in the market and they have about 10- 15% of all their money invested and the rest earning crap hung out to dry because they have a bad portfolio plan or no plan.. they pick a handfull of stocks their buddy told them to buy and thats their total plan. even if they found the next apple it wouldnt make a difference overall because the rest of their plan sucks.

its all about your total financial snapshot that counts not just the few things you cherry pick out.

im not saying all your money gets put at risk, thats not what im saying at all. im saying all your money should be maximized for the time frame you want to use it and a total portfolio constructed that includes all assets and instruments for letting you meet those goals both short , intermediate and long term.

telling someone to throw all their money into any equities at all whether they pay a dividend or not without they themselves knowing their own pucker factor is the worst advice you can give anyone.

anyone who has not tested their own stomach for risk has to first test those waters before deciding a thing. 2008 taught most folks a lesson about those words "investment may contain risk"

a 25 year old who bails out every time there is a drop and losses money shouldnt be in a high percentage of stock regardless of their age.

there is a whole lot to be learned by the op before he should be asking for advice on a internet forum from non pros.