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Ask HN: Just cashed out for 2M. What now?

• fnazeeri 18y ago
  Brilliant! My advice is to stay in cash (or equivalent). Have patience. Wait 2-4 years and see what happens with the economy. Forget about the cash in the bank (I'm assuming you're well below normal retirement age). Set aside an amount of "play" money. Go play golf or hike Kilimanjaro or whatever works for you. Ignore "advisors" who tell you that you should invest in such-and-such. After some time, you will find things that interest you and that is what you should work on / fund. Invest in / spend time on things you love. BTW, contrats. Nice job!
  • agotterer 18y ago
    I'm not saying rush into any investments. But waiting 2-4 years is the wrong move if you are looking to get in the market. A lot of very good stocks are on serious discount either right now or in the coming months. No one knows when the economy is going to stop declining and turn around (some economists are pointing to under two years). Be smart, do your research and try not to miss out on some money making opportunities. And also congrats on your sale!
  • tc 18y ago
    My advice is to stay in cash Which would be fine as long as you aren't at all concerned about the very real possibly of hyperinflation. Be sure to pick your currency wisely.
    • Zev 18y ago
      What makes you say hyperinflation is a very real possibility? Some inflation? Sure, but thats natural. We don't exactly live in Zimbabwe (So I'm assuming at least).
      • fortes 18y ago
        Some links (not that I necessarily agree, just giving you info): http://www.videonewslive.com/view/288549/peter_schiff_on_20092010_usa_hyperinflation http://www.videonewslive.com/view/288549/peter_schiff_on_200... http://www.naturalnews.com/019659.html http://www.naturalnews.com/019659.html
    • mikkom 18y ago
      Surviving hyperinflation is easy, just hedge against all majors.
      • kirubakaran 18y ago
        Could you explain in noob terms please?
        • Daniel_Newby 18y ago
          One way is to buy long-dated call options on a broad range of issues: indices, index funds, precious metal funds, commodity funds, etc. For instance, the SPY index fund currently trades at $80. Suppose you want inflation protection for it going above $100 by December 2010, and you want to protect $250k of your money. You could buy SPY calls at a strike price of $100 expiring in December 2010. The cost of those call options would be about $8 per share. To hedge $250k, you'd need 3100 options, which would cost $25k. If the price rises into the $100-$108 range, you'd start recovering that cost. If the price exceeds $108, you'd start turning a profit. If the price popped to $175 due to hyperinflation, your profit would be ($175-$100-$8)*3100 = $208k. (BTW, options are sold in contracts of 100, so for 3100 shares you'd buy 31 contracts.) Honestly, though, I don't see this as a good idea right at the moment. The market has been volatile lately, which drives up the price of options. IMHO, inflation is not likely to pick up in North America for at least 1.5 years, so you would need to buy 2011 options, which raises the price even more. If I were going to hedge inflation, I would wait until the current stage of the collapse had reached a lower plateau, some time had elapsed for volatility to decrease and option prices to go down, then buy before inflation expectations build and drive up the cost of call options. Whatever you do, never use the various "ultralong" funds for buy-and-hold hedging. They are strictly for short-term trading. (Well, you can do buy-and-hold, but you have to wait for the price to bottom out, and pray that the fund manager doesn't burn up all the money with failed trading strategies.) Warning: I am not a professional options trader. This is not investment advice.
  • d13hard 18y ago
    Brilliant! My advice is to stay in cash (or equivalent). you'll need it to pay the IRS + state their 50% (if for example, you are a california resident). oddly enough lots of people forget about this simple fact. depending on how the deal is structured, there is a good chance that your tax bill is $1 million. oh by the way they then adjust your next year's taxes upwards and want quarterlies...so leave some money for those (you will get most of it back since your gain is non-recurring) but still, you're a millionaire. edit: whoops! i see you say you are in canada. well i suppose the tax situation is likely comparable....
    • vaksel 18y ago
      canada is probably even worse
      • cperciva 18y ago
        If he structured things properly, this is capital gains -- in which case he's probably got $750k tax-exempt and the rest is only 50% income, so his total income tax (federal + provincial) would be somewhere in the $500-600k range depending on which province he's in.
        • Tichy 18y ago
          Maybe there are ways to stretch the gains over several years by clever investment?
          • d13hard 18y ago
            nothing legal
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  • forkqueue 18y ago
    I'd very definitely disagree with the above - I'd say it's pretty certain that most of the West is going to go through a reasonably severe inflationary period, judging by economic history at least. Even if it doesn't, with interest rates so low cash is going to do nothing for you. FWIW, if you know where you want to live for the next ten years or so, buy a place outright for cash. Worst case scenario, if house prices continue falling you've still got a roof over your head mortgage free. It's probably worth putting some of your money in gold too as a hedge. I'd certainly agree with the 'play' money idea as long as your family circumstances allow.
  • petercooper 18y ago
    Your mention of Kilimanjaro was too much for me to miss this one. I discovered an old acquaintance of mine recently started up a Kilimanjaro hiking company ;-) http://www.expeditionkilimanjaro.com/ http://www.expeditionkilimanjaro.com/ - awesome guy, would recommend traveling with him.
• oldgregg 18y ago
  1) Stay liquid (ING or loonies-in-a-shoe-box) 2) Wait until the markets bottoms 3) Buy Minnesota A year or two from now people with cash reserves are going to clean up.
  • icefox 18y ago
    Bank Of America is going around like a kid in a candy shop picking up banks left and right at prices that a year ago couldn't be imagined. Wasn't it Minnesota that 1/3 of the income was from the government? Not very high growth. :)
  • zmimon 18y ago
    Just remember: almost nobody ever picks the bottom of a market right - by definition.
• mrtrosen 18y ago
  You could invest in a nice consulting company, http://www.lab305.com http://www.lab305.com, a couple guys trying to get things moving with some very good prospects in the works :) Then we could all be cashing out for another 2 million next year?
  • fnazeeri 18y ago
    This is exactly what you should NOT do!
    • mrtrosen 18y ago
      ouch ;) Of course, i was being facetious. Listen to a wise man like Warren Buffett. Take a certain amount of time, make sure you have a strong financial advisor, and make the money grow. The first million is the hardest, right?
  • deleted 18y ago
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• vaksel 18y ago
  Go take a vacation and start thinking about your next startup
  • tptacek 18y ago
    DO NOT go plow all your money into your next startup. A life mistake.
    • vaksel 18y ago
      Obviously not, personally I think you should do the second startup with the same starting capital as your first one. Once is luck, twice is skill.
      • kajecounterhack 18y ago
        Sarah Lacy?
        • sobriquet 18y ago
          why're you downmodded?
          • kajecounterhack 18y ago
            If I knew, I wouldn't have posted it. Maybe bad reaction to her because of the facebook interview... (did you see that) Oh well, I've learned not to question why i'm downmodded, haha.
      • wenbert 18y ago
        And less scary
    • mechanical_fish 18y ago
      I cannot upmod this enough. $2m is enough to retire if your costs are low enough -- even earning a measly 1% a year you'll make 20k per year, which is enough to live on if you live in the right town with the right diet. So put the money in a diversified collection of very safe assets that return a few percent, write yourself a check for the interest you've earned every quarter or so, and then forget all about it. Meantime, depending on your lifestyle, your time may now be entirely your own. Or you may need little more than a small part-time job to be happy. That time is the resource you should plow into your next venture in life. The only part of your own money you should spend on a startup is the money to hire the lawyer who will construct the corporation that will ensure that your startup cannot touch your personal money even if it is sued into dust.
• vaksel 18y ago
  You should avoid telling the people you know about this, since everyone will hound you for a handout if they find out. At the minimum under value the thing, 2 mil = you can afford to buy the person a car and you are an asshole for not doing it. 500K = you can tell them no, since you "need" the money to buy a house.
  • fnazeeri 18y ago
    Check this article on HN about the same issue (Ariba founder dealing with $1BB exit): http://www.rediff.com/money/2009/feb/18having-too-much-money-can-be-a-problem.htm http://www.rediff.com/money/2009/feb/18having-too-much-money...
    • nradov 18y ago
      Wow. It seems somehow both sad and funny that people are now making a living as professional "wealth therapists". I guess it's just another example of how decadent and wasteful our society has become.
• inerte 18y ago
  Here's what I would do if I got 2 millions reais (I am brazilian ;) - Pay some debt close family members have (parents, brothers) - Buy an apartment, in the same price range I've been looking for in the last couple months (150k tops). Would not buy something more expensive, "just because I can"; - Put everything else in the bank. 80% in the most conservative investment the bank has. 15% on middle stuff; - Travel the world for several months, maybe a year; Then come back, and look at the money again. I think one of the most important things you should do, is simply to not spend much money in the near term. 2m is lot, but it's not enough to live like James Bond. You can't sustain a lifestyle of champagne with hookers while cruising the Mediterranean on yatches. Not for more than 6 months anyway. Going for a 600k house also looks dumb to me. Or anything else too expensive that you wouldn't buy if you didn't had the 2m. Like a Ferrari. You've gotta give time to adapt to your new richness ;) You've gotta understand that you simply aren't used to have a lot of money. Not that I am personally... but I have read stories about lottery winners going to Vegas or blowing all the money on frivolities just because they now can do it. It's the last thing I want to happen to you! And congratulations :)
  • anatoli 18y ago
    Since he's in Canada, 600k would get him an OK house in a good neighbourhood or a good house in a decent/undervalued neighbourhood, not anything great... besides, he would most likely get a mortgage, so he could afford to go even higher than that. 150k would get him hardly anything, unless he lives somewhere in the middle of Saskatchewan. (I speak from personal experience, I own a loft in Vancouver.) I agree with your overall point though.
    • thenduks 18y ago
      I mostly agree, you don't want to spend less than 500K on a house if you live anywhere near a major city. But if you live outwards a bit (say, an hour from Toronto or similar) then 400K gets you a massive 3 story house in a quiet neighborhood. Depends on what you're into.
  • agotterer 18y ago
    I agree that spending (wasting?) 150K on a sports car makes little sense from an investment prospective. But what is wrong with buying a house? Its considered an investment. At some point he can hopefully sell it for more then he paid for. Additionally I wouldnt spend the majority of the money on a house, but I want to play devils advocate here.
• smanek 18y ago
  I'm a fan of the Taleb approach to investing. Put most of your money (~90%, I would say )into bulletproof stuff (Savings Account, CDs, etc), and put a little into risky things. You should be able to get at least 5% ROI on the safe stuff (in the long run, obviously considerably less than that right now), which should guarantee that you'll never fall below middle class, come what may. To counteract the current market insanity, I would strongly consider buying some inflation indexed government bonds (called TIPS bonds, in the US) with my 'safe' money. In case of inflation they could help, with no real risk (short of the collapse of the government). I know most people are worried about deflation, but I still have nagging inflation worries. As for the risky stuff, I think Detroit real estate, corporate bonds, and some dividend issuing stocks are seriously undervalued right now. I personally put a little into NRF, which is issuing ~30% dividends per year (at its current stock price). Detroit real estate isn't likely to recover soon, but I think over the next two decades or so you could potentially make a killing.
  • nandemo 18y ago
    I don't think that's Taleb's approach. His point is not simply to put a little into things like dividend issuing stocks. These might have a very good historical long-term return, but we cannot assume this will still be true tomorrow. The point is to be exposed to good "black swans": far out-of-the-money options, or biotech and YC companies, for instance. These could potentially give you a very large return. In theory this would be already priced in, but too many people assume models which don't allow for very large returns. That said, his main message is not so much how to make money, but rather how not to lose it all.
    • smanek 18y ago
      Under normal circumstances, I'd agree with you. But given the economic craziness right now, I'd say that (some) dividend paying stocks qualify at black swans. At least the market thinks so, because they value the shares so that annual dividends are 30+% of the share price. The market wouldn't allow 30% ROI per year into perpetuity on a non risky investment. In fact, assuming that the risk free interest rate is at 2%, the Net Present Value of a $1 30% annuity is $15. Which means that the market expects that there is, approximately, a 90% chance of that company going bankrupt in the near future. (Having looked over NRFs books myself, I think that the chance is considerably less than 90%. Which means, I think NRF is undervalued by the market, and hence is a bargain).
• xenophanes 18y ago
  buy some government fixed interest rate, fixed duration bonds (say 1-2 year duration) if they give you a better interest rate than ING. don't change your lifestyle too quickly. make sure all changes pass two tests: 1) it feels comfortable 2) you think its rational.
  • icefox 18y ago
    There is a cool website (don't remember the url) where you can be part of bank CD auctions. Usually the majority of winners are banks with 500KCD's, but there is often a few people who win the final scraps with only 10K CD's. Rates were 7+% when I was looking v.s. ing's 4% For a quick safe way to put money in USD it seemed like a very interesting way to go.
• len 18y ago
  buy gold. bullion if you can instead of futures. no currency is stable at this point. hyperinflation will wipe out a lot of wealth.
  • rscott 18y ago
    Not to be a bastard, but hyperinflation is a very rare and distinct phenomenon, not just to be thrown around when the economy turns sour. Real hyperinflation is occurring in Zimbabwe, not Canada or the US.
    • len 18y ago
      yes, it is rare. hyperinflation occurs in destabilized economies that have too much printed cash relative to physical assets (to oversimplify a bit). the US govt has printed too much money and keeps going further with stimulus packages and bailouts. the dollar is strong, currently, because it is the default fiat currency of the world. at some point the US will not be able to sell more bonds or the foreign creditors will dump dollars on the market or any number of other things can happen to trigger inflation. you don't have to agree, but i would bet that hyperinflation will hit.
    • jacquesm 18y ago
      It occured in Poland not that long ago, and there is a chance it will happen in other countries, if oil transactions would switch to another currency I wouldn't be surprised to see such a thing happen to the US dollar. There are some people out there that say that the Iraq war was to stop the US dollar from crashing because Saddam was going to switch to the euro for his oil transactions. I know that's typical conspiracy nut fodder, but it may have a kernel of truth.
  • icey 18y ago
    ... Not sure if you're joking or not, but gold is very inflated right now because everyone is panicking and running to it.
    • len 18y ago
      using the word 'inflated' assumes that the stock market has overreacted on the negative side. this is not the case, in my estimation. the significant spread between bullion and future contracts is also telling.
• cperciva 18y ago
  The $1M-$10M range is difficult -- it's more than most people know how to manage themselves, but it's not enough to allow you to hire someone to be your full-time money manager. Based on what you've said and not said, I'm presuming that you (a) have set aside money to handle any income taxes which you'll have to pay, and (b) don't have any immediate plans for how to spend your windfall; and your main concern at the moment is simply where to park the money so that you'll have it available once you figure out what to do with it. If I'm right about that, your primary concern should be to hedge risks -- that is, to eliminate as many possible ways that your money might vanish. Given that the biggest risks are (a) an asset price crash, and (b) hyperinflation, I'd suggest a diversified portfolio: Keep some money in cash or near-cash assets (bank accounts and cashable GICs), but split most of the money between bonds (or, equivalently, GICs) and stocks. That way, if the stock market collapses you'll have some losses but you'll still hold on to the money you put into bonds/GICs; and if inflation spikes you'll still have they money you put into stocks (since inflation makes fixed-income bonds worthless but proportionally increases the value of stocks). If you're feeling really paranoid, you might want to split your money between Canadian, US, and European bonds and stocks, just in case something weird happens and the Canadian economy falls apart while the US or European economies don't -- but my impression right now is that the Canadian economy is doing better than the US or EU economies, so I'm not sure that I'd bother with this myself. Of course, I'm not a real financial advisor, and it's quite likely that there are factors specific to you that I haven't considered -- so really you ought to be talking to an independent financial advisor. Do your own research first, and don't feel that you have to follow their advice -- but listen to what they recommend and the reasons they provide for their advice. Make sure that you're talking to an independent advisor, too, and not just a shill for your bank's funds -- if you need help finding one, I'm sure your lawyer can point you in the right direction (and unlike your bank, your lawyer can be trusted to provide a fair recommendation). I hope that gives you some starting points for figuring out what to do -- I'd be happy to talk more if you want to send me an email (google me for my email address, and put HN into the subject line so that I know it's someone from here).
  • tjmc 18y ago
    This is good advice. Also: 1. Eliminate any outstanding debt. Mortgage, credit cards, car loans etc 2. Consider buying a place to live outright. Saving rent or mortgage interest is better than earning the equivalent in interest because it's tax free. It's a very good time to have spare cash as there are a lot of bargains around. Take plenty of time and do your research.
• micks56 18y ago
  I would put my money into Federally insured bank accounts until I figured out what to do. While it may be unlikely that ING will fail as a bank, there is no reason to take that risk. Divide your money among banks to stay below the maximum Federally insured limits. Once you 1) learn what you want to do with the money, 2) get some advice that you can check and challenge, and 3) feel the time is right, move the money to wherever your analysis takes you. Dividing the money into the savings accounts just buys you time. ps. Congrats!
• sak84 18y ago
  I am confused. Why are you asking people what to do with your money when we know nothing about you? Do you want to just hold on to this money and live off the interest? Do you want to make more money by working? Would you like to invest in the stock market? Are you risk-averse? Are you willing to move? Are you charitable? etc. Basically, I'm not sure this is the right type of place to ask this question if you are going to tell nothing about yourself and what you aspire to be in life.
• access_denied 18y ago
  I'd say being a land-owner is a good move for various reasons. Seriously, do you think the situation in terms of foods and water supply is going to get better in the next decade? http://www.kottke.org/09/02/fruits-and-vegetables-getting-less-healthy http://www.kottke.org/09/02/fruits-and-vegetables-getting-le... (I don't say, put all your eggs in one basket.)
• Fuca 18y ago
  Any hint on how you made it? Congratulations anyway
  • deleted 18y ago
    [deleted]
• kbob 18y ago
  Four chicks at once.
  • kubrick 18y ago
    Do nothing. It'll be everything you knew it could be.
    • light3 18y ago
      Go all out on gold, you could have 46kg, imagine having your front door made of pure gold!
      • mkuhn 18y ago
        Even though I wouldn't use the gold to make a front door but if you look at the development of the Gold Price (http://www.google.com/finance?catid=64980108 http://www.google.com/finance?catid=64980108) it doesn't seem that unreasonable of an investment. But I wouldn't put all my money into one thing. Diversifying is key.
  • diN0bot 18y ago
    why stop at chicks? why stop at four? i'm assuming newseller is female, of course. i'm also assuming kbob didn't. can someone explain why the multiples fantasy is owned so much by the male population when it is the females that have much more flexibility and sustainability in this area. however great this situation might be for men, women stand to gain so much more. is it that women don't make such crass comments?
    • jyu 18y ago
      It's a reference to the movie "Office Space." http://www.imdb.com/title/tt0151804/quotes http://www.imdb.com/title/tt0151804/quotes
  • raja 18y ago
    http://EstablishedMen.com http://EstablishedMen.com - Who doesn't want to make like Richard Gere in 'Pretty Woman' ?
• mattmaroon 18y ago
  Well, avoiding the deeper money management issue and addressing your savings comment, I don't know what sort of depositor's insurance you have up there, or much about Canadian banks at all (other than that BMO owes me $100) but if it's anything like the US right now, I'd spread it out. I think our FDIC limit now is $250k for individuals, it shouldn't be too hard to find 8 banks. If your banks up there have no government-backed depositor's insurance, I'd take a trip stateside (if that's legal and it extends to foreigners, which again I don't really know). Putting all of your eggs in one very shaky basket would seem to be a bad plan at this point. Also, I would float me $200k to help me jump start this Ponzi scheme I have an idea for. I'll give you back $300k in a month.
  • dkokelley 18y ago
    Something to note, while in the US the FDIC coverage is $250k, that is a temporary limit to help stabilize banking and reassure depositors. Also, for whatever portion you decide to keep in a bank, have the banker talk to you about titling. An account for John Smith is covered up to $250k, but an account for John and Jane Smith is covered up to $500k, and a trust for John and Jane Smith with 3 children is even more. What I would do is put $1 million away and use the remaining $1 million to buy 11 more $90,000 businesses.
• mikeyur 18y ago
  First off, send me some cash. If you don't know what to do with it, give it to me (I'm a fellow canadian, eh). Next thing would probably be to spread it around in some high-interest bank accounts and make sure you don't go over the insured amount. But I'm not an expert. Congrats on the sale and good luck figuring out what you're going to do with all that cash.
• maximumwage 18y ago
  My advice: don't listen to suggestions from random people on the internet (though I like a lot of the suggestions in this thread). Talk to other successful sellers and a diverse selection of wealthy people and find out what they did with their money. Also, Gurbaksh Chahal's book "The Dream" has a good overview of the emotions involved in becoming rich, from the perspective of someone who sold his companies for millions of dollars.
• bullseye 18y ago
  Congratulations! I had a loosely similar experience, and here are a few things I would recommend based on what I did, and wish I had done: Tell as few people as possible, preferably just your immediate family. Resist the urge to talk about it with friends and associates. This includes offering to buy every acquaintance drinks or dinner. Pretend nothing has changed. Designate a percentage as money you will not touch... ever. Find a financial planner, which you trust, and have them help you identify low risk investments. Then, forget about this portion. I don't know how old you are, but assuming you are not at retirement age, begin considering your next move. Consider options that don't require 2mil to get started. ;) This doesn't mean you can't take a well-deserved break, but don't talk yourself into early retirement. This may be more difficult than it seems, so seek motivation in this area wherever you can find it. The fact is, 2mil is certainly nice, but if you stop now, you'll go through it quicker than you think. Treat it as a cushion, not a windfall. Good luck!
  • jrockway 18y ago
    Keep in mind that $2M will generate over $100,000 a year in interest. So it is definitely possible to retire forever on this amount of money.
    • diego 18y ago
      Right now it's more like 2.5%, or $50,000 a year before taxes. http://www.bankrate.com/brm/rate/mmmf_home.asp http://www.bankrate.com/brm/rate/mmmf_home.asp Also, in the long run money market accounts and CDs tend to not even make up for inflation. That doesn't mean it's not possible to retire on $2M, especially if you are middle-aged and don't have dependents. If you are young, live in a relatively affluent area in North America and are yet to start a family, forget about it.
    • ggruschow 18y ago
      Uh, how? That's a 5% rate of interest. The only way to get that is by taking significant principal risk ("junk" bonds or equity investments). 30 year US treasury bonds are only yielding 3.54%, and everything less than 3 years is <1% [1]. The highest yielding US$ CD I could find [2] was 4.3%, and the highest CDN$ GIC looks to be 4.3% [3]. Also, remember inflation - it really eats into it.. Let's say you're 30 and expect to live to 75. Even with a modest 2.5% inflation rate, your effective income will be <1/3 of what you started with by the end. [1]http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml http://www.ustreas.gov/offices/domestic-finance/debt-managem... [2]http://beta.bankrate.com/funnel/cd-investments/cd-investment-results.aspx?local=false&tab=cds&prods=19 http://beta.bankrate.com/funnel/cd-investments/cd-investment... [3]http://money.canoe.ca/rates/gics_5.html http://money.canoe.ca/rates/gics_5.html
• smanek 18y ago
  I would highly recommend Philip Greenspun's investing and early retirement articles, which explain how he dealt with a similar situation. http://philip.greenspun.com/materialism/money http://philip.greenspun.com/materialism/money http://philip.greenspun.com/materialism/early-retirement/ http://philip.greenspun.com/materialism/early-retirement/
• gojomo 18y ago
  Go to AngelConf! http://angelconf.com/ http://angelconf.com/
  • cperciva 18y ago
    I don't think this is really answering the submitter's question, but once he moves past "how do I manage this pile of cash" and on to "what do I do with all this money", I entirely agree with the sentiment -- Canada needs more angels (and VCs, and really everybody else, too). It would be nice if some day the question for Canadian companies was if they would go South instead of when...
    • afri-silicon 18y ago
      the question for Canadian companies was if they would go South instead of when... And talking of South, real South, I and a few friends have been thinking of a y-combinator like in Nairobi Kenya. Good ideas are many but investors quite scarce
• auston 18y ago
  Invest in startups?
• jyothi 18y ago
  Buy gold.
  • releasedatez 18y ago
    Ya, you see a lot of advertisement about buying gold because it goes in opposite direction with the stock market. Maybe that can be a portion of your diversification.
    • vaksel 18y ago
      actually that "we buy gold" company is nothing but a huge scam, they give you less money than you would get from a pawn shop
      • releasedatez 18y ago
        what I meant was for @newseller to look into the possibility of investing into gold. Typical "buy low (super low) sell high" strategy is probably making "we buy gold" company a lot of money. They even have the money to buy Super Bowl ads.
  • ilamont 18y ago
    Gold is seen as safe right now, but that could turn around very quickly if the economy starts to recover or demand fails to keep pace.
• tigerthink 18y ago
  http://singinst.org/ http://singinst.org/
• hedgehog 18y ago
  1. Congratulations! 2. Ignore financial advice from random people on the internet (feel free to include me in this category). Also beware advice on complex schemes that will eat you alive with management fees. 3. Spend your time doing what makes you happy. 4. If you need time to think about life and the next project, I recommend heading to Guatemala to check out Tikal and the ATM caves across the border. After that you can head out to the Cayes and drink beer in a hammock until you feel like doing something else. Misc thoughts: For everyone besides this guy, #3 doesn't actually require that much money. $20k - $30k buys you time to travel, work on your own projects, and wait for the right opportunity. I spent 2008 doing this and I'm pretty satisfied with that decision. Also: About six or eight years ago I sat next to the CEO of a successful chain of auto shops on a flight somewhere (I forget where I was going but it was Mark Carr of Christian Brothers Automotive). His advice for this situation: take some of the money and buy a house because you'll always need somewhere to live and bankruptcy laws typically protect the home you live. This helps you get the next thing started and, should it go awry, keeps you off the streets and protects some of your assets.
  • rsgrafx 18y ago
    I'm glad I read this post.. because even though I wouldn't mind having this kind of money. Peace of mind is worth a lot more to me. My biggest goal in life is to travel so if If I were only to make enough money to accomplish this every other year.. I'd be perfectly fine with my life. Maybe its because I'm only 28. Also I totally agree with having a home base somewhere. Congratulations on your fortunes sir as well. I hope you do great things with your new fortune that uplifts your spirit. I know plenty of people in your now current tax bracket that are miserable. Take the year off like this guy suggested travel, gain a new perspective. Gain some new ideas plan them out then get back in the game.. but have an out to do the same thing again 5 years from now.
  • alecco 18y ago
    > For everyone besides this guy, #3 doesn't actually require that much > money. $20k - $30k buys you time to travel, work on your own projects, > and wait for the right opportunity. I spent 2008 doing this and > I'm pretty satisfied with that decision. Yes, and there are many nice places out there in the world where you can live on even less than that for temporary rentals. A 4 continent around the world ticket costs about $2000 and be sure to pick a good airlines network for the destinations you want. Or just pick two or three places and stay there 4 to 6 months at a time, or longer. You can definitely spend time on your future projects while traveling, many places have free wireless internet. We used to hack on BBS systems, so even 512k Internet can let you do a lot of stuff. If connection stops working, go hiking or canoeing or off to meet a pretty girl/guy/whatever you like. Oh, I second that other advise by inerte: > - Pay some debt close family members have (parents, brothers) Try to minimize the potential emergencies of close ones, you don't need to pay them off completely but get them in a path where they can restore themselves to financial freedom. This is happening a lot already. Beware, don't bail out anybody on mortgage, specially if highly leveraged, they have negative equity, or have interest-only mortgages! There are laws to protect them and your money will get wasted for nothing. Perhaps help them after they file bankruptcy (IANAL.) Whatever you do, have a good time! :)
• stuntgoat 18y ago
  If you ever want to help the most people per dollar spent, take a look at micro-nutrient need in developing countries. Several smart economists ran the numbers and found this is the most cost effective way to help the most people. Check it out: http://www.copenhagenconsensus.com/ http://www.copenhagenconsensus.com/
• pj 18y ago
  Do absolutely nothing for a year. Assume your life is just as it was. $2M can really mess with your mind. It's not really enough to live forever. But it is enough to live on for a long time. If you are careful, you could invest it and live on the interest. If you aren't careful, you could invest it and lose it. But remember, you don't know what is going to happen. It's cash for now. I would suggest you just sit on it for a year. Think. What do you want your future life to be like? How do you want to live the next 5 to 10 years. And be prepared to get bored. If you aren't working and learning and doing things, you get bored. Save the money for your next startup. In the meantime, live on the interest and stay liquid until you /know/ what you should do with the money.
• smanek 18y ago
  I like mint.com to manage all my accounts, and keep track of my spending (I do all my spending on my credit card, so it's great for budgeting since it can automatically categorize expenditures). You have a few orders of magnitude more then me, but I imagine it should scale fairly well ;-)
• pg 18y ago
  Here's the conventional advice. Start with it all in cash, in some form you feel is sufficiently safe from disasters. Gradually over a couple years bleed it into some combination of stocks (by default in a low-cost index fund) and bonds. The usual rule of thumb is to put your age percentage in bonds. I.e. at age 30 you should have 30% bonds.
  • afri-silicon 18y ago
    This is a little un-related, but the more I read HN and actively listen the more I think of a y-combinator like org in Nairobi Kenya. Ideas are many but angels scarce. Suggestions kindly
• deleted 18y ago
  [deleted]
• gasull 18y ago
  I like Eric Janzsen's advise on investing, despite his so bad-looking website http://itulip.com/ http://itulip.com/ . His view: - No investment is gonna make you rich while we are in recession. - Gold will appreciate in dollars, but just because dollars will actually depreciate. So, for the following years, if you buy gold and hold it, you won't loose purchasing power, but you won't get rich. After the recession, Janzsen recommends to buy green energy stocks: http://www.harpers.org/archive/2008/02/0081908 http://www.harpers.org/archive/2008/02/0081908
• jonursenbach 18y ago
  Start over.
• deleted 18y ago
  [deleted]
• jwb119 18y ago
  "Be fearful when others are greedy, and be greedy when others are fearful." -Warren Buffett I dare you to find many greedy opinions out there today.. Everything I read is decidedly fearful. Full text of the article is at http://www.nytimes.com/2008/10/17/opinion/17buffett.html http://www.nytimes.com/2008/10/17/opinion/17buffett.html (I realize its slightly less applicable to Canadians)
  • agotterer 18y ago
    I was looking for this exact link for but couldn't remember where it was. I can lay my search to sleep now. Thanks!
• sammcd 18y ago
  It seems to me you are asking the wrong people. My father works at an investment company (http://www.hilliard.com/ http://www.hilliard.com/), and usually the people that give you investment advice at banks are the people that couldn't make it at real investment companies. You need someone whose job is to find out what kind of person you are (risky , etc) and help manage your money for you. There are many people who do this very well, and the good news is that many of the corrupt ones have been washed away in the cleansing fire that is the recent economic situation. Anyway don't take my advice I'm a college student that doesn't know crap about money. But find someone that has done it for a living.
• dylanz 18y ago
  1) Buy property in a location you could see yourself growing old in. 2) Take a Permaculture Design Course. 3) Live happily and take trips to places that happily meet your vices.
• timcederman 18y ago
  Certainly diversify. It's still an easy amount to handle yourself which is good. My biggest mistake was not diversifying enough. Happily I did get strong advice which I half-heartedly followed, for which I am forever grateful. By the way, there are plenty of stocks out there paying very handsome dividends. I recently bought some bank stock paying ~ 11% last year, forecast to pay the same again this year. It's up to you though -- investing should be both for profit and personal satisfaction (I tend to invest in companies I'm rooting for, or are doing good in the world). If I were you, I would simply use something like mint.com (I use the bankofamerica.com aggregator) to keep track of everything, put your money away and enjoy the safety net. In the meantime, get hungry, and try to do it twice. ...and do make sure you treat yourself with something. If it were me, it'd be travelling for a while, but each to their own.
• sown 18y ago
  I'm reminded of a rotten.com article http://www.rotten.com/library/culture/lottery-winners/ http://www.rotten.com/library/culture/lottery-winners/
• kul 18y ago
  Firstly, congratulations! I was in similar position once I sold Auctomatic and moved to Vancouver (but with much less cash). I'm now doing property in the states. My advice would be, convert as much as possible of your money into assets that generate passive income (i.e. through rental property). You will then have financial independence for the rest of your life, and basically freedom to do what you want. If you want any help getting started on property, give me a shout.
  • slance 18y ago
    I saw you on Channel 4 a few years ago when you started Boso at Oxford... Congrats on the Auctomatic sale!
• nazgulnarsil 18y ago
  a lot of people are talking about "taking time off to think" but not really being more specific than that. This is not just a vacation, this is a vitally important step. Assuming you can make 3-5% off the 2M you are set for life. Now comes something that few people have ever been able to do: actually decide (with a huge degree of freedom) what your time on this earth means to you. It may sound silly now, but you have just been reborn. You are no longer subject to the same rules of life that most are. You are literally a different person, though you may not know it yet. Take things slow, like a baby taking first steps. And don't think that this all involves naval gazing. Look at the other people in your life and what their relationships means to you. They have to start all over with a new You as well. It can be rough on people. Not taking this seriously is the prime reason new wealth often loses it. Everything else is details.
• seshagiric 18y ago
  Talk to Randy Komisar and ask what to do.
• known 18y ago
  Have you considered setting up YCombinator in Canada?
  • potatolicious 18y ago
    That's a great idea, and I'm not being sarcastic. IMHO startups around here really don't get enough love from anyone. Family look at you like you're crazy not wanting to be a wage slave, so you can afford a tiny apartment in the tenements out by the edges of Scarborough. Lots of government programs will cheer you on for taking the plunge, but few are actually there to help you...
• mkuhn 18y ago
  Invest against the trend. And don't invest everything into one thing, diversify. As a last piece of advice I would suggest to keep some liquidity.
• jacquesm 18y ago
  Take your time, don't spend what you don't have to, stay away from people giving you 'good advice' (including this one), everything comes to those who wait. The only concrete advice I'd have for you is spread your money around different banks and currencies so that if something takes a hit you don't lose it all in one go. 2M is way above the usual insured amount. Oh, and keep quiet about it!
• spassky1 18y ago
  blow it back into another startup
• abhishekdesai 18y ago
  invest in my startup http://rivals4ever.com http://rivals4ever.com ;)
• cwb 18y ago
  Congratulations! Invest a little in yourself: 1. Get a good doctor and dentist; commit to yearly full check-ups. 2. Develop a life-long exercise habit that you can perform anywhere. No weights, minimum props. Get help from (i.e. pay) army/special-forces trainer initially. Now is probably a good time to do this, if you haven't already.
• brentr 18y ago
  I recommend seeing someone at a bank about setting up a trust. If you are concerned with making sure that the corpus of the trust remains intact, explicitly tell the bank that as there are investment opportunities that are completely appropriate for that. The benefits of a trust are numerous. When I worked as a trust analyst I saw many people who set up a trust solely to protect their money from themselves. It's something you might want to look into if you are concerned with blowing through the money.
• c00p3r 18y ago
  You can invest in development of a family hotel somewhere in Hymalayan trekking areas, like Nepal, Sikkim or West Bengal. Actually you can build two or three of them. =)
• ggruschow 18y ago
  There's plenty of good advice here to think about.. but just think about it for a year. (Software recommendation: none for now) There's no hurry, but there's plenty of mistakes to be made. Carry on as usual for a while and see if any of the ideas really resonates with you after your mind has settled. Definitely don't get into a contract with someone to "manage" your money - they typically want 2% annually for it, and it's highly likely they've underperformed money market accounts over the past decade. Many (most?) have lost money over the past decade, at least after expenses.
• lallysingh 18y ago
  Mac software: quicken's worked for me. Not fancy, not pretty, but effective. Talk to a professional about investing & protecting your assets. As you can live on the interest, perhaps the free time is more important than the money for now? Sounds like a good time to invest in yourself. First: a small vacation (a few weeks, ~$2-5k) to really relax. Next: maybe some school if there were other things that piqued your interest before, but never had a chance to study. If not school, maybe not a bad time to just pick up some books and hedonistically blowing weeks on whatever you want to study :-) If anyone asks, call it market research. Congrats!
• UsNThem 18y ago
  Invest in Madoff :D
• lazyant 18y ago
  since nobody mentioned it: make a last will. As for opinions I'd put maybe 5% in stock indexes (Dow,S&P) as 'risk' and the rest partitioned in bonds and cash in high interest account after talking with a tax specialist. I'd forget about money managers.
• giardini 18y ago
  If you don't own a home then buy one. Buy it as a home, not as an investment, so the smaller the better. If possible, buy a home in an area that has no homeowners' association and associated fees. If you don't, you will eventually regret it. You could buy a "fee simple townhome", which means it's small (condo-size) and has no association fees. The reason I say buy not as an investment is because the real estate market hasn't nearly hit bottom yet and won't for another two years. Until then investing significantly in real estate would be a mistake. So buy something modest that you like in an area that you like. Cash is king right now. Being in Canadian currency is good. Read Nassim Taleb, who presciently suggested years ago that we avoid investing heavily in the stock markets; they're too risky. Instead put ~90% into absolutely safe investments and then bet the remaining 5-10% in long-shot positive "black swans" (e.g, high technology and biotech ventures with long odds but incredible payoffs). Most often you'll lose but, when you win you'll win huge, more than enough to cover your losses. To understand his suggestions, you'd best read his excellent book, "The Black Swan". And I assume you've split your money into various accounts so that you are insured against any losses should your bank go out of business.
• cellis 18y ago
  Trip around the world.
• mistermann 18y ago
  1. Get a good accountant 2. Be very careful in the stock market right now.
• Dauntless 18y ago
  Buy shares in companies from which you use and plan to buy products in future and that have good ROE. Be an angel investor. Travel around to every continent on earth once. Start a new company, where you can invest the money again.
• drsnyder 18y ago
  Pay off any debts you have and set aside some for taxes. Consider some diversification, but keep as much of it as you can (or stomach) as liquid as possible (high interest savings accounts, CDs, or treasuries). There may be some great opportunities in another year or so for those who are still solvent and have a lot of cash-- housing will probably be a lot lower, and so will stocks. Wait until then and you may pickup some of the deals of the century.
• nihilocrat 18y ago
  As everyone else says, save the lion's share of the money, and act like nothing happened. Ensure that you will never have to work at a job if you don't like it.
• nickfox 18y ago
  I haven't made that much at once before but I have made a considerable amount and I have this one bit of advice. Make sure you don't lose your work ethic.
• alexandermimran 18y ago
  You should read some good books and make your own decision. Worst thing that could happen is you are hurt by inflation which can't happen nearly as fast as a stock crash...
• goat 18y ago
  Staggered CDs and Dollar cost averaging. http://en.wikipedia.org/wiki/Certificate_of_deposit http://en.wikipedia.org/wiki/Certificate_of_deposit http://en.wikipedia.org/wiki/Dollar_cost_averaging http://en.wikipedia.org/wiki/Dollar_cost_averaging Eventually you want to be diversified, but right now, you don't know if you want to put all your money in the market. So divide your money into 8ths (or whatever, by 8ths right now the US government will insure each $250k in your CDs) put 1/8 into the market now. 1/8 into a 1 month CD 1/8 into a 2 month CD 1/8 into a 3 month CD 1/8 into a 6 month CD .... When each CD matures buy more of the market. That way if we haven't hit bottom, yet, you will still be buying on the way down and up. Unless you are going to spend time studying industries put it all in index funds/etfs. Your market allocations depend on when you need the money, but I have something like 45% Russell 1000 20% EAFE 12% Russell 2000 10% Morgan Stanley bond index 5% REIT index 5% Nat Resources/Commodities 3% emerging markets This should be translatable into Canadian assets, just not by me.
• mrtron 18y ago
  Being Canadian...I recommend PC Financial. Their high interest savings is great, and no fees! With 2 mil, I would personally: -Buy a place to live in the 400k range. Housing is probably overpriced right now, but generally speaking the Canadian housing market is not too badly bubbled. I really don't see a Canadian crash coming, but there may be a slight price reduction. -Put 200k into a high interest account. Easy to access, guaranteed return, etc. -Put 200k into a new business. But that is because it is what I enjoy doing, if you want to learn to paint, go to school, etc throw the money there. -Put 200k in the stock market. Canadian financial institutions are amazingly underpriced currently, and so are several commodity based companies. The remaining million I would use for stability/hedging. Hedge against the Canadian dollar, inflation, etc. I would probably get some professional help from investment banking friends, but this would probably be a combination of US bonds, CDN bonds, gold, etc. The Canadian economy is currently almost untouched by the current recession. There will be a bad 2-3 years at a minimum coming up so plan for that. I would plan on shifting into the stock market cautiously over a period of time and not throw it all in at once, we could easily see another 50% decline over a few months. Lastly, I would take a month and travel around before doing anything at all.
  • JabavuAdams 18y ago
    ING is effectively the same as PC Financial. If the OP feels he has enough money now, why would he consider the stock market at all? His only concern would be keeping up with inflation. I'd also suggest reading "Fooled by Randomness" before talking to any investment bankers. Never risk something you actually need for something you don't need. Also, don't convince yourself that you don't really need something you actually do need. One might be better off buying supplies so that one could survive for a week-long power-outage, say, than playing the market, right now. A few months ago, an apartment building near me had one of its electrical transformers blow up. The residents had to evacuate that day, and were not allowed back into their building for a few weeks. Some suites were looted. It made me realize that I was completely unprepared for that kind of scenario. How many people who pride themselves on their retirement plans are equally unprepared for this kind of rare event?
• JabavuAdams 18y ago
  Take a cooling-off period of a few months to relax, and research. During this time, do not buy a home, or any other large purchase (> $4k ?) that you wouldn't have before your windfall. Stay out of the stock, market, except for GICs. Think about what you would need to be permanently semi-retired. I.e. you don't have to work for anyone else, but you don't upscale your lifestyle. You now have 24/7 sweat equity, independent of your other capital. The problem with this particular time is that we're in some kind of transitional period. I have no confidence in my ability to predict what the Canadian and US economies will look like in 10-20 years. I've been very aggressive in paying down my house and contributing to my RRSP. OTOH, I now wish that some percentage of the funds I put into my RRSP had been devoted to disaster preparation. Nothing too extreme -- just another form of insurance. I.e. an RRSP is preparation that makes sense within our current model of society. I currently have few hedges for scenarios outside that model. I guess the main thing is to take small steps. It's very hard to scale back your lifestyle once you've scaled it up. If you are mostly content now, then be very careful about up-scaling. You may have different goals, but for me the greatest luxury is free time to pursue my ideas wherever they take me.
• look_lookatme 18y ago
  Two chicks at once.
• JabavuAdams 18y ago
  Take the Canadian Securities Course, if you're at all interested in money. I did. It's easy if you prepare. I crammed it over a weekend, and just squeaked by. I've heard of a lot of people failing after cramming, though, so YMMV. After reading Fooled By Randomness, I don't trust anyone else to manage my money. It helps that my wife and I are somewhat interested in finance. I would definitely go to others for ideas, but not for decision-making. It's the same kind of "Ah ha" experience that PG tries to create in young techies. You really can run your own business. Well, you really can manage your own money (assuming some minimal interest in the subject). NOTE: about the CSC: the material is a bit boring for someone coming from an engineering background. I.e. you're supposed to repeat what they want to hear (including some dogma), rather than actually give a nuanced confidenced answer. There are quite a few calculation questions, though.
• tlb 18y ago
  Don't over-think it. Put half in cash and half in 3-5 stocks you think don't suck. You would have to spend a huge amount of time on money management to get better results than that. When I cashed out, I gave away 10%. Mostly to family, and some to local charitable projects I personally cared about. It can feel good. Spend your time thinking about what to do next, now that you're not constrained to make an income. Start a new business? Become an international playboy? Go back to school? Up to you.
• lr 18y ago
  Buy lots of gold and silver! But yes, diversify (savings, CDs, stocks, bonds, etc.).
• gcheong 18y ago
  Try having a look at the Motley Fool website. www.fool.com
• dag 18y ago
  1. Get in great shape. 2. Help the poor.
• seanc 18y ago
  There is a whole class of financial planners who only work for rich people. They typically want you to have 500k net worth before they'll talk to you. They provide better advice for much less money that the retail mutual fund pushers at banks. Google Baskin Financial and Doherty and Associates, and ask around for somebody like that local to you. Take meetings with them and discuss their investment strategy and philosophy until you find a good match with someone you can trust.
• tomsaffell 18y ago
  Any advice would really need to based on an understanding of what you want to get from the money, and more broadly from life. I slightly get the impression from the wording of your question that you don't quite know what you want to get from it, but you feel that you ought to do something (there are plenty of people who's job it is to tell you that you ought to). I think that unless you know what you want from it, you'll never be able to answer this question. Some options to consider: seeding your next company, angel funding, charity, friends & family, financial stimulus of your local area, etc. - these are all investments of sorts. If you're just looking for somewhere to park it whilst you decide then make sure you're within FDIC limits on each account...
• anaphoric 18y ago
  No offense, but I don't believe you. I think you are spoofing HN. On the very small chance you are telling the truth, I would say diversify your investments and keep your mouth shut. And then start ramblin'
• kingkongrevenge 18y ago
  Many eggs, many baskets. Make sure some of your wealth is out of the reach of your government. Bullion stored in switzererland or the channel islands is good for this. Learn how to hedge with options. Puts were quite cheap before the crash. People who had insured their positions are doing fine. This occurs to remarkably few.
• gorillak 18y ago
  Give it to me. I will put it to good use. Promise.
• judegomila 18y ago
  invest in heyzap.com (haha)
• jaspertheghost 18y ago
  If you're not actively managing your portfolio, the biggest thing you can make sure to do is asset allocation a la David F. Swensen. I'd recommend Unconventional Success: A Fundamental Approach to Personal Investment.
• Flemlord 18y ago
  You need an investment advisor, not recommendations from your accountant or hacker news. ;-) Find somebody with a Certified Financial Planner (CFP) designation. A good CFP may charge you $1k-$3k up front for a comprehensive financial plan, then around 1% of your total portfolio annually if you want him to actively manage your assets. I work in finance and can give you some recommendations if you'd like.
• newseller 18y ago
  Just wanted to chime in to thank everyone for the great and diverse advice. I definitely can't respond to all the overwhelming feedback, so I'll keep it at thanks. This is a great community, and I appreciate all of you. Seems nobody has any good financial software other than quicken for mac, but that's ok. Maybe that'll be my next project. :) You've definitely given me a lot to research and think about as I approach my retirement. Thanks again!
• brianobush 18y ago
  actually insurance companies have many rules put in place by the states that will assign the accounts to a different servicing company. but that is US, I am sure Canada has similar rules. check out coffee house investment strategy, I have been doing this for years (10+) and have fared well in this recession. Less worry and excellent gains. Make sure you always bleed a large sum of money slowly into the market, so you will not be caught at a specific point price-wise. See: http://kd7yhr.org/bushbo/coffeehouse_investing.md http://kd7yhr.org/bushbo/coffeehouse_investing.md for pointers
• tdeslaurier 18y ago
  Hello there. I am located in Edmonton, Alberta, and licensed in most provinces. I am in the Insurance industry and have dealt with Lottery winners, widows, business owners and many others in my 17 years as an advisor. The best strategy for you is not going to be found through a forum like this. I can say that for every case I have dealt with where the monies involved exceed $1,000,000 the solutions have been different. Some products and strategies I can assist you with, and for others I have peers that I have dealt with for years including Tax Accountants, Tax Attourneys and others. I would encourage you to check out my website at www.dfsinc.ca to see if you like what you see. If so, my contact information is there and I would be pleased to do a no-obligation initial interview with you at your convenience. I am NOT fly by night - I am past-president of our Professional Association, and have rune a Managing General Agency with over 200 brokers working with me for many years. I have references. I hope to hear from you soon.
• teyc 18y ago
  Set aside some money in Kiva.com, it'll be the happiest investment you ever made.
• klahnako 18y ago
  I am in Ontario. My advice is: 1) Stay in real cash (not equivelents) until this market turmoil is done. 2) Figure out what you want your next "career" to be. You are in a position to take some risks, but 2million is not that much. You want to give yourself purpose and continue making some money. 3) Do not travel unless you are one to learn other languages: Travel is addictive but does nothing to improve you. Like all drugs, travel should be a reward to yourself, not the purpose.