How to Invest $1 Million | A Simple Strategy to Invest a Windfall

How to Invest $1 Million | A Simple Strategy to Invest a Windfall ⛱

Tools & Resources

0:00 How to Invest $1 Million
2:00 How Ryan Cohen invested $3.4 billion
4:04 Why investing $1 million is hard
8:50 How to invest a windfall
12:07 The Warren Buffett Portfolio
15:10 3 Fund Portfolio
19:34 Indvidual Stocks
23:26 Book recommendations

In today's episode, I'm going to answer a deceptively simple question. The question that seems hard, and it's really pretty easy. And it's this, how should you invest $1 million? Now, a lot of you may be saying, Rob, that's the last thing I need to worry about. I'm just trying to save $50 a month, or $500 a month, or whatever. It actually turns out to be, I think, a pretty significant question. And we can learn a lot about ourselves and investing generally, by asking this question and answering it, even if maybe it's not directly applicable to you right at this moment.

#1million #investing #windfall

ABOUT ME

While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.

LET'S CONNECT

DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.

AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning at no cost to you I earn a commission if you click through and make a purchase and/or subscribe. However, I only recommend products or services that (1) I believe in and (2) would recommend to my own mom.

[PapiChulo-ts]

Sometimes, i feel protecting your capital is much more important than making money. I'm approaching retirement with comfortable millions, yet scared of a market crisis and how to benefit from a possible correction. Where do I best grow my money?

[qxtdoec]

Just hit $216k in my emergency fund, now I'm ready to dive into investments... but hey, if anyone has a spare $1 million lying around, I'd love a head start 😂. Let’s see if I can turn these pennies into something big!

[educatedwanderer]

I inherited 700k from my dad and 200k from my mom and invested it all, a decade later my net worth is 3.1M. I was already debt free including my house, and had my own retirement savings of 350k at that time.

[KpxUrz]

I faced more or less exactly this situation. One of my foremost concerns was to exercise some caution so as not to lose the principal. I entered the stock market and became surely overdiversified, with a certain portion in CD's but most of it spread far around amongst stocks. I ended the latest year with about a 40% profit, and things continue prospering along nicely. I trade frequently seeking profits, but also am aware of dividends and selling option premium to enhance returns. I make all my own decisions and would never entertain paying any portion in fees to any so-called professional for management.

[ramrod]

How to invest $1M? That's easy.

1) Pay off your house and any other debt
2) Keep enough cash to sleep very well and fund any major expenses in the next 5 years (home renovations, kids' college, etc.)
3) Dump the rest in an S&P index fund.

[stevemlejnek]

I'm considering using Vanguard's advisory services. In the introduction call, the advisor asked me where I would get income since I am considering retiring before 59 1/2. I said I would consider 72t distributions. The advisor wasnt aware that 72t distributions applied to IRAs. Has me thinking this person may not be right for me.

[jonathanbuyck]

He's spot on with the psychological factor which we forget about. So many athletes and rappers go broke when they get that windfall

[angela-r]

Something I don’t see many finance channels discussing: As we try to grow our retirement portfolio, how do we protect it from others taking it through the many data breaches happening lately. I see a lot of videos about protecting wealth by investing in safer assets that aren’t as risky, but not many videos about how to protect from data breaches and losing everything from that type of threat. Example: Should you have a web login accessible which would also be accessible to others if your credentials were leaked or the investment firm’s recovery options not as sound as they should be? Or is it better (especially lately) to not have a web login for your account and just invest through your advisor or in person at the branch. Just watching the news lately about data breaches and accounts compromised makes me think about this more, especially for the retired community. Would you consider creating a video on this topic? I would love to see this topic discussed, especially with the breaches in the news lately. Thanks! 😊

[ZCAR]

Most people don’t want to be a millionaire, they want to spend a million dollars.

[wilmabrock]

Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly.

[JackCasablanca-painter]

First time watching Rob Berger. Great talk Rob. Really informative, intelligent points in this video. And you have a nice, likable presentation style. So I subscribed. I'm 56, it's nice to find a financial youtuber who's more at my own stage in life.

[griffinreitz]

A lot of it depends on age. Older you get the less risk you should be exposed to.

A million is nice to have, but it's not near as much money as many think it is.

[Hermanjackson]

Understanding personal finances and investing will most likely lead to greater financial independence. By being knowledgeable about money and investing, individuals can make informed decisions about how to save, spend, and invest their money. A trader made over $350k in this recession influenced market

[bobdrawbaugh]

Two years from retirement and this is where I find myself. My wife and I have invested in our 401k for the last 40 years. Never worried to much about our accounts. When the market was down we just continued to invest. But, now that we are close to retirement I’m constantly thinking about what to do with our 401K money. It’s become like a part time job research and watching videos like yours. As the retirement date nears I get more nervous about it. I’ve used the two fund portfolio all these years, not really knowing anything. I’ve adjusted the allocation to a 60/40 S/B as I near retirement.

[fruitloops]

The most advice I've gotten from Vanguard is the John Bogle message. Invest for the long term through low cost mutual funds in a well diversified portfolio. Good advice if you don't have any idea of what to do with your money. But I find very little to no diversity in stocks, bonds and reits. All of these seem to move together. For diversity you have to actually own real estate, actually own precious metals and then hold stocks. My message is that you made your money on your own, you need to learn how to invest on your own. Nobody cares about your money like you.

[Donkeyearsa]

If someone came up to me and asked me I got this $1mil windfall, how should I invest it?
My first question would be, how old are you?
My second question would be, do you own your own home?
Depending on thoues answers I would ask other questions.

[Floorguy]

An excellent discussion. Keeping it simple is a huge step up for the majority of people.

[hourgmtchannel]

My message to the most novice uninterested worker who equates investing in their retirement plan with brain surgery, 100% Vanguard VTI (or similar depending on what your plan offers with an eye on the expense ratio ) first job right out of college and then add BND (or similar) at age 30. Use ages 22 - 29 as your 100% equities building period. Time is on your side here. Then at 30 base your stock\bond asset allocation on whatever allocation you can tolerate. The older thinking was 100 minus your age is your equities (VTI) portion so that would be 70% VTI 30% BND at age 30 however I like 120 minus your age for your equity portion a bit better. Again it's all up to your tolerance level. Do this and you'll be better off than the the vast population of American workers.

[allanjeong]

How would you change the 90:10 portfolio when 30 vs 20 vs 10 vs 1 year away from retirement?

When looking at the total returns in the S&P500 index from 1927-2020, here are the average, minimum and maximum annualized returns at the end of any 30-year, 20-year, 10-year, and 1-year investment period:

Ave Min Max
1 year 12.16 -43.34 53.99
10 year 12.44 -1.35 23.13
20 year 12.38 5.65 18.97
30 year 12.39 9.79 18.44

[ericgammill]

This resonates. Thank you. Recently retired early at 59 under circumstances similar to your description. I decided it would be a good idea to get some advice so I went to a major brokerage to discuss ideas for retirement income. The representative was very happy to work with me and scheduled a meeting with an advisor. I arrive at the meeting a week later and find that the advisor is from an outside firm than will charge fees from .85 to 1.25%. Yeah, no thanks.

With a little more research, I see they have a "robo" account that offers a financial planner for $30 per month, customized portfolios and automated tax loss harvesting. Looking into this more.