[Tom M]

Originally Posted by Malsua

Has there been inflation since 2010?

Had you bought $4000 gold then, your returns would be....-7%.

Had you spent $4000 on bitcoins, you would be a billionaire.

Where did you get your gold price data? I believe gold was about $1,100/ounce in 2010 and is (as I write this) $1,763/ounce.

[Blueblaze]

A million bucks sounds like a fortune.

Withdrawing $40K/year in a 5% inflation environment, while making 0.3% in a government-insured savings account, it lasts 18 years. Add in his Social Security check, and he's probably good for life. Why risk anything?

Because, if he put it in a "balanced" portfolio like RetiredGuy123, he probably wouldn't even touch the principal, and his kids get rich some day.

Of course, that assumes there's not another crash like the four we've all seen in our own lifetimes that took 50% off the table. I had a widely diversified bond portfolio during the Covid crash just last year. It lost 15% IN ONE DAY. So much for "bonds are safe". No matter where you put your money, you're exposed to the dumbassitude of the dumb masses.

Let's say you've got a balanced portfolio making 7% overall, and there's a 50% crash in 2022. That 4% you can't stop withdrawing will eat up that nest egg in 20 years -- about the same as if you didn't risk anything.

Of course, this all assumes that the FED is successful at holding their new inflation target of 5%. Most of us are old enough to remember the last time inflation hit 5%. It went to 20%. I bought my first house at the end of the Johnson-Nixon-Carter inflation. It cost me an 18% mortgage for Reagan to put an end it.

What does 20% inflation do to your million dollars if it takes 20 years to find a man with the guts to end it? Invested, it's gone in 11 years, or 8 years in cash.

So the answer is gold, right? Really? How safe is a million dollars worth of gold stacked in your closet? OK, so buy stock in a company that claims to stack GLD in a bank. Now we're back to the dumbassitude of dumb masses problem.

Crypto? Seriously? You'd put your life savings in a made-up currency backed by imaginary numbers in a computer, that's not recognized as currency anywhere in the world, and can swing 50% in a month? Have you considered the "red/black" option at Vegas? Less risky and more fun!

The only thing I know of that holds value in an inflation is THINGS. Like REAL ESTATE.

Put a third of that million in real estate and leave the rest in cash. In 11 years, when the cash is almost gone, sell the real estate for 3 million. If nobody fixes inflation, you're good for another 8 years, which is probably enough. On the other hand, if inflation never gets out of hand, cash in your real estate in 15 years and it'll last another 10. More than enough. And if we ever again see 2% inflation, it lasts forever, as far as you're concerned.

But if you're like most of us who don't have a million bucks in the bank... good luck with that! If this country ever sees 20% inflation again, it'll probably go to 2000% in no time, and a stack of bullets in your safe will do you more good than a million in gold. But under that scenario, you could probably save yourself a lot of trouble by just buying one for yourself and one for the missus.

[noslices1]

He COULD double it if he goes to Vegas and puts it all on BLACK at the roulette wheel, but has a 50/50 chance of losing it too.

[Boomer]

Originally Posted by manaboutown

Believe it or not I am asking for a rather wealthy friend who happens to have $1M cash lying around earning him next to nothing and has no ideas on how to invest it. He and I have known each other since junior high and we brainstorm on various matters from time to time. I told him I had no idea and was sitting on a lot of cash myself (not anything like $1M).

Anyway I thought it might generate some creative thinking as I am out of ideas. Stocks and real estate seem at present extremely overvalued to me. Anybody have any possibilities they would care to share?

Your friend probably. . .

— Has a paid for roof over his head. (at least one)

— Does not make car payments or any other interest payments.

— Has established, dependable cash flow from income producing stocks, pensions, SS, etc.

— Does not let himself get into the position of having to sell stocks to pay taxes.

— Has a good longterm care policy (even though the company might now be playing chicken with the annual raising of rates) Or feels he can comfortably afford out-of-pocket care if the need arises. Or can buy into the highest rated CCRC he can find, if he so decides while he is still independent.

— Can project ongoing and increasing expenses like insurance, property taxes, etc., and feels like he’s got it covered without worrying.

— Can cover the things he enjoys doing with his disposable income.

— Makes sure to manage potential income tax hits — like if he has to take RMDs and is charitably inclined, uses QCDs to not add the amount of the charitable contribution to taxable income. ( and probably other things he knows far better than I do about paying attention to consequences or advantages of tax decisions)

— And, of course, is galled by that money sitting idle, but has divided his assets by the number of years he thinks he might have left and is wondering if he should just get over it and continue to maintain that moat of cash just like it is — however cringeworthy that might feel. What’s it worth to him — in subjective ways beyond ROI?

Meanwhile, you guys need to watch Consuelo Mack on her show WealthTrack on PBS. (gasp. ) A look at her website wealthtrack.com will show some of her weekly interviews with some big deal investors. You will not get any direct advice — well, maybe some suggestions — but her 1/2 hour interviews will give you some things to think about. . .and nobody yells or rings bells or is mad.

Boomer

[BlackhawksFan]

If that amount of money is just sitting around, why not start a foundation for families or people in need. I know firsthand that Covid has hurt a lot of people financially. Many, including my family, are struggling to make the mortgage, pay the electric bill and buy groceries. If it wasn't for St. Vincent de Paul Society at St. Timothy's and the Salvation Army of Sumter County we'd be sitting in the dark. Sometimes giving a family $2,000 or $2,500 gets them through those rough times. Maybe look at giving to the two organizations I mentioned they both do good work.

[waynehal55]

Originally Posted by CoachKandSportsguy

Utility ETF, because of the uniqueness of the regulated utility market in this country. Based upon statutes, the utilities are guaranteed a return on assets. With the grid needing to be upgraded to nearly twice its size for the green movement, increased CAPEX means increased profits, and then increased dividends.

These are regulated monopolies, which have guaranteed returns, and a constantly growing demand.

Feel free to DM me for one on one discussion. . .

sportsguy

I love Utilities, Vanguards utility ETF is VPU, very low cost and now yielding close to 3.00%. Today the Dow is down over 500, but VPU is up a fraction.

[Malsua]

Originally Posted by Tom M

Where did you get your gold price data? I believe gold was about $1,100/ounce in 2010 and is (as I write this) $1,763/ounce.

You're right, I meant 2011. In September of 2011 it was $1854/ounce. It's still not that today.

If you had purchased gold in November of 2010 and still had it in 2013, at no point until 2019 could you have sold it for anything but a loss.

Gold is generally a good store of value and if uncle fed keeps pumping trillions more, it'll hold it's value. That said, it's a hedge and not a particularly good one. Real estate is a much better hedge.

I think everyone should hold some PM, but like 5% at best.

[Olsenfiber]

Check out series I savings bonds. You have to buy them directly from the Federal Government by opening an account @ TreasuryDirect - Home.
You are limited to $10,000 per person/ year, but you can buy them for your spouse/kids/grandkids, etc. They currently pay 3.5% interest. You have to hold them for at least one year, but can cash them any time after that. If you cash them before 5 years, you lose 3 months of interest. Principal is always safe. They will earn interest up to 30 years. Essentially zero risk.

[HORNET]

Sounds like a Ponzi Scam

[jimjamuser]

Originally Posted by manaboutown

Believe it or not I am asking for a rather wealthy friend who happens to have $1M cash lying around earning him next to nothing and has no ideas on how to invest it. He and I have known each other since junior high and we brainstorm on various matters from time to time. I told him I had no idea and was sitting on a lot of cash myself (not anything like $1M).

Anyway I thought it might generate some creative thinking as I am out of ideas. Stocks and real estate seem at present extremely overvalued to me. Anybody have any possibilities they would care to share?

Not a good time to jump feet 1st into the Market. It is too high and due for a correction downward! Buy an ETF for bonds with 50% and leave the rest in cash or some money market. Re-evaluate that on Jan 15, 2022. Meanwhile, go to the Village investment club if that is STILL in existence. Do NOT pass GO, do NOT collect $200 or whatever that IS NOW with inflation ( and LEARN the definition of constant dollars). Time WAS your investment friend when you (we) were young - not SO MUCH now.

[HORNET]

Exactly

[CoachKandSportsguy]

Originally Posted by Malsua

I think everyone should hold some PM, but like 5% at best.

If gold was that good, it would be higher than it is. .

If you want a longer term hard asset equity play, look at rare earth metals, which will have a high demand as the battery demands increase. . Of course, these have some chinese names as China has been trying to extort some African countries to give up their mines and metals in exchange for roads, etc.

Just another long term, small amount, 2% or so, portfolio which can add alpha over the long term

futuristic guy

[Tdroels]

SOXL - I would buy a million of this stock today since it is down and watch it GROW. please send me commission check a year from now.

[waynehal55]

Originally Posted by retiredguy123

I bothers me that the Wounded Warriors Project has 16 employees who each make between $160K and $313K per year. That is more than almost every military officer.

You are correct, that's why I stopped my donations many years ago.
I added Tunnel to Towers to my list of charities, the CEO does not get a salary.

[Tkbonesdir]

Originally Posted by manaboutown

Believe it or not I am asking for a rather wealthy friend who happens to have $1M cash lying around earning him next to nothing and has no ideas on how to invest it. He and I have known each other since junior high and we brainstorm on various matters from time to time. I told him I had no idea and was sitting on a lot of cash myself (not anything like $1M).

Anyway I thought it might generate some creative thinking as I am out of ideas. Stocks and real estate seem at present extremely overvalued to me. Anybody have any possibilities they would care to share?

Side question… do you play D1 Softball?
Eddie