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What to do with this cash? (50% of networth)

Started by griffin, August 28, 2019, 06:40:03 AM

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Hi FS!

We recently became cash heavy with a private investment pay out, as well as cashing out some employer stock. My investment philosophy has always been low cost index funds, as I read Ramit Sethi's book when I was a teenager, and because I always had a long time horizon it was good enough. But now I've come to be more interested in FI and accelerating my retirement from traditional work, I've realized I don't have a strategy for investing this cash.

The below table represents our current financial snapshot as of today. The outstanding 50K of employer stock will be liquidated in 2020, it's a LTCG with $0 cost basis, but I'm holding off selling this year as our income is already higher for the year. We'd like to keep 60K in cash, a year's worth of living expenses, although could be convinced to deploy this as well. We don't own a home or are interested in purchasing one at this time.

What asset allocation should we be considering in the accumulation phase, with the goal to be FI in 6-10 years?
How should we think about LSI vs DCA? I've read the Vanguard white paper, but I'm concerned about LSI at market peak.
How might we take advantage of a recession?

I've read the SEER, Asset Allocation by Age, and Inverted Yield posts, but still am having trouble creating a framework.


Player        Account       Asset            Value         
P1BrokerageEmployer Stock$50,360
P1Roth IRAVFFVX$17,547
P1Rollover IRAVBIAX$4,397
P2Roth IRAVTSAX$6,134
P2Traditional IRAVTSAX$6,012
P2Rollover IRAVFFVX$2,435
Annual Expenses=60K


Very cool! I'm curious to know what Ramit advised? He was very smart to come out with his book about how to get rich right out of college without being rich. Now he is rich! He's one of the guys who inspired me to think, "if he can do it, I can do it."

If you want to FI, then you need to aggressively build your after-tax, non-401(k) brokerage accounts much more aggressively. That's the main way to generate passive income. Continue to contribute to your tax-advantegous accounts for free money, but build out the brokerage accounts.




Hey Sam - Thanks for the reply.

Ramit has always advocated Vanguard lifecycle (or index) for the lazy or mirroring Swensen for the more interested, or an asset allocation that fits your needs once you understand the risk. I have a great deal of respect for Ramit and have never found his advice to be detrimental to building wealth.

Thanks for the article, I believe I've read this one, but I'll dig back into it.

I guess my two questions are:

Should I even bother with bonds or alternative assets at this point in the accumulation phase?
When is LSI worse than DCA?

I'm struggling to find the model to follow to put this 150K plus into the market and at what allocation. I'd consider myself to be medium if not high risk.

I know you have no obligation to respond to these questions, so I understand if you don't. Either way, I'm grateful for your work.