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Is there a way to keep/manage that large a lumps simply?
Yes, summed up in two works, "Dividend stocks". Invest all the money in 5 or 10 decent stocks that pay dividends and collect the income dividend checks every year. Yes, there are other methods to grow your investments quicker, some more risky, so not so risky, but all of them involve higher levels of management, whether you do it yourself or pay someone to do it for you. So say you took the lump sum payout of 300 million dollars, lets just say they take 50% in taxes, that leave you with a 150 million, with an average dividend payout of 4% a year, that's 6 million a year, at 37% tax rate a year, say 40% in fed and state taxes, that's 3.6 million a year, dividends are paid out typically 4 times a year, so 900k every 3 months.
Yes, summed up in two works, "Dividend stocks". Invest all the money in 5 or 10 decent stocks that pay dividends and collect the income dividend checks every year. Yes, there are other methods to grow your investments quicker, some more risky, so not so risky, but all of them involve higher levels of management, whether you do it yourself or pay someone to do it for you. So say you took the lump sum payout of 300 million dollars, lets just say they take 50% in taxes, that leave you with a 150 million, with an average dividend payout of 4% a year, that's 6 million a year, at 37% tax rate a year, say 40% in fed and state taxes, that's 3.6 million a year, dividends are paid out typically 4 times a year, so 900k every 3 months.
This is simply terrible advice. No reason to limit your scope to 5-10 names. It makes zero logical sense and concentrates risk when you have more than enough funds to distribute the risk wiser
No reason to limit your scope to 5-10 names. It makes zero logical sense and concentrates risk when you have more than enough funds to distribute the risk wiser
Using ten different companies stocks diversifies your risk, you could bump it up to 20 stock to further diversify. My main point here is not to put all you cash into one stock, even it pays great dividends. Just remember that mutual funds by Bernie Madoff paid a great return on investments at one time, even if it was just an illusion.
, "Dividend stocks". Invest all the money in 5 or 10 decent stocks that pay dividends...........
You can not put 300 million dollars into 5-10 stocks. A stock is not a nebulous abstract idea and it isn't like making a deposit with a bank. A stock is actually a partial ownership of a company. If you try to buy 30 million dollars worth of other peoples' ownership interest, the price would skyrocket quickly to the point where the rate of return was nonexistent.
If you try to buy 30 million dollars worth of other peoples' ownership interest, the price would skyrocket quickly to the point where the rate of return was nonexistent.
The typical stock volume for a company say Exxon, is 16 million dollars a day, if you were to purchase the stock over a few weeks, then yes you could invest 30 million into one stock without a huge price spike.
Quote:
Originally Posted by Lowexpectations
Please tell me what mutual funds Bernie ran.
Your right, Bernie ran unregulated hedge funds, but it's especially the same concept. Pool investors money to invest in various securities to a return on investments.
Quote:
Originally Posted by Lowexpectations
A stock is actually a partial ownership of a company. If you try to buy 30 million dollars worth of other peoples' ownership interest, the price would skyrocket quickly to the point where the rate of return was nonexistent
Just one of the larger investors of Exxon is The Vanguard Group, Inc, with an investment position of 43 billion dollars, your going to tell me purchasing 30 million dollars of stock is going to spike the price so the P/E ratio makes it bad investment? Even number ten on the top 10 investors in Exxon position is 3 billion dollars, 100 times more than a 30 million dollar investment.
Last edited by Lizap; 10-16-2023 at 02:40 PM..
Reason: Clean-up from prior deleted post
Your right, Bernie ran unregulated hedge funds, but it's especially the same concept. Pool investors money to invest in various securities to a return on investments.
No it’s not the same concept. It’s not even close
Quote:
Just one of the larger investors of Exxon is The Vanguard Group, Inc, with an investment position of 43 billion dollars, your going to tell me purchasing 30 million dollars of stock is going to spike the price so the P/E ratio makes it bad investment? Even number ten on the top 10 investors in Exxon position is 3 billion dollars, 100 times more than a 30 million dollar investment.
You’ve misquoted me here as I didn’t stare what you’ve outlined as though I did
Using ten different companies stocks diversifies your risk, you could bump it up to 20 stock to further diversify. My main point here is not to put all you cash into one stock, even it pays great dividends. Just remember that mutual funds by Bernie Madoff paid a great return on investments at one time, even if it was just an illusion.
I think I would choose to squeak by on the meager 1.5% dividend yield of VTI in order to avoid the concentration risk.
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