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Ask HN: What to do with $1 million

3 points by justatestacct 16y ago

Posting from a fake account... My friend has just about $1 million (inherited) in cash (well, it's being managed by a money manager right now, so it is being invested in I believe index funds and bonds, but it could become cash quickly). He's in his early 30s. Good job-- $125k/year or so in bay area. Not a hacker, but generally interested in computers. No family yet. He is somewhat risk-averse, however. The question: what should he be doing with his money?

tlammens 16y ago
keep the money invested (maybe in lower risk products) and enjoy life? ;-)
eof 16y ago
That is so dependent on what he wants to do. Does he want to quit his job and shoot for the stars? Does he want to retire in 10 years? Does he have a family? Being risk-averse and getting a 10 year income windfall really says to me, fucking live it up. You can retire on that in some countries, keep and orchard and live like a king. Personally I'd buy a small estate in a nice part of a shitty country with decent prospects for getting back and forth to the states. I'd look to buy things that are simultaneously fun/useful and investments. I would definitely quit my job unless i loved it and spend years and a couple hundred k figuring out how to make a living what I love doing.
dstein 16y ago
Assuming he wants to invest it but has little experience with money he should keep most of the money where it is, for now. Maybe take $20,000 out and put it into a brokerage account and start learning to trade with it. IF and only if he's able to successfully trade that $20K and turn it into $40K or more, over a 2 year period then should he even attempt to trade with larger amounts. You need the discipline, and the experience of being wrong to truly understand money management.
byoung2 16y ago
I would definitely pay off as much debt as possible...hopefully with a $125k/year job he has kept debt to a minimum, but just in case he has credit card debt, student loans, car payment, etc., I would pay these off. If he's risk-averse, he probably has little experience with investing, so the money is probably fine where it is.
- justatestacct 16y ago
  He has no debt.
Scott_MacGregor 16y ago
He might want to use some of it to buy a nicer house. Real estate is low priced right now. If he waits, the house prices may outstrip his after tax cash gains from investing.

3 points by justatestacct 16y ago

tlammens 16y ago

keep the money invested (maybe in lower risk products) and enjoy life? ;-)

eof 16y ago

That is so dependent on what he wants to do. Does he want to quit his job and shoot for the stars? Does he want to retire in 10 years? Does he have a family? Being risk-averse and getting a 10 year income windfall really says to me, fucking live it up. You can retire on that in some countries, keep and orchard and live like a king. Personally I'd buy a small estate in a nice part of a shitty country with decent prospects for getting back and forth to the states. I'd look to buy things that are simultaneously fun/useful and investments. I would definitely quit my job unless i loved it and spend years and a couple hundred k figuring out how to make a living what I love doing.

dstein 16y ago

Assuming he wants to invest it but has little experience with money he should keep most of the money where it is, for now. Maybe take $20,000 out and put it into a brokerage account and start learning to trade with it. IF and only if he's able to successfully trade that $20K and turn it into $40K or more, over a 2 year period then should he even attempt to trade with larger amounts. You need the discipline, and the experience of being wrong to truly understand money management.

byoung2 16y ago

I would definitely pay off as much debt as possible...hopefully with a $125k/year job he has kept debt to a minimum, but just in case he has credit card debt, student loans, car payment, etc., I would pay these off. If he's risk-averse, he probably has little experience with investing, so the money is probably fine where it is.

justatestacct 16y ago
He has no debt.

Scott_MacGregor 16y ago

He might want to use some of it to buy a nicer house. Real estate is low priced right now. If he waits, the house prices may outstrip his after tax cash gains from investing.