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Ask HN: What would you do with $2.5M?

• hoodoof 9y ago
  How old are you? I'd try not to spend it. I made good money when young and as a result did not appreciate how hard it is to get. So I spent it, assuming (reasonably, but incorrectly I think), more would come. I wish I'd hung onto it.
• DanBC 9y ago
  I'd assume I'm going to live another 35 years. That means I'd dump most of it into a variety of savings, and live off $70k a year.
• kstenerud 9y ago
  Step 1: Put it into diversified investments designed to beat inflation + a good yearly income. Technically I'd only actually need 40-50k/y for everything I want, so 2.5M is on the high side. Step 2: Work full time on my open source projects that I haven't been able to devote enough brain power to.
• gigatexal 9y ago
  Send it all to me ;)
• msie 9y ago
  Pay off my debts. Rent. Work on my own projects. Sell off as many as my things as I can. Travel.
• scarface74 9y ago
  I would pay off our house and all of our debts, give my parents enough to pay off the little debt they had and for them to go on some nice trips. Buy a house for my older son and set some aside for my younger son. I would put the rest in diversified investments and keep working and keep putting money out of my paycheck aside for retirement. I am a developer and like what I do for a living. My wife would probably still work for the health benefits but she already doesn't work during the summer, she might go half time. We would probably take nicer vacations and have a little bit better cars but I don't see our lifestyle changing drastically. And no, we are by no means "rich" but we earn a decent enough income that more money wouldn't affect our lifestyle too much.
• malux85 9y ago
  I would invest it in growing my startup. I have got a sales pipeline of > 750K USD in the works that I am having trouble servicing, having self funded so far it's difficult to do an exponential jump without funding, even with an exceptionally high amount of automation. I might need to make some phone calls soon to investors, but 2.5M tomorrow would help a lot!
• DoreenMichele 9y ago
  I would invest in real estate. I would become a (for profit) provider of affordable housing and get my name dragged through the mud as a slumlord instead of being lauded as a friend to the poor and someone reducing homelessness. Cuz that's the lovely way the world works. I would also pay cash for a small house for myself.
• newman8r 9y ago
  I'd buy more property with a nice ranch house on 20-30 acres in the California desert (max $300k), invest the rest and pull out small amounts to fund my startups as needed. Basically I'd be doing the same thing, but nicer.
• johnnyRose 9y ago
  I would pay someone to diversify and invest it for me. Assuming a 6% return rate (on average), the principal would generate approximately $150,000/year in interest. Obviously more if you reinvest some of it. Eventually I would probably dip into the principal to afford a nice home with some land somewhere. I haven't settled on the details yet. Honestly, the most valuable part of this would be that my time is freed up to work on things I'm passionate about.
• psyc 9y ago
  Without any doubt, I would buy a small house in the midwest, put the rest in index funds, and live comfortably for the rest of my days, working on exactly what I want to.
• quietthrow 9y ago
  So you work at Dropbox huh?? :) sorry couldn’t help myself lol. Invest your money in a way that secures your financial freedom till the day you die at 4-7% yearly withdrawal rate. Assume you live till 100. If anything is left build a school in a poor country and bring whoever you can out of abject poverty. Cos only people like you can help them. They can’t solve these large problems when they are focused on just surviving day to day. You can be doing well while doing good.
• paulcole 9y ago
  Nothing. I hate working and would do nothing except read books, exercise, and watch tv until I died. I took 2 years off in my 20s to do this and it was heaven. Now I have a chronic illness and have to work for the insurance. At some point I’ll be fed up with it, take whatever money I’ve saved up and just live until it runs out.
• ha-shine 9y ago
  I would buy a cheap condo here in Singapore. Rent it out and become a digital nomad.
• allwein 9y ago
  I would invest half of it in low risk mutual funds and then take the other half over to my friend Asadullah who works in securities...
• cimmanom 9y ago
  I'd consider it a head start on my retirement fund - a chance to retire a few years early - and invest at least 90% of it accordingly. I'd use the rule of thumb for windfalls: allow yourself to spend 5-10% of it to celebrate. That said, there isn't much right now that I'm interested in spending money on all at once. Buy that laptop I've been holding out on. Maybe take nicer vacations than usual for a few years. Maybe help my parents pay for some renovations they weren't sure how they'd afford. I wouldn't change anything else about my life. Increasing ongoing expenses defeats the point of investing it towards retirement; and there aren't many areas in which a modest increase in expenditures would create a corresponding increase in happiness. Whereas retiring at 60 instead of 65; having more of my life in good health without having to work... that's the best thing I can imagine.
  • scalesolved 9y ago
    A head start?!? Where in the world do you live and what figure of savings would you need to be able to retire?
  • deanmoriarty 9y ago
    I seriously hope you're joking and you're just being provocative right? In what world or lifestyle $2.5M after-tax is just a "head start" or "a chance to retire at 60 vs 65"? By investing it in traditional index funds, at a relatively safe withdrawal rate of 4% it would allow you to pull $100k a year in perpetuity (adjusting from inflation each onward year), most of which taxed at a ridiculously low rate, or none at all.
    • cimmanom 9y ago
      Expecting reliable 7% returns seems extremely optimistic to me (I'm fairly certain our 100-year growth rate cannot and will not be sustained). Certainly the market hasn't returned that much during my lifetime. If the stock market returns 4% instead of 7%, you'd need $10M in the bank to keep up with 3% inflation and return $100K/yr. $5M for $50K/yr. And one typically moves one's assets into lower-risk/lower-return investments as one approaches retirement. Given my family's longevity, I need to plan for survival till about 100 y/o. With increasing costs over time due to aging-related costs (even if I spend $50K/yr now, paying for assisted living or home aides plus of course medical care could easily bring that up past $100K). And an assumption that social security will not exist in any meaningful form by the time I reach retirement age. Yes, 60 vs. 65 was an enormous exaggeration, but right now I intend to save nearly $100K for every year of planned retirement. $2.5M would cover 25 years of retirement. At $50k/yr in savings, that leaves me with 2 years of work for every year before 75 I want to retire. So: I still need to work another (2/3 * (75 - $current_age)) years (minus savings too date, of course). Without the $2.5M, the equation would be (2/3 * (100 - $current_age)). So it allows for retirement ~17 years earlier than originally planned. And yes, saving that much is unrealistic for the vast majority of Americans. I suspect we're headed for an enormous retirement-related social/economic crisis in the next few decades.
• SirLJ 9y ago
  stock trading robots and turn the money into billions :-)
• siquick 9y ago
  Clear debts and travel.
• slipwalker 9y ago
  ( hire a finance advisory firm ) but, in broad strokes: 1/3 on fixed interest rates investments ( bonds, probably ) 1/3 on real state ( preferably on low income areas, small condos, easy to rent ) 1/6 on high risk ( crypto currency, penny stocks ) 1/6 on high liquidity ( savings account on variable but low interest rate ) for some quick opportunity that might arise. don´t touch the principal, EVER ! live out of interest.
  • bsvalley 9y ago
    Looks like I'd need a few down payments to invest in rental properties as well as raising my debts. Unless I'd pay these rental properties cash. Which means I have to touch the principal in that scenario. I'd pay income tax on those gains so I better nail that one down. Investing in crypto means converting some of that principal into money I could afford to lose. So 'technically' speaking there would be no income from that. Savings account don't give much, we're talking pennies here. Seems that bonds is the most stable, reliable source of lazy/passive income, but it's very small compared to the average cost of living in the US. So, ultimately I'd go back to my principal to cover some expenses...
• GoldenMonkey 9y ago
  What you do with $2.5M. The position of FU (John Goodman, The Gambler). https://youtu.be/xdfeXqHFmPI https://youtu.be/xdfeXqHFmPI
  • bsvalley 9y ago
    haha! good one
• jotjotzzz 9y ago
  I think I would do the following: 1. If you have debt (aside from mortgage) -- pay it off, this includes student loans, credit card debt, car loans, etc. 2. Do you own a home? If yes, consider if paying off the loan makes sense, note that it is better to own your home outright. If no, set aside money for a down payment on a house. Rule of thumb for rent vs. buy -- you are thinking of living in the house for 5+ years. Rent otherwise (see #5). 3. Do you have a will or an irrevocable trust? Consider setting one up. 4. Are you ready to retire or not? Create a diversified portfolio to ensure you keep the money you have based on your retirement goals. 5. Continue with the same comfortable standard of living you always have. Don't upgrade your lifestyle too much and don't accumulate liabilities/debt. Invest your money in assets. 6. Do not advertise your wealth. Practice stealth wealth (wrote about this on my blog).