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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Parentheses on June 03, 2021, 04:13:27 AM

Title: What would you do with 100k
Post by: Parentheses on June 03, 2021, 04:13:27 AM
Title says it all.

What investments would you make immediately right now with 100k?
Title: Re: What would you do with 100k
Post by: vand on June 03, 2021, 04:27:26 AM
The same ones I'm already making.

The idea that you change your investing just because you have come into a lump sum is asanine.
Title: Re: What would you do with 100k
Post by: nereo on June 03, 2021, 04:43:08 AM
+1.
I’d follow it in accordance with my Investor Policy Statement (IPS).  Don’t have one? Now’s a great time to make one, and it won’t take more than a few minutes. Following the Investment Order is never a bad idea.  Personally, I would divide it up into my three index funds and call it a day (I have no debt and already max out our tax-advantaged accounts).

The mistake so many people make is that they treat windfalls differently than planned earned income, and us that money to buy something they otherwise wouldn’t.  That’s the textbook definition of being irresponsible with money.
Title: Re: What would you do with 100k
Post by: talltexan on June 03, 2021, 06:15:47 AM
I actually think a substantial pot of new money is a great chance to revisit your risk tolerance, and probably ratchet down your allocation to riskier investments (like $VTI) and ratchet up bonds.
Title: Re: What would you do with 100k
Post by: cool7hand on June 03, 2021, 06:16:49 AM
+1 on directing new money into your current asset mix.
Title: Re: What would you do with 100k
Post by: Steeze on June 03, 2021, 06:21:28 AM
Put it all in dog money

Dog money, dog money, dog money, dog money
I'm trading it in for dog money
Dog money, dog money, dog money, dog money
I'm putting it all in dog money
Title: Re: What would you do with 100k
Post by: RWD on June 03, 2021, 06:39:55 AM
I would follow my investment policy statement. Invest it the same as I did the last $100k.
Title: Re: What would you do with 100k
Post by: nereo on June 03, 2021, 07:20:35 AM
I actually think a substantial pot of new money is a great chance to revisit your risk tolerance, and probably ratchet down your allocation to riskier investments (like $VTI) and ratchet up bonds.

But why?  What about a windfall makes your risk tolerance change?  In the end it's still your money, and money is fungible; a person's behavioral response to risk (e.g. a market downturn) isn't likely to change based on where the money came from. 
Title: Re: What would you do with 100k
Post by: DadJokes on June 03, 2021, 07:28:46 AM
I actually think a substantial pot of new money is a great chance to revisit your risk tolerance, and probably ratchet down your allocation to riskier investments (like $VTI) and ratchet up bonds.

But why?  What about a windfall makes your risk tolerance change?  In the end it's still your money, and money is fungible; a person's behavioral response to risk (e.g. a market downturn) isn't likely to change based on where the money came from.

I can see that perspective. When I'm 2-3 years from my projected retirement, I'll probably begin a glideslope path the reduce SORR. If $100k would put me in that window, I can see using it as a reason to begin that transition.
Title: Re: What would you do with 100k
Post by: nereo on June 03, 2021, 07:54:59 AM
I actually think a substantial pot of new money is a great chance to revisit your risk tolerance, and probably ratchet down your allocation to riskier investments (like $VTI) and ratchet up bonds.

But why?  What about a windfall makes your risk tolerance change?  In the end it's still your money, and money is fungible; a person's behavioral response to risk (e.g. a market downturn) isn't likely to change based on where the money came from.

I can see that perspective. When I'm 2-3 years from my projected retirement, I'll probably begin a glideslope path the reduce SORR. If $100k would put me in that window, I can see using it as a reason to begin that transition.

That's different, though.  Your ISP should outline when you transition from more aggressive to a more conservative AA as you approach your retirement date.  If that additional $100k pushes you over the edge you very much might want to establish a bond ladder or similar strategy for SORR.  But that's sticking with your strategy, not going against it.
Title: Re: What would you do with 100k
Post by: celerystalks on June 03, 2021, 08:16:34 AM
Put it all in the emerging markets.
Title: Re: What would you do with 100k
Post by: ericrugiero on June 03, 2021, 08:35:17 AM
I actually think a substantial pot of new money is a great chance to revisit your risk tolerance, and probably ratchet down your allocation to riskier investments (like $VTI) and ratchet up bonds.

That could be wise if the "substantial pot" of money changes your situation dramatically.  ex: you plan to FIRE at $1.5M and when you have saved $1M you inherit an additional $800K.  It would make sense to save some of that money in conservative investments or cash to reduce sequence of returns risk as you start retirement. 

If the new money doesn't change your situation that much than you should invest it just like you have invested everything else.  ex:  you plan to FIRE at $1.5M and you have $600K saved when you inherit $100K.  That speeds up the timeline by a couple years but doesn't immediately change anything.  I would invest it just like the rest of my money.  The investment order thread is VERY well thought out and is a great starting point.  Getting more conservative at this point doesn't make sense to me. 
Title: Re: What would you do with 100k
Post by: MustacheAndaHalf on June 03, 2021, 08:36:42 AM
Put it all in dog money

Dog money, dog money, dog money, dog money
I'm trading it in for dog money
Dog money, dog money, dog money, dog money
I'm putting it all in dog money
Don't forget the tax advantages of a 401 (K9).
https://www.youtube.com/watch?v=cbI31x3FpS0
Title: Re: What would you do with 100k
Post by: theoverlook on June 03, 2021, 09:31:58 AM
100% into VTSAX / VTI.
Title: Re: What would you do with 100k
Post by: effigy98 on June 03, 2021, 10:15:41 AM
34 NUSI, 34 NTSX, 20 PHYS, 6 VXX, 6 GBTC

Sent from my Pixel 3a using Tapatalk

Title: Re: What would you do with 100k
Post by: v8rx7guy on June 03, 2021, 10:19:43 AM
V to the T to the S to the A to the X
Title: Re: What would you do with 100k
Post by: vand on June 05, 2021, 06:05:29 AM
I actually think a substantial pot of new money is a great chance to revisit your risk tolerance, and probably ratchet down your allocation to riskier investments (like $VTI) and ratchet up bonds.

You are right, but only in the sense that your ideal asset allocation normally change depending on where you are in your journey, and a lump sum may move you materially closer to your total goal. 

But OP hasn't provided any further info than just a basic dollar amount, so no telling how meaningful a $100k amount is in terms of his overall journey.
Title: Re: What would you do with 100k
Post by: Radagast on June 05, 2021, 01:39:05 PM
(https://media.ed.edmunds-media.com/lincoln/navigator/2020/oem/2020_lincoln_navigator_4dr-suv_l-black-label_fq_oem_2_815.jpg)
Obviously
Title: Re: What would you do with 100k
Post by: talltexan on June 09, 2021, 04:01:18 AM
Radagast is only checking to make sure OP is committed to Mustachian values, obviously.
Title: Re: What would you do with 100k
Post by: Rosy on June 09, 2021, 10:59:16 AM
Quote
Quote from: Steeze on June 03, 2021, 06:21:28 AM
Put it all in dog money

Dog money, dog money, dog money, dog money
I'm trading it in for dog money
Dog money, dog money, dog money, dog money
I'm putting it all in dog money
Don't forget the tax advantages of a 401 (K9).
https://www.youtube.com/watch?v=cbI31x3FpS0

ROFL - Thx for the youtube song - made my day:). 
Title: Re: What would you do with 100k
Post by: MilesTeg on June 09, 2021, 11:58:03 AM
one hell of a bender?
Title: Re: What would you do with 100k
Post by: Psychstache on June 09, 2021, 12:36:39 PM
I'll tell you what I'd do...
Title: Re: What would you do with 100k
Post by: PDXTabs on June 09, 2021, 12:36:58 PM
If the new money doesn't change your situation that much than you should invest it just like you have invested everything else.  ex:  you plan to FIRE at $1.5M and you have $600K saved when you inherit $100K.  That speeds up the timeline by a couple years but doesn't immediately change anything.  I would invest it just like the rest of my money.  The investment order thread is VERY well thought out and is a great starting point.  Getting more conservative at this point doesn't make sense to me.

Yes, but some folks have a fixed timeline for whatever reason (pension, kids, visas, etc). A big windfall might well allow them to diversify more or take some risk off the table.
Title: Re: What would you do with 100k
Post by: vand on July 05, 2021, 03:59:05 AM
Ben Carlson answers this exact question:
https://awealthofcommonsense.com/2021/07/what-would-you-do-with-a-hundred-grand-right-now/

and pretty much says what we've said - you should have prepare a framework for dealing with any lump sum, whether it is one dollar or one million dollars.
Title: Re: What would you do with 100k
Post by: ender on July 05, 2021, 07:19:18 AM
We'd probably keep it in cash as our next large purchase involves a downpayment most likely.
 
So that would be easy/anticlimactic.

Put it all in dog money

Dog money, dog money, dog money, dog money
I'm trading it in for dog money
Dog money, dog money, dog money, dog money
I'm putting it all in dog money

I love this video hahahaha.

Title: Re: What would you do with 100k
Post by: FLBiker on July 07, 2021, 05:59:26 AM
LOVE that dog money video, thanks!

We sold our house last summer, netted about $100K.  DCA'd it into our regular old asset allocation at $10K a month (because I was a chicken).  Should have just dumped it in as a lump sum, but at least it's all in now. :)
Title: Re: What would you do with 100k
Post by: Loren Ver on July 07, 2021, 11:44:18 AM
So apparently I am different and do different things.  We treat windfalls differently, maybe we aren't too bright.  But we managed to FIRE so maybe we aren't too dense either.

Depends on the windfall.

Prior to FIRE, when DH and I had windfalls, we would invest it, but usually in our higher risk/higher growth options.  We never had anything near $100,000, so we might have split it up more, we don't have any data to back it up, but we very well could have.  This special treatment of windfall strategy worked really well for us.  It cut years off our FIRE timeline but never endangered our overall FIRE strategy. 

I only have one example of getting a windfall post FIRE of close to that value so I know what we did with it.  It was an inheritance to me specifically and in my family we keep inheritances as his or her money, so I didn't want to mingle it with our money.  Since it was my money, I got to decide what to do with it.  I like my usual investments, but didn't want to mingle it with those accounts so I found a different investment that I liked and plopped it in there.  My goal was to put it into something growth  so that it would grow and I could take out the first fruits every year and use it on something both I and my grandmother would appreciate.  If it doesn't grow, I don't take anything out.  If it grows extra, leave it in to compound. 

LV
Title: Re: What would you do with 100k
Post by: joe189man on July 07, 2021, 12:27:36 PM
Anyone have the IPS language on how they handle the transition from growth to preservation and SORR. My folks are in a similar spot with some small windfalls but very close to retirement and a tiny nest egg. They are planning on SS for most if not all income and rarely touch the Stash.
Title: Re: What would you do with 100k
Post by: Paul der Krake on July 07, 2021, 01:07:51 PM
Buy a parking spot with a nice view for my Tesla.
Title: Re: What would you do with 100k
Post by: StarBright on July 07, 2021, 01:32:41 PM
Just to be different (but honest) - we'd pay off our house and I'd quit my job.

I want to leave the workforce, DH wants to never retire but is by far the lower earner. Paying off the house frees up enough money to live off his salary comfortably while our investments coast for another few years.
Title: Re: What would you do with 100k
Post by: RainyDay on July 09, 2021, 12:51:35 PM
Just to be different (but honest) - we'd pay off our house and I'd quit my job.

I want to leave the workforce, DH wants to never retire but is by far the lower earner. Paying off the house frees up enough money to live off his salary comfortably while our investments coast for another few years.

Same here!  I'm not FIRE'd yet (2-ish years to go), so $100k would speed that journey or finish it!
Title: Re: What would you do with 100k
Post by: Sanitary Engineer on July 09, 2021, 01:31:47 PM
I think we would fill up our tax advantaged accounts, buying VTSAX, then put the rest into VTSAX in our brokerage account.  But our total debt is $100,000 and we can't retire until the house is paid off in 10 years, so I considered whether paying off debt would be worthwhile.

I decided it would not be since the debt has such low rates.
Title: Re: What would you do with 100k
Post by: EliteZags on August 12, 2021, 05:54:00 PM
I actually think a substantial pot of new money is a great chance to revisit your risk tolerance, and probably ratchet down your allocation to riskier investments (like $VTI) and ratchet up bonds.

I would do the opposite, extra lump of money means I can tolerate more risk , plus it's house money

tho I don't throw money away into bonds as it is so nothing to decrease there, but prob a good amount into PLTR to let ride a few years 
Title: Re: What would you do with 100k
Post by: Car Jack on August 13, 2021, 06:17:15 AM
Man, getting it as a tax free lump sum would push a decision, I guess.  I can see 3 choices.

1: (easiest) Buy a new Porsche 718 Cayman GT4  (while $100k won't fully cover the cost, it would be most of it)

2: (easy but take time) Upgrade my Wrangler that I offroad.  If I want to splurge, a pair of dynatrac 1 ton axles with D60s.  That's twenty grand.  I guess the rest would go to control arms, upgraded ball joints, adjustable track bar, and I'd replace the springs with some Metal Cloaks.  Maybe splurge and pay a shop to do the work.  I'd still have more than half the money, so I guess it would go to a set of wheels with some 35's and then some VTI.

3: (longest wait) Order a new Lotus Emira.  V6 with a proper manual gearbox in the dark green, I think.
Title: Re: What would you do with 100k
Post by: ender on August 13, 2021, 06:18:37 AM
If we had $100k more tomorrow, tax free, I'd much more seriously consider moving to an acreage in 2022.
Title: Re: What would you do with 100k
Post by: pasadenafr on August 13, 2021, 08:56:25 AM
I'd go with my regular IPS - buy VTSAX in brokerage, and rebalance accordingly in my 401(k).

Anyone have the IPS language on how they handle the transition from growth to preservation and SORR. My folks are in a similar spot with some small windfalls but very close to retirement and a tiny nest egg. They are planning on SS for most if not all income and rarely touch the Stash.

Mine is basically an Excel table describing the glide path:

Quote from: The Mighty IPS
Go from 80/20 to 60/40 by the time I retire. Start at age 50 or when portfolio reaches 20x retirement expenses. Gradually add bonds every year.

(https://i.imgur.com/J7DPNB9.jpg)

I also have something about gliding back up to a higher stock allocation later in retirement, but it's still fairly uncooked at this point - no actual timeline or trigger, lots of questions :)
Title: Re: What would you do with 100k
Post by: SpaceCow on August 13, 2021, 10:43:52 AM
A situation like this could happen if I get the wherewithal to cash out of the crypto market. I would put it into a taxable account with a fairly conservative stock to bonds ratio. I might need it within the next 5 years to purchase or cover rent for housing, depending on where I decide to move. 
Title: Re: What would you do with 100k
Post by: Heroes821 on September 01, 2021, 12:41:12 PM
I should agree with the IPS comments, but I find myself really wanting to be free of our mortgage, so at this stage in life. I'd fill my Emergency Fund back up where I want it.  Set aside enough to cover our IRAs this year and dump the rest at the house.
Title: Re: What would you do with 100k
Post by: Pomegranate12 on September 01, 2021, 09:33:50 PM
You know what I would do if I had a 100k ? I would invest half of it in low risk mutual funds and then take the other half over to my friend Asadulah who works in securities...
Title: Re: What would you do with 100k
Post by: nereo on September 02, 2021, 01:46:35 AM
You know what I would do if I had a 100k ? I would invest half of it in low risk mutual funds and then take the other half over to my friend Asadulah who works in securities...

What do you mean by “low risk mutual funds”? A bond fund?
Title: Re: What would you do with 100k
Post by: Dicey on September 02, 2021, 02:56:42 AM
Here's a twist on the original question.

DH and I have decided we're going to give 100k to each of his two kids. For Offspring the First, we will put $33k into each of their two kid's 529s that we started when they were born. The remaining $34k will go to Offspring the First and their spouse. They can do whatever they want with it.

Offspring the Second is pushing 30 and still lives with us. His $100k is going to come with strings. He's going to have to use it to launch. Time for him to fly the coop. He can use it for rent or for a down payment, just as long as he moves out. In fact, as long as he launches and stays launched, he can spend it any way he wants.

And yes, we can afford it. It won't impact our NW significantly, no matter how long we live.
Title: Re: What would you do with 100k
Post by: rmorris50 on September 02, 2021, 04:00:02 AM
Add to cash stash and increase the amount we are dollar cost averaging into our tax efficient brokerage  account. Pretty boring.


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Title: Re: What would you do with 100k
Post by: theoverlook on September 02, 2021, 07:59:34 AM
You know what I would do if I had a 100k ? I would invest half of it in low risk mutual funds and then take the other half over to my friend Asadulah who works in securities...

What do you mean by “low risk mutual funds”? A bond fund?

It's a movie reference - Office Space.

Offspring the Second is pushing 30 and still lives with us. His $100k is going to come with strings. He's going to have to use it to launch. Time for him to fly the coop. He can use it for rent or for a down payment, just as long as he moves out. In fact, as long as he launches and stays launched, he can spend it any way he wants.

Instead of "cash for keys," it's "cash for frees." Fly little birdie, fly! As the old parent (as in, started having kids quite late) of a 4 and 6 year old the idea of them still being home at 30 is pretty thought provoking.
Title: Re: What would you do with 100k
Post by: Jack0Life on September 02, 2021, 11:35:16 AM
I'm in the same boat right now. Just closed on a cash out refinance with $100k.
Already put $44k to use yesterday when Abbvie took a plunge. Bought 400 shares ~$110.
Trying to figure out what to do with the rest. Really want to just put the rest in Indexes but the market is scary high right now.
Title: Re: What would you do with 100k
Post by: nereo on September 02, 2021, 04:59:49 PM
You know what I would do if I had a 100k ? I would invest half of it in low risk mutual funds and then take the other half over to my friend Asadulah who works in securities...

What do you mean by “low risk mutual funds”? A bond fund?

It's a movie reference - Office Space.

ah, thanks.  Missed that reference despite enjoying the movie.  It’s been a while…
Title: Re: What would you do with 100k
Post by: rmorris50 on September 02, 2021, 05:19:27 PM
I'm in the same boat right now. Just closed on a cash out refinance with $100k.
Already put $44k to use yesterday when Abbvie took a plunge. Bought 400 shares ~$110.
Trying to figure out what to do with the rest. Really want to just put the rest in Indexes but the market is scary high right now.
I own Abbvie too, but I got in at $80 a share.


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Title: Re: What would you do with 100k
Post by: Rdy2Fire on September 03, 2021, 07:39:24 AM
I'd invest in plane tickets :)
Title: Re: What would you do with 100k
Post by: forgerator on September 03, 2021, 11:48:36 AM
I would invest it into DeFi Liquidity provider positions on the Polygon platform using Ethereum/USDC or Ethereum / Matic pairs and gain yields of > 50% . In fact that's what I'm doing with $40k currently and earning roughly $100/day passive income.. sheesh don't tell anyone..
Title: Re: What would you do with 100k
Post by: Radagast on September 03, 2021, 02:23:07 PM
When this thread started I thought that 100k windfalls were something that could never happen to me. But, thanks to a cash-out refinance, I can see what I would do in reality!

I would put $100k in 50% SCHX and 50% in VEA (two very boring and very tax efficient US and international index ETFs) and use that to go chase various brokerage sign-up bonuses. I would put any leftover in VWALX and add enough spare change to get the admiral shares.

Yay!
Title: Re: What would you do with 100k
Post by: Radagast on September 03, 2021, 02:24:41 PM
I would invest it into DeFi Liquidity provider positions on the Polygon platform using Ethereum/USDC or Ethereum / Matic pairs and gain yields of > 50% . In fact that's what I'm doing with $40k currently and earning roughly $100/day passive income.. sheesh don't tell anyone..
If you have a link or three I am actually interested in learning more.
Title: Re: What would you do with 100k
Post by: Jack0Life on September 04, 2021, 12:02:50 AM
I'm in the same boat right now. Just closed on a cash out refinance with $100k.
Already put $44k to use yesterday when Abbvie took a plunge. Bought 400 shares ~$110.
Trying to figure out what to do with the rest. Really want to just put the rest in Indexes but the market is scary high right now.
I own Abbvie too, but I got in at $80 a share.


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Yeah I have bought and sold Abbvie many times over during the pandemic.
This time around I decided to hand on to some for the dividends. Just a way to diversify.