How would YOU invest $1 Million?

[investforwealth]

This is a purely hypothetical question, and is not a solicitation for advice. I am interested to know how you would invest one million dollars. Suppose you were a professional person, earning an average salary and suddenly had $1M.

Although it's completely irrelevant, if it helps to set the scene, you can imagine that you came up with an idea or invention that had commercial application but didn't want to develop it yourself. You approach a few parties you think may be interested in your idea and end up selling the intellectual property outright to the highest bidder, for a million dollars.

What do you do with the money? Some people might go blow some or all of it on things they've always dreamed of having... fast cars, first class round-the-world trips, etc. then go on living their life the way they used to. I imagine ASF participants are a bit smarter than that, though, and would like to see it grow substantially before they go spending some of it on luxuries.

Obviously there is no wrong or right answer, and the question is very subjective. There will probably be as many different ideas as there are responses.

As for my own opinion, the anwer is... I just don't know! I'd certainly be investing the majority of it, if not the entirety, but I'm not sure where or how.

 

[CanOz]

Re: How would YOU invest $1 Million

This is a purely hypothetical question, and is not a solicitation for advice. I am interested to know how you would invest one million dollars. Suppose you were a professional person, earning an average salary and suddenly had $1M.

Although it's completely irrelevant, if it helps to set the scene, you can imagine that you came up with an idea or invention that had commercial application but didn't want to develop it yourself. You approach a few parties you think may be interested in your idea and end up selling the intellectual property outright to the highest bidder, for a million dollars.

What do you do with the money? Some people might go blow some or all of it on things they've always dreamed of having... fast cars, first class round-the-world trips, etc. then go on living their life the way they used to. I imagine ASF participants are a bit smarter than that, though, and would like to see it grow substantially before they go spending some of it on luxuries.

Obviously there is no wrong or right answer, and the question is very subjective. There will probably be as many different ideas as there are responses.

As for my own opinion, the anwer is... I just don't know! I'd certainly be investing the majority of it, if not the entirety, but I'm not sure where or how.

I would try to learn more about property, and then try to buy good income generating property at good value with some of it, enough to earn a decent income.

I would build a new home, in a good undervalued area to live...and then i would trade with the rest.

A bit more general than you were looking for no doubt, just got dreaming a little.

Cheers,

 

[new_trader1984]

Re: How would YOU invest $1 Million

Hi investforwealth,

Im at uni currently studying financial planning, my main assignment for the subject was to invest 1 million dollars that a couple had just inherited over 5 years into 4 investments.

Its similar to what your asking, except had set amounts of the 1 million for the diffrent investment choices. I had to invest int property with growth and income with only 200,000. Bonds and shares with 300 000 each but the shares were all dividend paying shares that i was allowed to choose for income earning purposes. Also the last investment was cash management trust.

I guess the assignment was to show us different investments available that could be invested into to earn income and capital gains after a set period of time. The case study that we were provided with had goals for the family that planned to retire in 20 years.

Depending on the time frame you want to invest the amount of money in would limit your choices. Longer time frames would allow many different investment choices from bonds shares property. Shorter time frames shares and cmt i think are good since can get access to the money if needed in a short amount of time compared to property.

If i had 1 million i would probably buy 2 small rental properties that were close to the beach and very popular holiday places, aim for a good rental return from each, possible to find a couple of good places around 200-250 grand since i found one for my assignment a 1 bedroom unit 50 meter from beach returning 220 a week for 200 000. Would invest the other 500 000 into short term and long term stocks maybe 300-400,000 in short term trading so can make most of opportunities when find them, and the other 100 000 in stocks that are maybe speculative but with good long term goals.

Thats what i might look at doing if i had a million dollars to invest.

 

[tech/a]

The answer is relatively simple.
But determinate upon the age of the person with the Million.

Mind you a Million isnt a great deal of money these days and in 10-15 yrs time wont be the benchmark for success it has been---3 to 5 will be!.

(1) Positively gear with the view of passive income. This can be a variety of investments from Business to Property to Shares to Art---(buy and rent out).

(2) Look to have the investment returning a passive income returning capital growth---at least ahead of inflation and general market conditions.

(3) Gearing into those investments will be determinant on AGE and on OPPORTUNITY. Remain flexible---always (in my view) have the ability to borrow against equity.

(4) I would be looking to sensibly gear around 2-2.5:1 this way maximising return. In other words putting the Million to work!

Importantly--Remain in COMPLETE control of your funds,dont invest in any developements/investments unless they are your own.

 

[nizar]

I would trade the lot.
Yes, seriously.

People think properties more "solid" or whatever but thats very old fashioned thinking.

Indivisible and illiquid just doesnt appeal to me.

(actually i would get a house for myself, probably spend about 500k on that, not for investment purposes, but because i need a place to live)

 

[CanOz]

I would trade the lot.


(actually i would get a house for myself, probably spend about 500k on that, not for investment purposes, but because i need a place to live)

Can you imagine that trading room!

 

[professor_frink]

I would trade the lot.
Yes, seriously.

People think properties more "solid" or whatever but thats very old fashioned thinking.

Indivisible and illiquid just doesnt appeal to me.

(actually i would get a house for myself, probably spend about 500k on that, not for investment purposes, but because i need a place to live)

Would you stick with the small caps though Nizar?

 

[Realist]

Okay assuming you already own a house you live in and love outright, and you've got a car and got holidays booked etc. and you have $1M in cash spare I would invest it along these lines roughly.

$300K into a $700K investment property (along with a $400K mortgage that the rent pays off)

$200K into 10 or so high dividend bluechip Aussie shares. Reinvest dividends.
$200K into 10 or so bluechip US shares. (your coca cola, Proctor and Gamble, etc.)
$100K into 10 or so speculative shares (mining, IT, scientific companies yet to make a profit)

$200K in 3 different high interest yielding term investments, preferably one or 2 outside of Aus.


That's it...

So I would buy 30 or more different shares, focusing mainly on dividend yield.

I'd always keep about 20% in cash (high interest bank account).

 

[kevro]

I would invest 900k in booze, women and song. The rest I'd just waste.

 

[nomore4s]

I would invest 900k in booze, women and song. The rest I'd just waste.

lol, can I join you

 

[kevro]

lol, can I join you

Sure, no probs, BYO $million

 

[nizar]

I would invest 900k in booze, women and song. The rest I'd just waste.

haha... george best... watta legend...

 

[Julia]

I'd buy STC a house!

 

[nomore4s]

I'd buy STC a house!

lol, He'd probably sell it and put the money into his super.

 

[nizar]

lol, He'd probably sell it and put the money into his super.

LOLOLOL
Great call champ!

 

[YOUNG_TRADER]

haha... george best... watta legend...

He gives me something to work towards

 

[kevro]

He gives me something to work towards

hi YT, if you plan on following in George Bests footsteps I would consider hiring a stunt liver to handle the more advanced sessions until yours is up to it.

 

[investforwealth]

I'd buy STC a house!

How sweet are you! It would be a pretty nice house for a million dollars. Probably not quite as nice as John Symond's new place, though!

I probably should add some qualifications to this hypothetical to create a level playing field... some of the comments posted already have highlighted the fact that I've omitted some important info.

Let's suppose that you're 25-30yo and have a fairly high tolerance to risk. After all, if it all falls in a heap, you can go back to your professional job and life will go on.

Living off your investments, whatever they may be, is probably preferable to working for someone else, but you know that whatever investments you make, there's going to be some sort of "work" involved in managing them. I guess retirement would be something you'd think about when you had made enough so that you could live comfortably from passive income alone.

 

[YOUNG_TRADER]

hi YT, if you plan on following in George Bests footsteps I would consider hiring a stunt liver to handle the more advanced sessions until yours is up to it.

I'm training mine as best as I can , you hiring yours out?

 

[Dukey]

hi YT, if you plan on following in George Bests footsteps I would consider hiring a stunt liver to handle the more advanced sessions until yours is up to it.

Guys - if you study tissue culture on the side - you could probably grow your own spares in the fridge!!! :bonk: