You invest $5,000,000.00 in the stock market with the help of a portfolio manager and you reinvest half of your profits and give away the rest to your family.
If you get a 10% return you reinvest $250,000.00 and you give away to your family $250,000.00
If you get a 20% return you reinvest $500,000.00 and you give away to your family $500,000.00
This way you HAVE MORE MONEY EACH YEAR. Therefore you never run out of money.
Keep in mind that with a $5,000,000.00 portfolio you can afford a very expensive portfolio manager that hopefully will protect your money against bad investments and market crashes and war. Therefore there is a very low probability that you will lose money in a year.
Even if you lose, say 20% in the first year. You still have $4,000,000.00 to make more money in the future. (If that happens fire your portfolio manager)
When a bad year ends (Losses) you only give away to your family a minimum wage salary to survive that year or they could survive on credit for an entire year and when the next year comes they pay off all debts or a combination of both.
The other $5,000,000.00 goes to start a Company (You could easily start 50 $100,000.00 small businesses or 5 $1,000,000.00 medium size businesses)
Like before you reinvest half of the profits in the company and the rest goes to your family.
You hire 50 managers to run your small businesses or 5 manager to run your medium size businesses and you live your life.
The key is not to spend $5,000,000.00 to buy a house in Beverly Hills or $250,000.00 to buy a Ferrari because if you burn your money at that rate you will go broke within 3 years. Just like most Actors or Singers.
There is nothing wrong with a $250,000 Ferrari or a $5,000,000.00 House.
Just buy them WITH YOUR PROFITS. (Take $125,000.00 from your company and $125,000.00 from your stock market profits and buy it)
If you did not make enough to buy it. You could save and buy it the next year.
Wealth Management is a very complex subject.
Drop me a line if you need more detailed advice.What is the best longterm investment advice for large amounts of money(millions)?
Not terribly bad advice overall, but quite unrealistic expectations for returns not to mention the idea that paying alot for an investment manager will give you a very low chance of losing money.
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What is the best longterm investment advice for large amounts of money(millions)?
If you won that kind of money, I would suggest doing what the incredibly rich old ladies do -- buy bonds. If you have lets say $50 million, you could generate $3 million a year if you can earn 6%. If you cant live on 3 million a year then you have real issues. This way you'd never eat into the principal and you'd be very very comfy.
Set up trusts to deal with everything from taxes to ';sudden'; relatives. Diversify across stocks, bonds and utilize fixed deferred and immediate annuities to fund cash flow. Find a competent, and trustworthy financial planner and estate attorney.
If you have a million dollar, why don't you pay $1,000 for a professional financial advisor?
Diversify into stocks and bonds, domestic and foreign. Don't take chances, you've already got millions. Play it safe and live off the interest, leave the rest to kids, grandkids.
property and houses / on average they go up 4% a year in value
I-bonds are just over 6% interest right now. If you had netted $5 million and put it all in I-bonds, in 10 years, you would have just under $3.4 million gross more than you had before.
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