Getting $1Million, how to make it last

[cptacek]

Good advice, scrf.

Me, I would sit on it for a while. You don't have to decide what to do immediately.

I would probably want to invest it and not touch most of it for about 10 years...which should double it to $2 mil, especially at these rock bottom stock prices! Then, at 4% withdrawal, I could get $100,000 every year and not touch principal at all.

[LuxLiving]

At that young age I'd probably do something to lock it away from myself for a few years! And before I did too much of anything with it would be getting myself a good financial education and VERY VERY CAREFULLY selecting a financial planner. And perhaps after studying for myself deciding that no body can plan better for my life than myself. Keeping that capital intact would be of utmost importance and only spending interest would be a priority for me. Try not to kill the golden goose.

[Broken Arrow]

... i would say municipal bonds

Typically, I'm wary of overly-simplistic answers... but this may not be that far from the truth.

Your two biggest killers is going to be 1) Your shopping impulses 2) Capital gains tax.

There are also initial taxes of some kind which can't be avoided, but the two above can.

[jasonnoguchi]

Buy government bonds. period.

100% capital protected semi annual cashflow and you won't have to even think about it.

[LuxLiving]

re: govt. bonds - "you won't have to think about it."

????????

...unless you're me, and you'd stay up all night worrying if that particular government's $ was about to go belly up.

In ref to US govt. bonds, yes, they've been VERY SAFE thus far. Going forward? I'm not as sure as I once was.

[jasonnoguchi]

re: govt. bonds - "you won't have to think about it."

????????

...unless you're me, and you'd stay up all night worrying if that particular government's $ was about to go belly up.

In ref to US govt. bonds, yes, they've been VERY SAFE thus far. Going forward? I'm not as sure as I once was.

On a long enough time span, EVERY currency goes belly up. If that's the point of contend, then the only thing you can do with a million is to buy and stock up gold bars AT HOME. That's useful when WW3 happens, is it hasn't already.

On a "which if" basis, investment has no value.

Put money in bank: What if bank goes belly up? So many has gone belly up, how do you guarantee that yours won't?

Buy government bonds: What if governments default? what if currencies go under?

Buy stocks: what if company goes belly up? what if market crash? what if currency go under?

Keep cash under your pillow: what if thief visits? what if rats got to your cash?

Keep gold bars at home: what if thief visits? what if neighbours rob?

Buy real estate for rental residual income: what if property prices tank? what if tenant defaults? what about maintenance and tax?

ALL of the above has happened at least once in my lifetime, not on me fortunately (except market crash). In that kind of world, its best not to have that million in the first place. Agree? (this is actually when investment professionals like myself tell you to just surrender the money to us cos we apparently has a better plan for it than you have... NOT!)

If the USD goes under, no assets are safe because everything is still USD linked. Vote RMB as the next world currency? maybe.

Maybe you can advise us all what is the "safest" investment to do with a million now.

You mentioned "keeping the capital safe" as the utmost important thing for the OP, so, let me ask you. Which capital carrying vehicle is "safe" in your opinion? Bank saving account? How about currency risk? how about inflation risk? the longer you keep cash in the bank, the lesser capital you have, surely you should know that. Within less than 2 years, you will see inflation hit the headlines all over the world. So, what is safe?

If you have been to finance school, surely you know EVERYTHING is subject to primary, systemic and idiosyncratic risk. There is no such thing as "safe". For unsophisticated investors like the OP, the only way to protect the money against himself and to protect capital value against inflation and still not have to make sophisticated investment decisions is to invest in bonds such as the TIPS. That way, not only will he have no access to the cash, capital value can also be protected against inflation.

[Inkstain82]

If you are genuinely worried about the U.S. dollar going belly-up, your best investment would be a nice country home with a large basement full of non-perishable food supplies, guns and ammunition. Those would have a lot more value than gold in an apocalyptic scenario.

[jasonnoguchi]

If you are genuinely worried about the U.S. dollar going belly-up, your best investment would be a nice country home with a large basement full of non-perishable food supplies, guns and ammunition. Those would have a lot more value than gold in an apocalyptic scenario.

hahahhaha, can't agree more! ok! indeed, nothing beats a self-defended and self-sustaining fortress!

** Just curious... what kind of food supply is "non-perishable"?

[disneysteve]

** Just curious... what kind of food supply is "non-perishable"?

Canned fruits, vegetables, pastas and meats.
Dried pasta and other dehydrated products.

Lots of stuff isn't perishable.

[LuxLiving]

jason said:
"Maybe you can advise us all what is the "safest" investment to do with a million now."

Nope. If you read the rest of the forums, you'll note elsewhere I've mentioned that we do take all those risk scenarios into consideration when we make our asset allocations.

The stability of the US government backed investments is of concern to us at the moment. We will likely make a foreign currency play in our next reallocation process.

But, I am not a financial planner, and it has never been my intent to play one here. May be you are one? If you'll notice when I replied to the OP, t'was saying what "I" would do.

Having just inherited not one but two large sums of money, the answer is no, Jason, I don't believe we'll be handing over our money to you. And, I would rather have the people in my life than the money they so nicely bestowed.

FYI: I would consider myself to have a fairly high risk tolerance, however, that does not stop me from considering all those doomsday scenarios you so nicely laid out for us when we decide where to put our dollars - and right now the actions of the current WH administration have me very concerned.

[Broken Arrow]

I haven't really looked at the thread, but here's a recap of what the OP wanted:

Ok...long story short...I am inheriting 1 million dollars March 31. What is the best way to receive monthly payments? How much can I expect a month? I am 24, and just want monthly payments to increase my monthly income.

Notice the emphasis on a monthly income.

Inheriting that 1 million may also involve paying some kind of income tax on it, so he may not get the full amount. The details will also vary depending on states.

Right now... there's not a whole lot out there that will give you both capital preservation and a monthly interest payout, much less a high interest rate. The truth is, the simplest thing here may be online savings accounts. Have several of these accounts filled to the FDIC limit, and then have the dividend interest automatically transferred to his central checking account.

The "upside" to this is that not only does it provide what the OP is looking for, but it also "parks" his money for now until he decides what to do later, if anything. If so, the foundation is also set for him to convert some of this cash for investment.

For what may realistically amount to $500k after taxes, I think that's as good a way to start out as any.

[jasonnoguchi]

Canned fruits, vegetables, pastas and meats.
Dried pasta and other dehydrated products.

Lots of stuff isn't perishable.

Last time I checked, all of these has expiration dates stamped on the cover... correct me if I am wrong.

[jasonnoguchi]

jason said:
"Maybe you can advise us all what is the "safest" investment to do with a million now."

Nope. If you read the rest of the forums, you'll note elsewhere I've mentioned that we do take all those risk scenarios into consideration when we make our asset allocations.

The stability of the US government backed investments is of concern to us at the moment. We will likely make a foreign currency play in our next reallocation process.

But, I am not a financial planner, and it has never been my intent to play one here. May be you are one? If you'll notice when I replied to the OP, t'was saying what "I" would do.

Having just inherited not one but two large sums of money, the answer is no, Jason, I don't believe we'll be handing over our money to you. And, I would rather have the people in my life than the money they so nicely bestowed.

FYI: I would consider myself to have a fairly high risk tolerance, however, that does not stop me from considering all those doomsday scenarios you so nicely laid out for us when we decide where to put our dollars - and right now the actions of the current WH administration have me very concerned.

Yes, the USD is a concern now. In fact, I don't think the USD is going to last very long and would likely go into default to be replaced by something else... maybe the Amero? That will probably allow the US to default on all of their USD based debt, thus wiping out the huge debt in one go. well, just my guess. But if a USD default really happens, we are all in trouble and that is the next big financial crisis that I wrote about in my other recent writings.

I have reallocated a significant portion into RMB the past 6 years for some unfair stability...hahahhaa... yes, I think the RMB will survive a USD default since its not pegged to it in any ways directly or indirectly. But hey, the chinese government has changed hands at least once in a hundred years or so for the past 5000years, so...hahahah nobody's safe from doomsday scenario, not even RMB.

anyways, its been a fun brain exercise with you here.

[thekid]

At 24, I would not focus on monthly withdrawls. Having 1M$ to invest long term at 24 is a MEGA opportunity for you to build up some very serious capital.

I would be much more inclined to go with a long term diversified mix of stocks and bonds, reinvesting income and gains to grow that capital.

You can have a nice multiple of that 1M$ by the time you are forty rather than just start living off it at 24 and slowly wasting it away.

Somebody's hard work and savy has given you a wonderfull opportunity to make something grand for you and your future family. I would hate to see you throw that away.

[cschin4]

I would put it away in a fairly safe investment and just allow the interest to come in and spend however you want. Leave the principle untouched and then go about your life as planned.