Higher Portfolio Balance - Should you be doing anything differently?

[DawgMan]

Like most here, I have seen a nice run up in my portfolio balances from this long bull run. I have maintained my KISS method of investing, but have wondered if any different tactics/services/opportunities should be considered once a portfolio balance hits X or just stay the course regardless. In my case, while I had planned to shut down the machine at the end of the year, I will probably continue to work at some level while income opportunities are low hanging fruit and I am enjoying what I am doing. That could be a year or 3, but I suspect I will be adding further to the pot which has surpassed desired "number". I have rolled into the 8 figure club so just want to make sure I am being as efficient/prudent as I should be. My gut tells be to stay the course and run things as planned, but just wondering if there is some portfolio balance that unlocks the door to other opportunities that I should be considering?

 

[mrfeh]

Sounds like you've won the game. Why complicate things?

Choose your AA and stick to it.

 

[street]

I see no need to change what you are doing now. If I had your money, I would throw mine away.

 

[timemoveson]

Nope! Welcome to the club. I got into the club by doing everything myself on a plan. I certainly wouldn't be changing anything due to the jump in scale. Congrats.

 

[pb4uski]

+1... just another variation of won the game.

Beyond the balance needed to prudently supply for your wants and needs for the rest of your life (for example, your gap based on spending less SS divided by a conservative 3.5% WR)... you can invest in anything you want from CDs to growth stocks or even cash buried in a coffee can in the back yard (if you do the last on then please let me know where your back yard is).

Another variation that I have mulled... anything in excess of a conservative funding level that I'll call $x is eligible to be spent without imperiling the plan... so it $x is $2 million or $5 million or whatever... any overfunding in excess of $x could be spent if wanted.

 

[Spock]

You've hit 8 figures.
Ask yourself if you woke-up tomorrow and it had dropped 50%... how well would you sleep until it recovered (if it recovers... Japan is still down something like 50% from its highs in the 1980s/90s.)
Its like Vegas... when you're ahead pull some money off the table to get home with. No sense in staying all-in on every hand. YMMV.

 

[pb4uski]

You've hit 8 figures.
Ask yourself if you woke-up tomorrow and it had dropped 50%... how well would you sleep until it recovered (if it recovers... Japan is still down something like 50% from its highs in the 1980s/90s.)
Its like Vegas... when you're ahead pull some money off the table to get home with. No sense in staying all-in on every hand. YMMV.

Spock, we are on Earth, not Vulcan.

I'm not sure what the OP's AA is, but how many times in the history of Earth has a diversified investment portfolio dropped 50%.... not to speak of overnight! I'm guessing that the answer is none or perhaps once.

As to whether it has ever occured on Vulcan, I'll rely on you to answer that... I have no knowledge.

 

[DawgMan]

Live long and prosper!

60/40, which plan to ride out for now

 

[Mdlerth]

You are not meant to take this post seriously

When you reach eight figures, most experts recommend diversifying into a Bugatti.

In the long run, it will be much cheaper than a trophy wife.

 

[audreyh1]

Not in my opinion other than considering gifting more generously. I haven’t changed our investment philosophy or AA in spite of considerable growth since retired.

I thinks it’s great how investments simply scale. If you were investing a certain way at upper 7 figures, does crossing the threshold to 8 really make a difference?

 

[OldShooter]

Like most here, I have seen a nice run up in my portfolio balances from this long bull run. I have maintained my KISS method of investing, but have wondered if any different tactics/services/opportunities should be considered once a portfolio balance hits X or just stay the course regardless. In my case, while I had planned to shut down the machine at the end of the year, I will probably continue to work at some level while income opportunities are low hanging fruit and I am enjoying what I am doing. That could be a year or 3, but I suspect I will be adding further to the pot which has surpassed desired "number". I have rolled into the 8 figure club so just want to make sure I am being as efficient/prudent as I should be. My gut tells be to stay the course and run things as planned, but just wondering if there is some portfolio balance that unlocks the door to other opportunities that I should be considering?

Well, in the world of professional investing eight figures is not a big deal. If you want to look at options, look at some pension fund portfolios. There you will see stuff like timber land, hedge funds, private equity, etc. in addition to the plain old stocks that make most of the money for them. Some even bought those crazy Argentine 100 year 8% dollar denominated bonds. I guess those guys plan to be retired before the next Argentine default. We are not at eight but we are pretty serious seven, and I wouldn't touch any of that stuff with a stick. Meat & potatoes, stocks and bonds, for us. We love fancy spices and exotic dishes in our diet, but not in our portfolio.

One thought, though: Estate plan? If you do not have one, carefully read your state's intestacy laws and see if you like them. If you do have a plan, does it need to be tuned up to reflect the size of your current portfolio and your state's evolving laws? Along those lines, do you have a plan for any RMD issues that may arise?

 

[NW-Bound]

When you reach eight figures, most experts recommend diversifying into a Bugatti.

In the long run, it will be much cheaper than a trophy wife.

Of course I have heard of Bugatti, but did not know how much one costs. Again, the Web is great.

A Bugatti Chiron, the brand's basic model, costs about $3 million. Bugatti's latest creation, though, sets a new bar in price and exclusivity. Bugatti's La Voiture Noire cost €16.7 million, or almost $19 million, including taxes.

So, a basic Bugatti is about all that the OP can afford, as he needs to save some dough for insurance and repair expenses.

I do not care for cars, so in his shoes I would simply cut my stock AA to something lower, like 50% or even 40%. We are reminded that the OP has not said what his current allocation is.

 

[NW-Bound]

Here's that Bugatti La Voiture Noire. In French, it means "The Black Car".

It has 6 tail pipes, and an engine with 16 cylinders delivering 1500 HP. Only one was made as of March 2019, and sold for $19M.

The more pedestrian Chiron also has an engine with 16 cylinders. Time for 0 to 60mph is 2.4 sec. More than 200 cars were booked before the first delivery in 2016, at the starting price of 2.4M euros, and a deposit of 200K euros was required.

Top speed is 236mph, limited electronically because there are no tires that can handle greater speeds. On a race track, it has reached the speed of 249mph.

 

[ckelly78z]

I can only dream of being in the "8 figure" club, and will be doing well to gain entrance into the "7 figure" club (possibly right at the end before retirement). You may want to either stay the course, or roll back your risk in these uncertain times, do not chase more gains, you could easily live off the interest on what you already have accrued.