3 ms·

For me, the opposite. $50m is about 100x more than I could ever need, so I'd just stick it in $SPY until I die. Volatility is irrelevant as there is no actual r

For me, the opposite. $50m is about 100x more than I could ever need, so I'd just stick it in $SPY until I die. Volatility is irrelevant as there is no actual risk to life or limb, only the "risk" of numbers going up or down.

tamana 11y ago
If you really don't care about the money, you could donate it and let it be someone else's concern.
- thatcat 11y ago
  You have the money so you don't have to care about the money; if you gave it away, you'd be stuck caring about money again.
vehementi 11y ago
Agreed, it's super weird to see that keep getting mentioned, that you need to minimize the volatility of your extreme fortune. Why? Are you planning to liquidate the extreme fortune in the next 1-5 years? ...
- barney54 11y ago
  I think the argument is really about passing it on to your kids. That's the desire to keep the extreme fortune together.
  - vehementi 11y ago
    Yes but minimizing volatility and doing the right tax/inheritance things are orthogonal...
tomc1985 11y ago
Just remember that by doing that, you're betting on the US economy's perpetual growth, as diluted by outside influences (like China...) If increased globalization stands to average global wealth (which it seems to be, except for the 1%) then I'm not sure growth is a good bet, over the long term. SPY, QQQ, etc only go up as the economy goes up...
mcjon77 11y ago
Definitely agree. IIRC, the biggest yearly loss for the Dow was 52% in 1931. While I would HATE to lose 50% of my wealth, the point is that with $50m I can EASILY ride that loss out and give it time to recover in a few years. Now, if I only had $50k in the market and was planning on using all of it on a big purchase that particular year (e.g. home down payment, child's college tuition), a 50% loss could be devastating. Volatility doesn't seem to have as much power when the potential losses are not great enough to cripple you.
morgante 11y ago
> $50m is about 100x more than I could ever need That's precisely why wealthy investors want to minimize volatility. They don't need their wealth to grow (they already have more than they need), but they definitely don't want it to disappear. Also, I must say that $500k really isn't that much money—it's not even enough to retire.

tamana 11y ago

If you really don't care about the money, you could donate it and let it be someone else's concern.

thatcat 11y ago
You have the money so you don't have to care about the money; if you gave it away, you'd be stuck caring about money again.

vehementi 11y ago

Agreed, it's super weird to see that keep getting mentioned, that you need to minimize the volatility of your extreme fortune. Why? Are you planning to liquidate the extreme fortune in the next 1-5 years? ...

barney54 11y ago
I think the argument is really about passing it on to your kids. That's the desire to keep the extreme fortune together.
- vehementi 11y ago
  Yes but minimizing volatility and doing the right tax/inheritance things are orthogonal...

tomc1985 11y ago

Just remember that by doing that, you're betting on the US economy's perpetual growth, as diluted by outside influences (like China...) If increased globalization stands to average global wealth (which it seems to be, except for the 1%) then I'm not sure growth is a good bet, over the long term. SPY, QQQ, etc only go up as the economy goes up...

mcjon77 11y ago

Definitely agree. IIRC, the biggest yearly loss for the Dow was 52% in 1931. While I would HATE to lose 50% of my wealth, the point is that with $50m I can EASILY ride that loss out and give it time to recover in a few years. Now, if I only had $50k in the market and was planning on using all of it on a big purchase that particular year (e.g. home down payment, child's college tuition), a 50% loss could be devastating. Volatility doesn't seem to have as much power when the potential losses are not great enough to cripple you.

morgante 11y ago

> $50m is about 100x more than I could ever need That's precisely why wealthy investors want to minimize volatility. They don't need their wealth to grow (they already have more than they need), but they definitely don't want it to disappear. Also, I must say that $500k really isn't that much money—it's not even enough to retire.