If you had a Million Dollars in cash today...

[gendiko]

...how would you invest it?

Let's imagine you received that money through an inheritance, a liquidity event of a company you worked for or a lucky hand in poker :). You already paid taxes on it and it's sitting on your savings account collecting dust. Consider the current political tumult, long lasting bull market and other factors.

I've digged through quite a few posts on MMM and GCC, but was not able to find anything that speaks to this. Except an article that MMM posted on Twitter the other day: Why We are Not Really All Doomed (a reminder from 2014 and  just as valid now) - http://www.mrmoneymustache.com/2014/03/03/why-we-are-not-really-all-doomed/.

Would you wait? Would you do a less US stock-heavy allocation?

[Cranky]

Since this was evidently a total surprise to me, I'd park it in Vanguard, something pretty conservative, and get on with my life.

"Difficult to see, the future is..."

[Christof]

When it comes to investing it wouldn't make a difference whether I invest one thousand or one million... I have a plan that I follow.

[2Birds1Stone]

I would put it in a 3 fund portfolio

50% VTI
25% VXUS
25% VBI

[dividendsplease]

Two girls at the same time - office space

[msekar516]

Have you ever heard of IRS code 7702?


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[lostamonkey]

Throw it at my internationally diversified index funds in a taxable account. Give my notice on Monday.

[nereo]

I'd follow my IPS.  Always defer to your IPS.

* but first I'd throw fistfuls of money into the air in the protection of my own home.  Just because :-)

[chasesfish]

I would put it in a 3 fund portfolio

50% VTI
25% VXUS
25% VBI

+1 to above.  This is exactly what I would do tomorrow if I had the windfall today.

[BTDretire]

I would put it in a 3 fund portfolio

50% VTI
25% VXUS
25% VBI

+1 to above.  This is exactly what I would do tomorrow if I had the windfall today.

 After several searches, I'm not finding VBI. I think it is a Vanguard Bond ETF.
But all I can find is VBIIX.
 Got a link?

[SeaEhm]

$600k in rental properties
$200k in Vanguard funds
$100k in speculative car purchase
$100k in laddered CDs in case rental properties need repair

[Aggie1999]

If you are an early retiree or don't plan to retire for 20+ years why would you put any part of that 1 million in bonds? Quite a few articles out there that shows a 100% stock AA has always outperformed or evened out to portfolios with bonds over the long term.

[PizzaSteve]

Invest per my current asset allocations.  No changes in lifestyle or retirement plan.

[Cookie78]

I'd buy a boat*.
Then out the rest in ETFs allocated as per my plan.
Then quit working because I'd be well over my FIRE number.


*(Canoe - $1000)

[SeaEhm]

I'd buy a boat*.
Then out the rest in ETFs allocated as per my plan.
Then quit working because I'd be well over my FIRE number.


*(Canoe made out of maple wood- $1000)

I fixed that for you. (Because canada)

[SwordGuy]

We're already maxing out our tax-advantaged accounts.

We would put $900,000 of it in Vanguard, 70% VTSAX and 30% VTIAX. 
Set aside $40k to pay off the HELOC in October.
Set aside $60k for a cash buffer.
And let the boss know to start looking for a replacement.

[oldtoyota]

I would donate it to the ACLU.

[nereo]

I would donate it to the ACLU.

Good call.  Headsmack - now I just feel really selfish.

[Al1961]

Hmmmm.

Don't need the million, so would probably "invest" in a niceish country home on the Isle of Wight.

[FIRE_Buckeye]

$250k - Buy a decent house in cash as we love the area we're in and are currently saving for one
$30k - Pay off the remaining student loan balances for my GF and I
$20k - Earmark for a few nice vacations
$700k - Invest in Vanguard index funds according to my preferred asset allocation

[Zikoris]

Dump it into my robo-advised index funds account, leaving maybe 100K in the bank so we wouldn't need to make any withdrawals for four or five years, and retire immediately.

[Indexer]

Well my mortgage rate is insanely low so I'm fine paying that off the slow 30 year way, and investing the rest.

I would keep a larger emergency fund in short term bonds, let's say 50k. Then invest the rest. 80% stocks, 20% bonds.

48% VTSAX
32% VTIAX
20% VBTLX

After several searches, I'm not finding VBI. I think it is a Vanguard Bond ETF.
But all I can find is VBIIX.
 Got a link?

BND is the ETF version of VBTLX.

On that note why are people using ETFs for large amounts? The expenses on the Admiral shares of the Vanguard index funds are the same or lower cost than the ETFs, but you don't have to worry about the bid-ask spread with the Admiral shares and they are better for automatic investments & withdrawals. The only downside to the admiral shares is the $10,000 minimum, but if you have a million dollars I think you can handle that. ;)

[Much Fishing to Do]

How to let it alter my spending/work is more the question I would think.  How to invest it is no different than the question I face every day with my retirement accounts (there are no tax consequences to changes in those, so however I think I should invest found money today is how I should have those invested today).  So the answer is just as boring as my diversified portfolio....

[Metric Mouse]

If you are an early retiree or don't plan to retire for 20+ years why would you put any part of that 1 million in bonds? Quite a few articles out there that shows a 100% stock AA has always outperformed or evened out to portfolios with bonds over the long term.

Yes, but the math does change if one is actively drawing out of that portfolio versus letting it sit and grow over the time period.

[Dances With Fire]

1) Take care of anything my elderly father needs done/ want around the house...

2) Take 800K+ and park it in Vanguard Balanced Index fund. Simple. Quick. Done. ( If you want a little LESS risk, put a small % in C.D.'s or short-term treasuries.

3) Take a % and travel someplace(s) that you or your S.O. always wanted to go and enjoy life.

4) Give my 2 weeks (days) notice when I got back.
 

[Roothy]

1. Buy a Tesla SUV.
2. Put the rest in VTSAX.
3. Hand in my notice at work.

[rothwem]

1. Buy a Tesla SUV.

Ew. 

[dandarc]

I would put it in a 3 fund portfolio

50% VTI
25% VXUS
25% VBI

+1 to above.  This is exactly what I would do tomorrow if I had the windfall today.

I'd go 55/25/20, but yeah this.

[nereo]

1. Buy a Tesla SUV.

Ew.

What don't you like about the Tesla Model X? 

[Slow&Steady]

Payoff debt, including mortgages ($280k)
I need 2 new roofs ($20k)
I would like to fence the property we live on for cattle ($3k)
I want a nice barn for livestock ($10k)
Buy more livestock, used tractor, etc ($30k)
I want solar ($25k)
Max 401k ($18k)
Max 2 ROTH, assuming we can ($11k)
Invest in Real Estate ($300k)
Invest in taxable accounts ($300k)
Take a vacation ($3k)

This will decrease current expenses by $30k/year
Farm cost will increase but should be self sustainable after the 1st year or 2.
It will increase rental income by more than $30k/year (cover needed expenses but not personal wants)
I would probably NOT stop working but I would look into part-time options that allowed me to keep health insurance.

[Loud Noises]

#1 Pay off the mortgage, thus reducing any "lump sum" risk of #2...

#2 Invest according to my IPS, currently 100% stocks, 33% international.

#3 Continue working because I love what I do. 

#4 Tell DW that she can stop working if she wants.

#5 Stop worrying about anything related to finances.  Happiness level increased!

[Metric Mouse]

1. Buy a Tesla SUV.

Ew.

What don't you like about the Tesla Model X?

The outside is kinda ugly.

[Cookie78]

I'd buy a boat*.
Then out the rest in ETFs allocated as per my plan.
Then quit working because I'd be well over my FIRE number.


*(Canoe made out of maple wood- $1000)

I fixed that for you. (Because canada)

Sounds heavy for portaging!!!

I've been thinking about this for the past day or two.

I'd also get some ultra light camping gear and some snowshoes. I'd get a topper for my truck and I might splurge a little on a newer camper, instead of an older cheaper one I'm planning on getting. I'd also get an inreach, and a higher powered rifle than the one I have. I'd build a little log cabin/workshop. And get solar panels for my camper and cabin.

These are all things I plan to do anyway, I'd just do them sooner!

I'd probably donate some to AARCS too since I don't need a million. And I'd also share some with family and partners.
And I MAY decide to keep one of my houses in the city. Maybe. I may even keep both of them until the real estate market picks up. Or I might sell immediately because IDGAF.

[Tyson]

Pay off the mortgage, then invest the other $670k in 80/20 stocks/bonds.  That would give me $900k in investments, reduce my monthly expenses by $2500, and have a paid off house valued at $620k. 

[I'm a red panda]

Is this a million before or after  taxes?

If a million after taxes, I'd pay off my mortgage, something I otherwise hadn't planned to do anytime soon.
If before taxes, well, I'm not sure a million is really as much as it sounds...

I'd put the rest into my Vanguard account keeping my current domestic/international and stock/bond allocations.
I may consider setting up a trust for my (soon to be) daughter.

[Roothy]

1. Buy a Tesla SUV.

Ew.

What don't you like about the Tesla Model X?

The outside is kinda ugly.

Yes, I agree.  But I have never once bought a car for aesthetics.  I like that it is big enough for all my camping equipment, but is electric, and most important of all, the self-driving features.  Tesla has promised roof rails and a trailer hitch option soon.  That will make it even more appealing to me.

In my fantasy world of having $1MM handed to me.

[nereo]

1. Buy a Tesla SUV.

Ew.

What don't you like about the Tesla Model X?

The outside is kinda ugly.

Yeah, I guess.  I was never one to pick a vehicle primarily for its attractiveness though. If money were no option and the stupid doors didn't break so often I'd take a Model X though.  Honestly it seems far more practical than the Model S.

Meh - I'm such a cheap bastard even with an extra $1MM I'd still buy a used hatchback and put the rest into my index funds.

[robartsd]

I'd immediately move the $1,000,000 into a conservative (perhaps as low as 1/3 equities) investment portfolio (as much tax advantaged as possible) - conservative because it would basically make me FI, but I would continue working in the short term while I make decisions related to RE that I had expected to need to make for several more years.

[partgypsy]

I would pay off house (60K) pay off car (10K).
I would try to figure out a long-term situation to keep my mother and my sister housed (150K?)
I would give 20K to lil brother.
I would put a big chunk in Vanguard Wellington if it is still open to investors (600K).
The rest I would put in a cash or equivalent fund (160K). I would actually prefer to have more investments in property and less in the stock market. But I would start slow.
I would love to donate the equivalent of what 100K earns every year to certain causes, but I would have to figure out how to structure that.
Not mathematically optimal, but would give me the most peace of mind.
The idea of which, is to work part time for another 10 years. Working part time and the lack of stress of having the house paid off, would make me feel like I'm practically retired anyways!

[TheStachery]

I would donate it to the ACLU.

BS

MOD EDIT: Calling someone a liar with no basis for doing so is rude. Please read the forum rules.

[NESailor]

Have you ever heard of IRS code 7702?


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Yup.  And if someone raised it to me as a serious offer/idea instead of in jest I may have to resort to violence ;)

Then I'd pay off the rest of my tiny mortgage and dump the remainder into VTSAX.  I may be talked into some bonds.  Maybe 10%.  I'd also tell my boss to start looking for a replacement.

[MoonLiteNite]

If i had a full million?
I would actually be super save and do something 1/3 US bonds, 1/3 corp bonds and 1/3 index fund.

That is double what i need for FI so i would be super safe with it :D

[TheStachery]

I would donate it to the ACLU.

BS

MOD EDIT: Calling someone a liar with no basis for doing so is rude. Please read the forum rules.

Let me be more clear then.  I don't believe that the poster would give all the money to the ACLU.  I think the poster is generally trying to incite a response to to the political happenings of the world, which have zero relevance in this topic.  Let's stop trying to derail every post on this forum with some political stance, save it for your Facebook account.
poster of the comment should also read the form rules.

Have a nice day y'all.

[boarder42]

bet it on Red.

[davisgang90]

Buy my retirement home in cash and put the rest in 90/10 equity/bond split fund and draw 4% SWR.  Don't need the money as part of my fire plan so I can accept more risk (primary retirement funds come from military pension).

[Metric Mouse]

bet it on Red.

A famous man once said always bet on black...

[katstache92]

Quit my job, move to Florida, get a job I enjoy (for insurance reasons - until that gets figured out.)  Never be cold again.

[lthenderson]

48% VTSAX
32% VTIAX
20% VBTLX

I have mine split between the same three except 60%/20%/20%. I've really enjoyed watching it grow these last five years!

[radram]

I'd follow my IPS.  Always defer to your IPS.

* but first I'd throw fistfuls of money into the air in the protection of my own home.  Just because :-)

This answer really resonates with me, since it makes so much sense. It does lead me to a follow-up question.

Is there an amount of money that would lead you to modify your IPS?

Are you saying there is NO amount of money that would cause you to rethink your IPS, like say an amount of money that could allow you a smaller return with a guarantee that you would outlive it while still amassing huge amounts indefinitly?

[nereo]

I'd follow my IPS.  Always defer to your IPS.

* but first I'd throw fistfuls of money into the air in the protection of my own home.  Just because :-)

This answer really resonates with me, since it makes so much sense. It does lead me to a follow-up question.

Is there an amount of money that would lead you to modify your IPS?

Are you saying there is NO amount of money that would cause you to rethink your IPS, like say an amount of money that could allow you a smaller return with a guarantee that you would outlive it while still amassing huge amounts indefinitly?

Short response: A good IPS should account for this.

Slightly longer response: A well thought out IPS should cover not just your current accumulation phase, but what you do post FI.  One should consider what to do with, for example, an unexpected windfall (basically this question) or how to cover a really big and unexpected expense.
Personally ours says we keep contributing to our index funds. We set our "ultimate safe WR at 3.5%" - if/when we exceed this we enter 'philanthropy stage' and give whatever the difference in our WR is our list of charities we make each year (so basically if our WR dropped to 2% we'd give 1.5% of our investments to charity each year; 2% + 1.5% = 3.5%).
This ought to cover us if we were to get a $1MM windfall or even a $10MM windfall.  If somehow we wound up "accidental billionaires" we'd probably need to sit down and re-write our ISP as giving away tens-of-millions annually isn't as straightforward as giving away tens-of-thousands.