Wow....a few damaged egos here using my name in vain again.......
Put at least 50% into hard assets (gold, silver, real estate) and avoid most stock market issues like the plague. The exception is some utility stocks and energy stocks that are heavily invested in coal and/or nuclear. I wish I could tell you to buy bonds, but the only bond I'd put money into is an IBond because of the inflation index and you're limited to $60,000 a year.
That's it. You'll notice that the twits attempting to discredit anything I say are far too chicken to actually go on record with an opinion. I also have a lot of support for my bearish views that can be found here.
"...reality has a well-known liberal bias." -- Stephen Colbert
Here's the sound advice you posted in my thread about buying some modern gold commems.
<< <i>Buy PORKBELLIES only, why you ask, with all the fat people in the world including myself, we always tend to eat to much, so if people stop eating PORKBELLY prices would drop. I don't see peoples stomachs gettong any smaller,so buy PORKBELLIES now!! why the price is still cheap. Or is it POTBELLIES I mean? >>
With the kind of money you're talking about you'd make a killing.
Collecting coins, medals and currency featuring "The Sower"
If you are looking for preservation of capital and a regular income from your investments you need to be looking at very conservative, low risk investments such as bonds and money markets. Someone posted before about hiring a "fee only" financial adviser and that is good advice. Someone who earns an annual flat-rate fee rather than making commissions on trades is going to have your best interest at heart and not be churning your accounts.
I get E-mails daily from Nigeria, Ghana, Congo and Ivory Coast offering special opportunities. I am kidding of course. If this is a serious thread than follow the excellent advice given by Oreville below!
Just remember that whatever has worked for the past 10-15 years will likely not work as well, if at all. These are decidedly different times. Stock market results are heavily skewed based on the past 20 years...and everyone was a financial wizard and genius when picking stocks and stock funds over that period. Now, let's line them all up in 5 years and see how they did in the shorter term. I'll bet by that time many are heavy into commodities, PM's, etc. Physical assets is where one needs to be for the next 10 years. If you do want stocks you want ones that own real assets (oil, water, gas, timber, land, metals, gems, etc.). Trying to make money over the next years will not be as important as keeping what you have right now. Be very aware of the derivative's beast that lives inside many of the world's largest companies. Much of this is off balance sheet a la ENRON and now Refco. This one fact has the ability to take down many of them in one swift, and totally unexpected blow
If you want no risk, you can get in the area of 4.7% on a 1 year CD. You can spread your $ to various institutiions so the whole enchilada will have FDIC insurance protection as well.
"Vou invadir o Nordeste, "Seu cabra da peste, "Sou Mangueira......."
Florida has a fairly expensive tax called the Intangible tax which can be costly if you have $2 million in stocks and bonds if you become a Florida resident. It is nicknamed the "Wealth tax." Many Florida residents including clients of mine make sure they move much of their stocks and bonds just prior to 12/31 of each year into cash and CD's to minimize the tax and then after Jan 2nd move it back into those investments. But the price of doing so can be losing long term capital gains.
My thoughts:
(1) Go slow.
(2) I happen to be a CPA but I cannot believe you don't already have a CPA who is able to advise you of the tax ramifications of the sale of your homes. However, frankly, I am surprised you did not sell your primary home first which would be eligible for up to $500K tax free cap gains if married ($250K if single) as long as you lived there for 2 years or more. Once you do that then move into one of your other homes instead of selling it and live there at least another 2-3 full years as your primary residence instead of in Florida which you can still vacation in the winter. Then if Florida beckons then you can then also sell the second home also free of capital gains tax up to the same $500K/$250K limits. While there is no current prohibition on doing this for all four homes every 2-3 years, I would advise against it since the real estate market ups and downs could negate all of your tax savings as well as other reasons. I would assume you have already been advised of all of this by your current CPA. If he is a good one, keep him even after you move and visit him once a year if need be.
(3) educate yourself on investing your own money. Buy a subscription to Money Magazine (ignore all of the ads) and the Wall Street Journal at the very least! Learn. It is your money!!!
(4) taxbuster1040 gave you very good advice. Read his post again.
(5) If you still have $2 mil to deal with notwithstanding the above comments, in the very short run for one year or so, park your monies into 18 different banks and purchase CD's in $100K amounts and "ladder" your maturities between 6 months and 3 years. 2 accounts should be money market or short term savings of up to 100K each. 6 CD's mature in 6 monts to 1 year, 6 CD's mature with 1-2 years and 6 CD's mature within 2-3 years. Shop for the best interest rates. Certainly you can do that. This is only temporary until you begin to acquire the knowledge to properly invest the monies or build some confidence in a fee only investment advisor. This way you are not tempted to put all your monies at one time into investments and possibly blow it all. Even great advisors make the right call at the WRONG TIME!
(6) Up to now the focus in my post is NOT THE RETURN ON YOUR MONEY BUT THE RETURN OF YOUR MONEY!!!!
(7) Then after you learn a little bit more about investing money in 6 months take baby steps!! Never entrust more than $100K at one time with a fee based advisor in the beginning!!!
(8) jpkinla, roadrunner, monsterman, (with the idea of reading books), idhair, ElContador and many others gave you very good advice.
(9) The reason for laddering the maturity of your CD's is that the CD's will mature in a staggered fashion and give you a chance to invest 1/3 of your monies 1 year at a time. This is much more sane than trying to do it all at once. It can be overwhelming. If in any year, you are not ready to invest the 1/3 of your monies, put the funds into another 1 year or longer CD just to buy more time until you are ready.
(10) Check back with all of us in 9 months. Feedback is good for us too. We are not perfect but neither are stockbrokers and investment advisors.
Just sell everything and send the money to me. Just jokingof course. I only want half. As to advise what to do with all that money. Keep half in numerous checking accounts and go out and have a ball with it. The other half invest in stocks, bonds, mutual funds, apartment buildings. Use lots of the spending money on becoming a world renound coin collector then you could make the pages of the Red Book. See pages 395 to 398 in the 2006 edition. Give proof and uncirc sets of coins and a copy of the Red Book to all your relatives. Have fantastic giveaways on this forum as a thankyou for all the dumb advise.
I think the fee-only estate planner is the best way to go. But I will also bite on providing an asset plan for amusement.
Stocks -- Remember that you are buying interest in companies, but not requiring your specific talent (or lack thereof) to run them. Buy companies that you feel are worthwhile and potentially profitable. Diversify, seek out those with growth estimates established by more than one analyst and with PEGs under or near 1, with responsibly low or no debt, and at least 10% insider ownership. You want the team that is steering the ship to have the same interest in profiting from it as you. Sectors I like going forward are energy services (CDIS, UNT, HW, CCJ), medical (TEVA, PLMD, NMHC, IART), technology (SRDX, CRDN, OVTI).
Bonds -- If you need regular income from your investment, bonds are it. Look at the total return and use bond funds and gov't/muni bonds that avoid taxes for you and limit risk.
Tangible Assets -- There is nothing wrong with putting a fraction of your $$$ into things like coins and art as longer term investment instruments. We all know the mantra: Buy the book first. I like the old box of twenty idea Jay Parrino used to promote. Divide your coin budget into twenty shares. Buy the best classic type coin you can for each share in a PCGS holder and put it in the box.
Suppose you were investing a quarter million bucks this way. That would be over $12K/coin on average. You could put together a handsome portfolio like:
PR63 Flying Eagle Cent XF Flowing Hair Dollar MS65 Arrows & Rays Half Dollar F S-1 Chain Cent MS63 High Relief St. Gaudens $20 PR65 Louisiana Purchase Gold $1 PR50 Gobrecht $1 1892 MS65DMPL Morgan $1 1955/55 MS65RD Cent MS66 Hawaiian Half Dollar 1795 XF/AU Small Eagle $5 1937-D MS64 3-Legged Buffalo Nickel 1932-D MS65 Quarter PR66 Twenty Cents 1796 VG Quarter 1885 MS66 Nickel 1896-S MS63 Quarter MS63 Gold $3 PR66 Trade Dollar 1652 AU Oak Tree Sixpence
Actually, that itself would make for a fine starting inventory for a coin business. Mark 'em up a a little, spend a little on advertising, rotate a new one in after you sell one. Write off your travel to coin auction which might also resemble vacations.
Buy CDs. Even at 4% interest (no clue what interest is right now) that's $80,000 per year in income. Especially if you own your own home, that's more than enough to live VERY comfortably. If 80k/year isn't enough you could always suck it up and try to live without a beach house
I heard they were making a French version of Medal of Honor. I wonder how many hotkeys it'll have for "surrender."
Make an appointment to see a financial advisor with a stellar reputation, hire a tax attorney to handle all of the tax issues that you will now face and provide legal advice (remember, CPAs and financial advisors are not licensed to practice law), and then also have a CPA on hand to run the numbers and do the reporting. Other than that, I cannot give any more specifics.
Always took candy from strangers Didn't wanna get me no trade Never want to be like papa Working for the boss every night and day --"Happy", by the Rolling Stones (1972)
You could invest in proven breeder pairs of parrots and make your money back in one year, and it's the investment that keeps on giving!
Cheryl........."She was not quite what you would call refined. She was not quite what you would call unrefined. She was the kind of person that keeps a parrot." - Mark Twain
Find groups of folks that are smart, have a successful track record of investing in early stage startups, or have a track record of credibility.
And if you have a tolerance for high risk, allocate some of your capital for tag along type of investments, where you can invest alongside the above folks.
.....but again, only if you have a lot of tolerance for high risk and a longer time horizon....
Comments
Put at least 50% into hard assets (gold, silver, real estate) and avoid most stock market issues like the plague. The exception is some utility stocks and energy stocks that are heavily invested in coal and/or nuclear. I wish I could tell you to buy bonds, but the only bond I'd put money into is an IBond because of the inflation index and you're limited to $60,000 a year.
That's it. You'll notice that the twits attempting to discredit anything I say are far too chicken to actually go on record with an opinion. I also have a lot of support for my bearish views that can be found here.
Russ, NCNE
<< <i>Buy PORKBELLIES only, why you ask, with all the fat people in the world including myself, we always tend to eat to much, so if people stop eating PORKBELLY prices would drop. I don't see peoples stomachs gettong any smaller,so buy PORKBELLIES now!! why the price is still cheap. Or is it POTBELLIES I mean? >>
With the kind of money you're talking about you'd make a killing.
<< <i>I've got a great stock tip for you. Techno Reticent Obliviated Largesse Labratories. NASDAQ stoch symbol: TROLL. >>
You think?
<<The exception is some utility stocks ....>
Now there is a pearl of wisdom if I have ever heard it. With interest rates ratcheting up---buy the most interest rate sensitive sector.
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
Knowledge is the enemy of fear
I am kidding of course. If this is a serious thread than follow the excellent advice given by Oreville below!
roadrunner
<< <i>I get E-mails daily from Nigeria, Ghana, Congo and Ivory Coast offering special opportunities. >>
You need to cash in those lotteries you win every day too.
"Seu cabra da peste,
"Sou Mangueira......."
Florida has a fairly expensive tax called the Intangible tax which can be costly if you have $2 million in stocks and bonds if you become a Florida resident. It is nicknamed the "Wealth tax." Many Florida residents including clients of mine make sure they move much of their stocks and bonds just prior to 12/31 of each year into cash and CD's to minimize the tax and then after Jan 2nd move it back into those investments. But the price of doing so can be losing long term capital gains.
My thoughts:
(1) Go slow.
(2) I happen to be a CPA but I cannot believe you don't already have a CPA who is able to advise you of the tax ramifications of the sale of your homes. However, frankly, I am surprised you did not sell your primary home first which would be eligible for up to $500K tax free cap gains if married ($250K if single) as long as you lived there for 2 years or more. Once you do that then move into one of your other homes instead of selling it and live there at least another 2-3 full years as your primary residence instead of in Florida which you can still vacation in the winter. Then if Florida beckons then you can then also sell the second home also free of capital gains tax up to the same $500K/$250K limits. While there is no current prohibition on doing this for all four homes every 2-3 years, I would advise against it since the real estate market ups and downs could negate all of your tax savings as well as other reasons. I would assume you have already been advised of all of this by your current CPA. If he is a good one, keep him even after you move and visit him once a year if need be.
(3) educate yourself on investing your own money. Buy a subscription to Money Magazine (ignore all of the ads) and the Wall Street Journal at the very least! Learn. It is your money!!!
(4) taxbuster1040 gave you very good advice. Read his post again.
(5) If you still have $2 mil to deal with notwithstanding the above comments, in the very short run for one year or so, park your monies into 18 different banks and purchase CD's in $100K amounts and "ladder" your maturities between 6 months and 3 years. 2 accounts should be money market or short term savings of up to 100K each. 6 CD's mature in 6 monts to 1 year, 6 CD's mature with 1-2 years and 6 CD's mature within 2-3 years. Shop for the best interest rates. Certainly you can do that. This is only temporary until you begin to acquire the knowledge to properly invest the monies or build some confidence in a fee only investment advisor. This way you are not tempted to put all your monies at one time into investments and possibly blow it all. Even great advisors make the right call at the WRONG TIME!
(6) Up to now the focus in my post is NOT THE RETURN ON YOUR MONEY BUT THE RETURN OF YOUR MONEY!!!!
(7) Then after you learn a little bit more about investing money in 6 months take baby steps!! Never entrust more than $100K at one time with a fee based advisor in the beginning!!!
(8) jpkinla, roadrunner, monsterman, (with the idea of reading books), idhair, ElContador and many others gave you very good advice.
(9) The reason for laddering the maturity of your CD's is that the CD's will mature in a staggered fashion and give you a chance to invest 1/3 of your monies 1 year at a time. This is much more sane than trying to do it all at once. It can be overwhelming. If in any year, you are not ready to invest the 1/3 of your monies, put the funds into another 1 year or longer CD just to buy more time until you are ready.
(10) Check back with all of us in 9 months. Feedback is good for us too. We are not perfect but neither are stockbrokers and investment advisors.
Stocks -- Remember that you are buying interest in companies, but not requiring your specific talent (or lack thereof) to run them. Buy companies that you feel are worthwhile and potentially profitable. Diversify, seek out those with growth estimates established by more than one analyst and with PEGs under or near 1, with responsibly low or no debt, and at least 10% insider ownership. You want the team that is steering the ship to have the same interest in profiting from it as you. Sectors I like going forward are energy services (CDIS, UNT, HW, CCJ), medical (TEVA, PLMD, NMHC, IART), technology (SRDX, CRDN, OVTI).
Bonds -- If you need regular income from your investment, bonds are it. Look at the total return and use bond funds and gov't/muni bonds that avoid taxes for you and limit risk.
Tangible Assets -- There is nothing wrong with putting a fraction of your $$$ into things like coins and art as longer term investment instruments. We all know the mantra: Buy the book first. I like the old box of twenty idea Jay Parrino used to promote. Divide your coin budget into twenty shares. Buy the best classic type coin you can for each share in a PCGS holder and put it in the box.
Suppose you were investing a quarter million bucks this way. That would be over $12K/coin on average. You could put together a handsome portfolio like:
PR63 Flying Eagle Cent
XF Flowing Hair Dollar
MS65 Arrows & Rays Half Dollar
F S-1 Chain Cent
MS63 High Relief St. Gaudens $20
PR65 Louisiana Purchase Gold $1
PR50 Gobrecht $1
1892 MS65DMPL Morgan $1
1955/55 MS65RD Cent
MS66 Hawaiian Half Dollar
1795 XF/AU Small Eagle $5
1937-D MS64 3-Legged Buffalo Nickel
1932-D MS65 Quarter
PR66 Twenty Cents
1796 VG Quarter
1885 MS66 Nickel
1896-S MS63 Quarter
MS63 Gold $3
PR66 Trade Dollar
1652 AU Oak Tree Sixpence
Actually, that itself would make for a fine starting inventory for a coin business. Mark 'em up a a little, spend a little on advertising, rotate a new one in after you sell one. Write off your travel to coin auction which might also resemble vacations.
NSDR - Life Member
SSDC - Life Member
ANA - Pay As I Go Member
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
You could invest in proven breeder pairs of parrots and make your money back in one year, and it's the investment that keeps on giving!
Cher-Wood Forest Aviary
POTD - May 26, 2005
Find groups of folks that are smart, have a successful track record of investing in early stage startups, or have a track record of credibility.
And if you have a tolerance for high risk, allocate some of your capital for tag along type of investments, where you can invest alongside the above folks.
.....but again, only if you have a lot of tolerance for high risk and a longer time horizon....