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Multi-Millions in my 30s-thrilled by success, but paralyzed and need direction

Started by Atlninja, September 16, 2018, 07:03:25 AM

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Hi everyone, and thanks to Sam for this forum and the site that has helped so many.

I thought I might share my situation and seek advice from the community. I have done a financial review with Sam about a year ago, which I cannot recommend highly enough, it was as much therapeutic as strategic, and he offered great insight along with a strategy.

I am, by most measures, successful. In my late 30s, partner in my own business, net worth around 9-10 million, not counting value of my company.

What I have found, ironically, as I have grown in age and net worth, I have become more paralyzed by wealth and find less joy in spending money and even investing as I am more afraid of a strikeout than I long for a home run.

My business has blossomed over the last 5 years and I think the primary driver of my anxiety is fear that it goes away just as quickly as it comes. The business has provided about $1.5M in take home income per year over this period and that has allowed us to really accelerate our savings. On top of that, I have made some solid investments in the recovery and have managed to largely avoid any significant mistakes.

I don't trust the market at these levels, the real estate market seems frothy, and bonds make me nervous in an ever changing political environment and honestly, the valuation changes are not something I fully understand.

My rough asset allocation is as follows:

500k: Company Profit Sharing Retirement Account
1.5M: Cash in various 1.5-1.8% Savings Accounts
2.1M: 2-2.5% CDs
250k: 529s for kids
750k: 401k and retirement accounts
750k: Brokerage Accounts:wealthfront/vanguard/etrade
700k: Paid off House
450k: Investment in start up Business two years ago. Likely to sell for $2M in next 12 months.
650k: Various Hard Money Loans paying 12% interest
1.5M: Various Real estate investments: Residential and Commercial
500k: Other

No Debt.

Here is where the paralysis comes in: I feel bad with so much cash and CDs sitting around, like I should be doing more, but I also sleep well at night not worrying where our next meal is coming from. We are not flashy people, drive cars worth about 30k and send our kids to public school. Our splurges are taking our extended family on paid for vacations, having someone help clean the house and paying for help with our kids as needed.

Right now I auto invest 7k a month to a wealthfront account and 4k a month to Vanguard for an index fund and bond fund. I started this a few years ago as an attempt to dollar cost average over time into the market. I did a 30k RealtyShares Investment earlier this year and am looking for other interesting deals there regularly. 

I'd be curious to hear what you would do in my situation and if you see any adjustments I should be making.


jeez your doing great, relax and enjoy the fact that your miles ahead of most. Life is short, maybe start giving some to a good charity.


Thank you. We do give away about 15% of our income every year and also are in the position to help friends and family as needed, which is a great feeling. I know this post probably sounds absurd to some, but what strikes me is I have arrived exactly where I wanted to be, but don't yet sense I have "arrived". The longing for safety and security has been replaced by the fear of loss or calamity.

I would be curious to hear what others think of my asset allocation and what changes they might make.


I'd be more than happy to take a small amount off your hands  ;)

In all seriousness though, congrats on your accomplishments and making it to where you are. That's no small feat. I'm not in a position to give allocation advice as I am literally at the opposite end of you (still paying down debt before really diving into growing my retirement and investment accounts). You seem to be diversified really well and are obviously very deliberate with where your money goes, so I doubt it would just "disappear" like your fears are telling you. Maybe it's time for a new hobby that you can dive into? To me, you seem to be doing great and frankly I hope I can get to your point some day.


Thank you, BuckNut.

To encourage you, it wasn't too long ago that I had credit card debt, spent more than I should, and was making about 40k a year.

I remember, years ago, asking my accountant at what net worth he felt people could take their foot off the gas and live off their investments. He said "5 million", and I set a mental goal of achieving 5M. I did that, without much fanfare or enjoyment, as I recognized I personally did not feel secure enough to take my foot off the gas. The goal then became $10m, and here we are, yet I really don't feel too much more secure than I did at 5M. I my head, I now thing I need to get to 15-20 before I can "really" be secure.

Reminds me of some movie where someone asks a wealthy character "how much is enough"...and thought for a second and said "more". I don't want to get into that trap, but also see how easy it can be to fall into that mindset.


I appreciate the encouragement. Thankfully my debt is all student loans and I'm diligently paying them down every month. I'm hoping within about a year and half I'll be all finished with them.

I've heard and read in various places that building wealth can become addicting. It sounds like you're well aware of this fact and don't wish to fall into that trap.  I forget which article it was, but I read one from Sam recently that talked about the tipping point where you are passively generating more money than you can responsibly spend in a year. I don't know if you're at that point yet, but my encouragement to you is that money itself does not bring about happiness and satisfaction. Find that thing that does bring you peace of mind and pursue it.

I don't know if any of that is even helpful, but at least talking through it should provide some benefit.  :)


Hi Atlninja,

I think it is safe to say that most people would happily give their right arm to find themselves in your position but I can totally appreciate your concerns as this is your personal position, your networth and only you can really establish what value really is enough for you and your family. You have clearly been brilliant up to this point and from my perspective if you can do it once then you could do it again if the worse ever came to the worse as you have time on your side. Saying that, you look well diversified to me but I am certainly no expert, you have plenty of cash on the sidelines for any future opportunities should they present themselves, have no debt and are actively giving back.

I have never even met you and I feel proud of you !!! You are doing amazingly and don't necessary need to swing for the fences from where I am standing but I appreciate everything is subjective.

Keep doing what you are doing and "Sit on a pitch". I am from the UK and I really hope that means what I think it means. Lol

I do agree on the valuation front at present with equities looking frothy and the bond market looking vulnerable to further interest rate rises so I also £ cost average smaller amounts into the market whilst keeping funds on the sideline. I often question myself if I am doing the right thing as a high percentage of my current monthly investments feed into the US market and from over here I question if I am on a fool's errand and the US market is going to go pop at some point? Property prices over here are also high so I find myself unsure of exactly what my best allocations need to be across different asset classes so I find the different blogs such as Sam's invaluable in keeping me on the straight and narrow.

Hope everything continues to work out for you and I wish you every success, not that I think you are going to need it.

Finally, I seriously do apologize for the poor baseball puns !!!


Thank you for the kind words and insight. Impressive baseball references from a Brit!

Young And The Invested

Not to pile on, but you seem to be on the right path, regardless of how much you move the goal posts.  You're diversified, have exposure to a sufficient amount of risk to continue growing your wealth, and have plenty of dry gun powder to fund your living expenses and/or take advantage of any market opportunities.

As you stated, the question now becomes "how much is enough?"  It's a difficult question that I can't answer for you.  The philosophical nature of the question makes it something only you can answer.  For myself, I find by switching the question from "how much is enough?" to "how do I raise my baseline level of happiness?", I can answer the question more objectively.  In my head, this severs the connection between money and happiness.  By focusing on what makes me happy, I find the money becomes less important.  For me, I've found an easier path to happiness by practicing gratefulness.  It doesn't come all at once, but it does become easier to transition this mindset. 

As you've said, you've got plenty of diversified financial assets not at-risk of going bust.  Even in a large draw down scenario, you'd be just fine given how markets over a 20-year period have never cut a loss.  And over a 10-year period, 96% of the time, they've been positive.  While for a 5-year period, they've been positive 86% of the time.  In other words, as long as you stay invested, the odds are in your favor of not losing your hard-earned money.

I'm very early on in my wealth accumulation journey and am no where near anyone's idea of "enough".  I've managed to grow my net worth to ~$250-300k in the past 5 years and don't see anything short of where you are as my "enough" threshold.  Through diversification, savings, and compounding returns, I hope to reach that eighth digit in my net worth in the coming twenty years.  In the meantime, I'm focusing on how I can become happier through practicing gratefulness and how I can elevate my baseline level of happiness.  I'm transitioning to not needing some number to give me permission to be happy.


You've done very well and your allocation is sound. I wouldn't add more risk than you need and I would try to do more to make yourself feel less paralyzed.

The one suggestion I would have is add one full service brokerage to the mix. Chase with their Chase Private Client is one I would recommend and I think they provide good value.

This is for minimizing fees and really increasing flexibility. In a nutshell they want 250k of assets and in return you get a ton of fee waivers and a dedicated banker and investment professional. My investment advisor sends me research and is a good sounding board. Also helps set up IRA accounts and other operational things. The banking product is great, no fee ATM withdrawals anywhere in the world (ATM fee credits). No fee wire transfers. High limits on online banking, mobile deposit. Real people to talk to when things go wrong. Cost - that 250k and what fees you pay on it. Theoretically you can invest it in a vanguard etf and pay no fees, but you don't build a relationship with the broker when you need someone to talk to (or if the fidelity or vanguard site is down). The Chase Private client advisors will push for a managed strategy where you pay around 1% of aum fees. Yes - it sounds high compared to buying VOO but there are areas where it worjs. Bond funds outperform the index (very easy for them to outperform) and it makes sense to do so in a fund. Bond funds charge a variety of fees, but the managed account gets you in at the institutional fee level. So the 1% you pay chase is offset by lower fees on the mutual funds they buy for you which works well. International and EM equities are also asset classes where I think active management is worth paying for.

So the suggestion involves high fees for a small allocation, with some offsets in mutual fund fees. You get a great banking product, investment research and an investment professional to talk to. Worth it in your scenario where you have the money and really want to focus on things that make your day to day life better.


You're way ahead of most of the people in this world so I wouldn't be overly concerned about how to be properly invested/diversified or whether you would lose it all on a blink. That won't really happen given how you are currently invested among several areas and fields, regardless of whether that's the optimum way or if you have too much on low-return assets. What I would be more focused on is on the things that got you there in the first place: your business. If you can keep on earning what you've been earning so far (or even half of that) and then spending a lot less of what you earn every year, I wouldn't worry about anything else. You've covered the most important goals of any other person with a family on this planet: providing shelter to the family, education, food on the plate, helping relatives in need, and splurging on the occasional vacations, as well as receiving help on domestic chores. Everything else is a matter of balance, spending only on what is needed. Besides, you got to this point by not over spending, driving  average cars and not incurring in excesses, basically spending less than what you earn. Just keep doing that and WAIT for better and clear opportunities to arise in order to invest that money. You have the real luxury of waiting on those and not worrying about a things. Good luck and wish you continued success.


I am a little late to this party but and my thoughts:
1.  Your are in the top 1% (about $10 million assets, income about $400k) of US households and your asset base is increasing.  Good job you!
2.  I don't see your situation as an asset allocation issue but more of a family wealth management issue.  I would look into setting up your own family office (or finding commercial one, e.g., Chase was mentioned) and start thinking about how to manage your asset base for the you, your kiddos, your kiddos' kiddos and whatever level of charitable legacy you/SO consider appropriate.
4.  You have another 30-40 years to occupy your time.  Building "something" is a great way to spend that time and remain relevant.
5.  Depending on the number/age of kiddos, $250k is not going to cover grad school.
6.  As young as you are, it might be fun to add real estate in the form of a vacation home, to "built up" or in "final form", and turn into your permanent retirement destination.  Make some memories.


Coming into this late and somewhat orthogonally.

I was in your boat and believe that it comes from spending too much time thinking and reading on the net about money, savings rate, asset allocation etc.

The stuff can drive you nuts because everyone has a different opinion. Including all the folks on this thread.

I would review the notes/summary from your original conversation with Sam. It probably applies today as much as it did a year ago.

Then, I would do less thinking and tweaking finances, and more of a hobby that has nothing to do with it. Find something else that you can channel this energy into. Over the past year I have gotten into yoga and bjj in addition to standard workouts I've always done. I also play guitar, teach my kids to skateboard, etc. I think something physical, if you are healthy, is super important.

Time and energy allocation are as important as asset allocation at some point.


Thanks again for all of the feedback. I had a liquidation event from an investment that has increased my net worth by about 60%.

Given what you know about my situation above, and now sitting on another $6m or so in cash, how would you deploy it?


Right now, cash.

Market feels frothy again, just like you mentioned in September.

The risk of a trade war is pretty much priced out of the markets, yet the original deadline of mar 1 has come and gone.

Maybe a bit in agency MBS if you want to sell some rate volatility of interest rates going up a ton (alongside a bearish market view).

Congrats on the liquidation event. Take some time to relax. Travel a bit. Clear your mind. Lots of international investment opportunities, but takes boots on the ground to spot them.


Quote from: Atlninja on March 16, 2019, 06:24:16 PM
Thanks again for all of the feedback. I had a liquidation event from an investment that has increased my net worth by about 60%.

Given what you know about my situation above, and now sitting on another $6m or so in cash, how would you deploy it?

It sounds like your wealth is high enough above your spending rate that the biggest issue is capital preservation. More returns are nice, allowing you to live larger or impact the world more through charity. But in your shoes my top concern would be worrying about preserving enough to live comfortably across a range of bad outcomes. Make it easy to sleep at night.

What I'd do is throw together a spreadsheet that lets you test out various black swan scenarios. Specifically:

Inflation rates shoot into the 30% range for a time (with a lagging response by fixed savings vehicles)


Stock market is decimated, dropping say 80% and staying around there for the rest of your days


Specific markets are decimated, e.g. America drops 90% but the rest of the world only drops 50%


wave of bond defaults. Expensive medical events. Wealth tax instituted. Etc. Etc.

Now, on the plus side, in these bad scenarios everyone is going to be hurt. So it may be that pulling 50K a year out of CD's lets you live like a king.

I suspect what you'll find is that a very broad diversification sets you up to survive most bad outcomes comfortably. Keep a lot in CD's/treasuries/AAA bonds in case you need to just live on fixed income for a long time. But keep a lot in the market in case inflation kicks in serious and fixed income gets left behind. Keep money internationally invested in case some specific markets hit harder times. I'd run the numbers, see which scenarios hurt the most, and invest against those outcomes. If it's already balanced, I'd keep the existing allocation and just increase it.

Young And The Invested

Something very liquid with an adequate interest rate.  Look to Treasuries as your safest play or even a high-interest savings account.  I believe Sam had an e-mail recently announcing the CIT Bank 2.45% account through his affiliate link.  Might be a win-win for you both.

When the market turns south in the next 12-24 months, you'll be well-prepared to seize that opportunity.

Fat Tony

Wow, you're doing amazing. The most value that you can add to your life is absolutely psychological. I would NOT FUD (add fear, uncertainty, and distress) yourself too much. I would not try to run through worst-case scenarios - that's the exact opposite you want, really. You are probably at a 1% withdrawal rate for your spending. You will be fine. You will be adding even more stress. Invest in yourself, your happiness, and your psychology - that will yield massive returns, both in satisfaction and financially as you continue to do great business, than any tweaking of investments. You will reap far more returns than any financial engineering.

The technical investment advice I would have for you is (which will probably yield an extra percent or two of after-tax returns):

(1) look at tax-efficient asset allocation. If you're earning 1.5M a year, you're giving half your hard money loan interest away in taxes (37%+3.8%+6% - assuming Georgia). Don't let the tax tail wag the dog, though.

I would try to move your 650K hard money loans into an IRA/Roth IRA if possible, and move your 401k/IRA allocation (which I guess is mostly stocks) into taxable accounts. Look into self-directed IRAs. It might be impossible depending on your mix between IRA money vs. 401k, which is quite normal, and the structure of your loans, which may or may not be easy to move into a self-directed IRA.

(2) Look at slightly higher yielding tax efficient investments for your cash e.g. 2.2% munis (effectively 3.7%+) munis instead of 1.5% savings accounts, or 2.2% Ally accounts.

(3) Be very careful of Wealthfront and lock in. I wouldn't turn on Direct Indexing if I were you, it makes it a huge hassle and tax pain to leave them. I was pro Wealthfront until 2018. They are fine for smaller accounts but I have hesitancies about them ever since they added their underperforming Risk Parity fund, that is doing worse than regular risk parity funds, and they're ultimately beholden to VCs and need to turn a profit

(4) Security. Make sure you have 2-factor authentication on all the high value and brokerage accounts. Turn on PIN verification to port your phone number (look up SIM porting scam/SIM swap scam). Set up credit monitoring. Make sure you're insured.

(5) Estate planning

Money Ronin

What we have in common is that we've both built a sizable net worth, we hate to see funds lying idle, and we find it difficult to enjoy our wealth due to fear of loss.

How we differ is that my income is far lower, yet I'm willing to take on far greater risk.  I spend most of my time managing my investments including two extremely time-consuming, money-losing "investments" age 9 and 11.  I hedge my risk by living a normal life (aka fear of spending), but I'm not afraid to take on financial risk.

Unlike you, I have "enough" (my bar is lower), but I don't like to waste money invested in places that don't even beat inflation.  I'm not saying I live without fear or anxiety, but I do realize that money does not equate to happiness or peace.

With that in mind, here's my take:

500k: Company Profit Sharing Retirement Account (Keep contributing as this likely a tax advantage; I stopped at a $1M due to the future tax liability)
1.5M: Cash in various 1.5-1.8% Savings Accounts (Way too much cash; if you're worried about emergencies, open a line of credit on real estate or brokerage)
2.1M: 2-2.5% CDs  (Same as Cash)
250k: 529s for kids (Not enough if private or grad schools are involved)
750k: 401k and retirement accounts (See Retirement Account and understand Required Minimum Distributions)
750k: Brokerage Accounts:wealthfront/vanguard/etrade (This seems low relative to your wealth)
700k: Paid off House (I just refi'd my house from 3.5% to 3.375% on a 30 year.  Why would I ever give up this low interest loan when every other real estate investment I make charges me more interest for a 5 year ARM?)
450k: Investment in start up Business two years ago. Likely to sell for $2M in next 12 months. (Cool.  I don't have access to these type of investments but wish I did).
650k: Various Hard Money Loans paying 12% interest (I looked into these as well.  12% is an excellent return. Most are returning 8 to 9%)
1.5M: Various Real estate investments: Residential and Commercial (Over half of my net worth is in real estate and mortgaged to the max; I made this reallocation over the last 6 years primarily as a diversification play but it is yielded higher than expected returns)
500k: Other (Is this the Ferrari, Lambo or both?  Just kidding)

Your $6M liquidation event puts you in another league beyond dollar cost averaging in a low cost mutual fund or ETF.  You should be seeking specialized investments in private equity or larger real estate deals.  The general stock market and real estate market are frothy, but I have observed that the best deals flow to the wealthy and well-connected (not me). 

I'm not a conspiracy theory type of person, but as I have come into contact with wealthier people, I'm beginning to see that the wealthy truly manipulate the markets and have access/knowledge not generally available.  All we can hope for is to have enough access to these people and pick up some crumbs.  $6M should be enough to buy some crumbs.


I recently did a quick analysis to see what overall asset classes I was in to get a picture of where things stand since the private equity liquidation. I put $4M of that money into a 3% CD as that still leaves $2m to deploy into opportunities I see.  Here is where things roughly stand:

Bonds: 23%
Cash: 4.5%
CD: 38%
529s: 2.5%
Hard Money Loans: 7.7%
Private Equity: 2%
Real Estate: 12.5%
Retirement Accounts: 4%
Stocks: 6%

I obviously am underweight stocks, although some of that 529 and retirement account money is in the market in managed funds. I have a hard time dropping a large chunk of money when we are at Dow 27k, but I know the Bogleheads would say "what does it matter if you aren't going to sell until Dow 40k 30 years from now?" and there is some wisdom in that thinking.

I think the paralysis is rooted in the knowledge that I got here on my own without the market, have seen the market bring major anxiety to others, and think we are overdue for a downturn. As well, If I can make 3-5% a year on this money for the rest of my life and have a $1.5m income for the next 10 years or so on top of that, I should be in decent shape.