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Re: 5 million at 24
Old 10-30-2005, 05:29 PM   #41
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Re: 5 million at 24

Quote:
Originally Posted by brewer12345
It would definately change the way I invest. *Some things become available that weren't before (VC, hedge funds, private placements, life insurance arbitrage, etc.). *Others simply become feasible at high net worth amounts. *For example, with $25MM net worth,I sould commit 1 or 2 MM to help bankroll a community bank start-up. *That wouldn't be too much of my capital to risk in one venture and it would get me (at the least) a seat on the board. *A large portfolio would also make it easier to invest in art and antiques and other illiquid specialty asset classes.
Wow, it sounds like you'd be working full-time if you amassed that much money.* *I think you should quit when you make your first million, then you won't need to buy the mansion to hold the antiques and art.* * Personally, I don't think I would bother with any of those trappings.* * Certainly not private placements, which would require a lot of vetting.* *Maybe a bit of a hedge fund, and perhaps even a VC fund that had diversified holdings.

So, the question remains: do any of these new-and-improved investments that would open up to you have better risk-adjusted returns than those investments available to Joe Investor?* * The article I linked above does seem to indicate that VC funds have a high alpha.
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Re: 5 million at 24
Old 10-30-2005, 05:35 PM   #42
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Re: 5 million at 24

Hiya Mike, I'm a lump-summer myself.

Here's an all Vanguard portfolio for you. It's 40/60 stocks and bonds, which is pretty conservative:

30% Vanguard Intermediate-Term Tax-Exempt (depending on what state you're in)
30% Vanguard Inflation-Protected Securities
20% Vanguard Total Stock Market
15% Vanguard Tax-Managed International
5% Vanguard Emerging Markets ETF


I'm curious, what kind of asset protection do you have going?
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Re: 5 million at 24
Old 10-30-2005, 07:40 PM   #43
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Re: 5 million at 24

Quote:
Originally Posted by wab
Wow, it sounds like you'd be working full-time if you amassed that much money.* *I think you should quit when you make your first million, then you won't need to buy the mansion to hold the antiques and art.* * Personally, I don't think I would bother with any of those trappings.* * Certainly not private placements, which would require a lot of vetting.* *Maybe a bit of a hedge fund, and perhaps even a VC fund that had diversified holdings.

So, the question remains: do any of these new-and-improved investments that would open up to you have better risk-adjusted returns than those investments available to Joe Investor?* * The article I linked above does seem to indicate that VC funds have a high alpha.
Eh, nothing I mentioned would require that much time. If you have a couple million to invest in art, you hire someone to do it for you. And I said I would want a board seat in my bank: that means I get to tell people when they are doing it wrong, not that I have to do it myself. All fantasy anyway; I'd quit long before I had that kind of money.

The studies on VC and hedge fund investments all have the same weakness: it is very hard to measure these asset classes. NAV is generally self reported and typically involves a lot of subjectivity. For example, how do you get fair market value of a $10 million piece of a one-off CCC-rated $100 million deal that rarely trades? You want that weekly or monthly? In contrast, even the most illiquid stocks can be valued with a pretty firm bid, ask or last trade. This sort of thing pretty much makes the studies I have seen next to worthless. Are there individual VCs and hedge fund managers taht add a lot of alpha? Sure. Can we tell if these "asset classes" add alpha? Not with any real degree of confidence.
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Re: 5 million at 24
Old 11-01-2005, 03:55 PM   #44
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Re: 5 million at 24

Quote:
Originally Posted by Monty Burns
I'm curious, what kind of asset protection do you have going?
LLC holding company (for cash), LLC real estate company (for rental properties). Jointly owned real estate (my house) and SEP IRA (supposedly creditors cannot touch this).

From what I understand, the LLC holding company makes any claims against me very difficult to collect, because they cannot get the assets in the LLC, and they get taxed on any gains that occur in the LLC, meaning I invest my money and they pay the taxes on it. Usually this leads to settlements of pennies on the dollar, or so i've been advised by council.
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Re: 5 million at 24
Old 11-01-2005, 03:57 PM   #45
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Re: 5 million at 24

Quote:
Originally Posted by Monty Burns
Hiya Mike, I'm a lump-summer myself.

Here's an all Vanguard portfolio for you. It's 40/60 stocks and bonds, which is pretty conservative:

30% Vanguard Intermediate-Term Tax-Exempt (depending on what state you're in)
30% Vanguard Inflation-Protected Securities
20% Vanguard Total Stock Market
15% Vanguard Tax-Managed International
5% Vanguard Emerging Markets ETF


I'm curious, what kind of asset protection do you have going?
So you are able to live from the returns of this portfolio? I havent pulled up these funds, curious as to the return (minus the stocks).
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Re: 5 million at 24
Old 11-03-2005, 01:35 PM   #46
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Re: 5 million at 24

Let's see:

3.6% * 30% Vanguard Intermediate-Term Tax-Exempt
4.2% * 30% Vanguard Inflation-Protected Securities
1.5% * 20% Vanguard Total Stock Market
1.5% * 15% Vanguard Tax-Managed International
1.5% * 5% Vanguard Emerging Markets ETF

= 3%

$5,000,000*3% is $150,000, which ain't bad. The income from the stocks is qualified dividends, so it's taxed at 15%. The IPS fund is taxed at regular income tax rate, and Tax-exempt is tax-exempt.

3% is really just treading water with inflation. Your actual portfolio growth is coming from stocks. There's a global flood of capital between China's currency manipulation and the petroldollar boom. There's no free lunch, so don't go reaching for yield with weird stuff like ADVDX.

Nearly all of that high net worth stuff is total BS designed to steal your money. Hedge funds are a scam. Active management doesn't work. Even separately managed accounts don't work as well as promised (they claim that you can sell your losing stocks to tax-managed your portfolio so you don't have to pay taxes, but in the real world there aren't enough losers in your portfolio for that to work for very long, and the trading costs and commissions are a lot higher than a plain old index fund, and your portfolio is going to be a lot less diversified than with index funds). Brokers will even rip you off on hidden fees when you buy munis and treasuries.
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Re: 5 million at 24
Old 11-04-2005, 08:08 AM   #47
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Re: 5 million at 24

Alpine Dynamic Dividend Fund Announces a $0.26 Dividend Distribution for September
2005 and a Total Payout of $0.38 for the Quarter Ended September 30, 2005
News Release
September 29, 2005
NEW YORK- Alpine Management and Research, LLC announced today the declaration of the quarter-end dividend
distribution of ordinary income for the Alpine Dynamic Dividend Fund (Symbol ADVDX; CUSIP 020875209) which will be
paid as follows:
Ordinary Dividend Income: __________________________ $0.26
Record Date: _____________________________________September 28, 2005
Ex-Date, Reinvestment Date, Payable Date: ____________ September 29, 2005
The September dividend distribution represents the regular monthly dividend of $0.06 per share plus the variable quarter-end
payout of additional dividend income accumulated during the quarter ended September 30, 2005.
ADVDX paid a total ordinary dividend of $0.38 for the quarter ended September 30, 2005, representing a 52% increase over
the $0.25 paid in the quarter ended September 30, 2004.
Beginning in April 2005, ADVDX increased its regular monthly minimum dividend by $0.01, from $0.05 to $0.06 per share. In
addition, in the third month of each quarter the Fund will distribute any excess dividend income that has been accumulated
during the quarter.
For the twelve months ended September 29, 2005, ADVDX paid out $1.50 in ordinary dividend income, with most of the
distribution being qualified for the maximum taxable rate of 15%. Based on a closing NAV price of $12.57 on September 28,
2005, the $1.50 dividend payout represents a trailing twelve-month dividend yield of 11.93% for the Fund.
The Alpine Dynamic Dividend Fund was designed specifically to maximize the amount of distributed income that is qualified
for the new 15% tax rate, while also employing a research driven approach to identifying companies with the potential for a
dividend increases and capital appreciation.

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Re: 5 million at 24
Old 11-07-2005, 06:11 AM   #48
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Re: 5 million at 24

Hey, Mike!

Congratulations! There is a lot of good advice here -

My small input:
educate yourself (well!)
don't just "dump" a huge sum into an index (etc.) all at once - dollar cost average it out just in case the market drops right after you invest (happened to me- well not a huge sum thank goodness- and took years to come back up- ugh!)
go very conservative in beginning to learn the ropes
watch out for "advisors" who simply want your money
keep reading and asking questions here

You must be pretty smart if you have come this far - don't do something stupid now! This is a great opportunity for you to sit back and decide where you want to go next. - Take your time and use your common sense. Wishing you the best of luck!

Jane
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Re: 5 million at 24
Old 11-08-2005, 04:52 PM   #49
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Re: 5 million at 24

Quote:
Originally Posted by mark
CyberMike:

You will be a prime target for brokers, financial planners, lawyers, accountants, and life insurance salesmen who want a piece of the pie, and some will not have your best interests in mind.

Maybe a good fee only financial planner is the way to go.
Yes, this is good advice.*

That's why I'm happy to offer my investment services to you, absolutely FREE of charge!!!!!!* That's right, you can have the benefit of my top-notch investing accumen for absolutely no cost.* This is a proposal with ONLY upside potential for you, the savvy investor!!!

If you're smart, you'll be ANXIOUS to take me up on this once-in-a-lifetime offer!* That's why I urge you--no, I beg you, for your own good, to act fast before this opportunity is just a fleeting memory!*

Don't be taken advantage of by scammers and charlatans, offering deals too good to be true.* Do you really know how much "conventional" banks and brokerages charge for their services?* Did you know that their returns aren't even truly guaranteed?* Why waste time and money dealing with the hassles of unnecessary red tape, when you can access a fabulous new world of premium investment products, offering you COMPLETELY hands-off service?

How do you take advantage of my world-class investing services, you ask?* Simply send me an email with your bank account information, date of birth, social security number, and mother's maiden name, and I will take it all from there!* If you act now, I'll even guarantee you a 100% return in the first year!* Where else are you going to find that kind of deal?*

I think you'll agree, this deal is too good to pass up, and you won't want to be left behind!* Take that important first step NOW, NOW, NOW!!!!!

BONUS ALERT!!!* You have been selected to receive a new Ginsu knife set if you accept this offer!!* All you have to do to receive your prize is submit your information in the next 10 minutes.* Don't wait!* HURRY and get your financial information to me NOW!!!
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Re: 5 million at 24
Old 01-09-2006, 09:57 PM   #50
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Re: 5 million at 24

Quote:
Originally Posted by MRGALT2U
Well dex, without slamming what you would do, I must say I am a little
skepical of the whole 24 yrs. old with 5.5 million $ story.* Not saying it has not/
can/not be done.* Just doesn't smell quite right to me.

Elvis has left the building................

JG
I can validate his position. I owned a lower % of the deal and also interested in learning more from everyone. I like the idea of investing in Vangaurd/CDs/& a Ranch. My wife is scared to live in the woods though Smiley


Dave- 23 | 2MM (post-gov share) for ER
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Re: 5 million at 24
Old 01-09-2006, 10:07 PM   #51
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Re: 5 million at 24

Quote:
Originally Posted by Monty Burns
Let's see:

3.6% * 30% Vanguard Intermediate-Term Tax-Exempt
4.2% * 30% Vanguard Inflation-Protected Securities
1.5% * 20% Vanguard Total Stock Market
1.5% * 15% Vanguard Tax-Managed International
1.5% * 5% Vanguard Emerging Markets ETF

= 3%
Monty,

Was this in 2005? How long have you invested in Vanguard? Can you give yearly return estimates?

I am half tempted to invest in 11mnth CDs yielding 4.6 across multiple banks/CUs- which will give me more time to learn...


Thanks for any advise...


Dave

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Re: 5 million at 24
Old 01-10-2006, 04:22 AM   #52
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Re: 5 million at 24

47.5% commercial RE or NNN looking for properties yielding 10% before taxes to generate 240k$ of revenue (be the landlord you'll squeeze more out of your props) and 47.5% in stocks to generate max cap appreciation over the long run with 0% withdrawal rate from the portfolio. I would go for a mix of ETFs, e.g. SPY, QQQQ, or lows fees funds etc. Spread the 2.5M over several banks and brookers and keep in mind the Baring story. Eggs of 250/300k are fine and never in the same basket. Avoid bonds as they have ruined over the long term all owners. RE (will also appreciate with the rents) and stocks should fight inflation over the long term. Believe in you and only you and do your homework. Be a PT and put less than 5% in your home. You've got all chances to be dead before you run out of money if you're conservative. Even if you pay 80k taxes and 20k to upkeep props, you'll have 140k of which you'll have to save at least 80k to keep growing and 60k to enjoy your life. Your total net worth should double every ten years, minimum (7% growth).
Good luck.
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Re: 5 million at 24
Old 01-10-2006, 06:56 AM   #53
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Re: 5 million at 24

Mike, I'm somewhat in the same boat as yourself. I'm new to stock investing. So while I read and learn I placed a lump sum with my Banker, Bank America. They have a preferred service in which my account sits, they have been buying AAA State bonds which turn over every second week, for the past few months I've been making just over 3% Tax exempt and the money is deposited in my account every second week, They do not charge any fees for this service.
This I will do until I've finished reading and learning about which way to go, I'm leaning towards Index funds, I just finished reading The four pillars, its a very good read, I have a few more to read.
FYI. I got some really great advice from these guys on this board,
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Re: 5 million at 24
Old 03-02-2006, 12:24 AM   #54
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Re: 5 million at 24

Old thread but ... At some point below $5m, I would change my investments to include a very sign. allocation to the passive investments from DFA. I would hire a flat fee advisor that would give me advice and access to the funds.

Oliver
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Re: 5 million at 24
Old 03-02-2006, 05:37 AM   #55
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Re: 5 million at 24

Quote:
Originally Posted by Oliver
Old thread but ...* At some point below $5m, I would change my investments to include a very sign. allocation to the passive investments from DFA.* I would hire a flat fee advisor that would give me advice and access to the funds.

Oliver
I'm really leaning in this direction, I have a adviser who will buy DFA for a small fixed fee. the rest I'll buy from Vanguard.
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Re: 5 million at 24
Old 03-02-2006, 05:43 PM   #56
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Re: 5 million at 24

Hi PJ03,

If you don't mind me asking, what sort of fees is your advisor charging?

Oliver
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Re: 5 million at 24
Old 03-02-2006, 07:35 PM   #57
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Re: 5 million at 24

Quote:
Originally Posted by Oliver
Hi PJ03,

If you don't mind me asking, what sort of fees is your advisor charging?

Oliver
Hey Oliver
$1k up to $300,000.00 $2k up to 1 mil
They want $3k for $3 mil and up. I have learned that with almost very Adviser they will lower their fees, when you think about it, there is really no difference in managing 500K and 5 mil when your in passive investments using either Vanguard or DFA funds.
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