How I’d Invest One Million Dollars Today For A Better Tomorrow

We've gone through exercises on how I'd invest $100,000 and $250,000. Now let's go through an exercise on how I'd invest a million dollars today.

Investing a million dollars is slightly different from investing $100,000 and $250,000. You can more easily afford to lose $100,000 – $250,000. But if you lose $1,000,000, you might enter a deep dark depression and never escape!

Once you have $1 million in investable assets and a paid off primary residence, you don't need to take excess risk anymore. Instead, you can cruise and live comfortably for the rest of your life in low-risk investments.

But given most of us always want more, let's see how we can grow this pot of gold in a responsible manner.

How You Invest $1 Million Depends On Several Variables

The way you'd invest a million dollars depends on how you obtained the million dollars. The longer and harder you worked for your million dollars, the more conservative you'll likely be investing it and vice versa.

The older you are when you obtain the million dollars, the more conservative you'll likely be as well and vice versa. The last thing you want to do is lose a lot of money when you're old and have already won the financial game.

In addition, how you invest your $1 million will also depend on how large the amount is as a percentage of your total net worth. The smaller the percentage, the more you can afford to take more risks.

Finally, the higher your income, the more aggressive you can invest the $1 million. A person who makes $1 million a year can take more investment risks than someone who only makes $50,000 a year.

For the purpose of this article, I assume the million dollars was accumulated through 10+ years of hard work and luck. The luck could include working hard at a startup that finally went public, selling a home you bought 20 years ago, or getting a large settlement from a divorce or accident.

Most people don't spend years accumulating a million dollars in cash and then decide to invest it all in one go. Instead, there's usually some type of windfall or liquidity event that triggers the need to invest such a large sum.

Having $1 Million In Investable Assets Feels Like You've Made It

Achieving a $1 million net worth is a great milestone. You'll likely feel satisfied with your achievement for several months. Then, thanks to hedonic adaptation, it's on to the next financial milestone, which is often being able to invest $1 million.

Once you're able to invest $1 million, you've leveled up your finances. For a good portion of those with a $1 million net worth, a large chunk of that wealth is comprised of their primary residence. Home equity is often considered “trapped equity.” Therefore, if you can actually invest $1 million or more, you may finally start feeling rich.

Being able to invest or spend $1 million gives you plenty of options. You could spend $100,000 after tax a year chilling on a Hawaiian beach before running out of money. Or you could do what most would do and invest that money to make even more money. Having a lifetime of perpetual passive income is ideal.

Let me share my latest experience with investing $1 million and how things turned out.

How I Recently Invested A Million Dollars

In 2020, I didn't have a million dollars in cash. But I did have several hundred thousand in cash and a municipal bond portfolio which I treated as a “cash plus account.” If you own municipal bonds issued by your state, they are state and federal income tax-free.

When I stumbled across a forever home in April 2020, I decided to slap fear in the face and buy it. But in order to do so, I had to liquidate a large portion of my municipal bond holdings.

In total, I put down $1,018,939 and borrowed the rest with a 7/1 ARM at 2.125%.

Based on today's comparable home sale, the $1,018,939 down payment is now worth around $1,700,000 before tax, including $110,000 in principal pay down. Therefore, the three-year gross paper gain is roughly 57%, partially thanks to leverage.

How I'd Invest If I Could Go Back In Time

If I could rewind time to mid-2020, I still would have bought our current home. However, I might have taken out a larger mortgage. Instead of putting down $1,018,939, I could have tried to put down only $550,000.

I would have then reinvested the remaining $468,000 into the S&P 500 when it was around 2,600. If I had done so, that investment would be worth about $750,000 today, or +60%. Meanwhile, my home equity would have grown from $550,000 to $1,100,000 for a total gain of ~$850,000.

There are just two problems with my ideal investment plan that would have returned about $300,000 more.

1) Needed a larger down payment than 20%.

I was competing against a retired couple who was willing to pay $100,000 more than what I ended up offering for my house. Therefore, if I had only offered to put down $550,000, the sellers probably would have passed, no matter how awesome my real estate love letter was.

The listing agent, who also represented me, helped convince the seller I was the lowest-risk buyer and would come through. Between April – July 2020, real estate transactions were getting canceled left and right.

2) Fear of investing in intangible assets

Another problem with my ideal investing scenario is that back in 2020 I was worried the world would never be the same again. My preference was for buying a real asset that could shelter my family in place for nobody knew how long. Even if the house declined in value, at least we'd be able to live a better life while we waited.

I did end up buying some stocks after publishing, How To Predict A Stock Market Bottom, on March 18, 2020. However, I only invested about $200,000 in stocks versus $1 million in real estate. Back then, I was simply too afraid to invest a lot of money in a highly volatile asset that provided zero utility.

We all like to think how we would have invested X amount in Y amazing investment if we could rewind time. It's fun to review things in hindsight. But don’t let revision history get the best of you because the information you had then was different.

Now that the Fed has hiked rates 10 times to 5% – 5.25%, I just realized something fortuitous. Selling a large chunk of my municipal bond holdings back in 2020 was ultimately a good move. The Bloomberg Aggregate Bond Market increased by 7.5% in 2020, -1.5% in 2021, and -13% in 2022.

How I'd Invest One Million Dollars Today

Now that I've shared my most recent experience on how I invested one million dollars, let me share how I'd invest one million dollars today.

If you are someone who wants to earn reliable passive income in a less volatile way, my thoughts on how I'd invest one million dollars will be more relevant.

As a middle-aged person with two kids, my #1 goal is to have 100% control over my time, not to maximize my net worth. I already felt like I had enough money in 2012, which is why I left work in the first place with a $3 million net worth.

If you are someone who is still rapidly trying to build your financial nut, then my suggestions for how to invest one million dollars may not be as relevant. Then again, if you ever have a one million dollar after-tax windfall at a young age, then you're set! You'll also want to invest the money as wisely as possible.

Here are my thoughts on how I'd invest the money. As always, please do your own due diligence before making any investment. Your investments are your decisions alone.

1) Purchase One More Rental Property – $200,000 – $300,000 Down Payment

I have been a landlord in San Francisco since 2005. It hasn't always been easy. However, you get better with more experience. Your leases get more thorough. You become a better screener of tenants. You also become a better negotiator for each purchase.

Owning rental property is an extremely powerful wealth creator. The combination of earning higher rental income and experiencing capital appreciation over time is a powerful one-two punch. You want to ride the inflation wave. Further, once you pay off your rental property, your returns become that much greater.

The window of opportunity to buy real estate in 2023 is open. I expect real estate prices to catch up to the rebound we've experienced in the stock market year-to-date. The goal is to buy 10% below last year's prices, and experience a 5% – 10% rebound over the next 12 months.

If I can't find a great rental property deal in San Francisco, than I will add $200,000 – $300,000 to my private real estate fund and Treasury bond allocation.

I don't really want to own another physical rental property since I'm at my limit of four. But if you have the time to manage more rental properties, there are now more deals.

2) Invest In A Private Real Estate Fund – $400,000

In 2017, I used $550,000 of my rental property sale to invest in a diversified private real estate fund. I sold my rental because it became a huge headache. My five tenants would constantly damage the place, pay rent late, and throw parties where neighbors complained.

Now that years have passed, I can confidently say the reinvestment was the right move. Simplifying life when my son was born was good for my mental health and family dynamics. Better mental health might be worth $500,000 alone.

Overall, my various private real estate investments have returned around 8% – 9% a year with ZERO headaches. The Fundrise Heartland eREIT actually went up 41% in 2021. Although, a couple of investments have also lost money or gone to zero. Hence, there are no sure things and all the more reason to invest in a diversified fund.

The wealthier you get, the more you value time. Therefore, if you've got $1 million to invest, you will likely want to invest in as many 100% passive income investments as possible.

Top Platform Is Fundrise

For most people, investing in a private real estate fund like those offered by Fundrise is the best way to go. Only if you have a lot of capital, time, and interest might it be better to invest in individual private deals and build your own diversified portfolio.

Investing in a public real estate fund or REIT is another option. However, as we discovered during the March 2020 meltdown, public REITs were even more volatile than the S&P 500.

3) The S&P 500 – Up to $200,000

With the S&P 500 trading at roughly 19X expected earnings with mid-single-digit earnings growth, I don't find the index attractive at the moment. I expect another recession to hit as the Fed's 11 rate hikes finally start working their magic 6-12 months later.

I've been investing in stocks since 1995. Since then, I've tried to be more disciplined when it comes to increasing and decreasing my asset allocation to minimize the impact of boom-bust cycles. As valuations surpass the 25-year average P/E multiple of 16.8X, I like to reduce exposure and vice versa.

S&P 500 valuations

That said, the S&P 500 could continue to trade higher given there is a lot of money sitting in money market funds. As inflation and interest rates decline, some of the money market capital will flow toward the stock market.

Money Market Fund Assets Could Drive The Stock Market Higher

Money market fund assets

Although the above chart looks impressive, here's another chart that shows money market funds relative to the S&P 500's market cap.

The below chart essentially shows a lot more cash could go to money-market funds or the S&P 500 is overvalued relative to money market fund assets and the Fed Funds target rate.

money-market funds' assets as a percentage of the S&P 500's market cap

Allocating only up to 20 percent of the one million dollars to stocks at this point reflects my hesitation towards the S&P 500. The realistic best-case scenario is likely +7% from here to ~4,500. But an equally realistic downside scenario is -9% from here to ~3,900.

Therefore, I prefer waiting for a potential pullback in the S&P 500 below 4,000 before investing the up to $200,000. In the meantime, the cash can earn 4%+ in a money market fund and I just nibble in $10,000 – $20,000 tranches.

4) Treasury Bonds or CDs – Up To $200,000

I love buying Treasury bonds yielding over 5%. I'm also 80 percent certain we will no longer see 5%+ interest rates for CDs or Treasury bonds after June 2024. Inflation and rates should be lower by then. As a result, it's worth taking advantage of these elevated rates now.

How I'd invest $1 million - Treasury bonds and CD fixed income table

If I was forced to invest my entire one million dollars in a one-year CD yielding 5.15%, I wouldn't complain. I'd earn a guaranteed $51,500 in interest income, which would be taxable if purchased outside of a 401(k), IRA, or Roth IRA.

After a 9% rebound in the S&P 500 YTD, I'm happy to lock in 5%+ for a total 2023 return of ~11.5%. In other words, I prefer buying a 5%-yielding CD or Treasury bond with a guaranteed return versus buying the S&P 500 at ~4,200 with no guarantee.

On the other hand, I'd rather buy San Francisco real estate and Sunbelt residential real estate because I think their returns will be greater than 5.15% a year from now. The greater the discount I can haggle for a property today, the greater the return in the future.

5) Search For Moonshots – No More Than $100,000

Ever since making a 50-bagger during the 1999 Dotcom craze, I've made it a habit to hunt for unicorns with about 10% of my assets. Some investments, like Tesla, have worked out. Most other investments, like a gas company I bought, have not.

Although investing $100,000 in single stocks, speculative small cap stocks, cryptocurrencies, or startups might sound like a lot, it's still only 10 percent of one million dollars. Focusing on percentages is the main way you can overcome your fear of investing more money the wealthier you get.

Many frugal folks have a difficult time investing larger absolute dollar amounts because our expenses don't grow proportionally with our wealth. Therefore, the goal is to allocate your pot of money with minimal emotion.

It's kind of like a general dispersing troops during a war. Some will be victorious. Some will become martyrs. But if you get too emotional, you might not end up doing anything to defend your kingdom.

Searching For AI Investments

Today, one of the biggest moonshots is investing in private AI companies. Most will fail, which is why I seldom do any angel investing. But some will become massive successes. I already own the majority of large public tech companies with exposure to AI.

To hedge against my failed private AI investments, I will stay invested in San Francisco Bay Area rental property to benefit from the artificial intelligence boom. I expect the area to attract billions of capital and create hundreds of thousands of new high-paying jobs over the decade.

Here's a conversation I had with Fundrise CEO, Ben Miller, on their new Innovation Fund that invests in artificial intelligence. 25% of its fund is in DataBricks, which is one of the leading software AI companies today.

6) Pay Down Mortgage Debt – $0

I usually like to counterbalance a moonshot investment with an equal amount invested toward paying down debt. This way, at least I know there will be a guaranteed return if a moonshot blows up.

However, with guaranteed risk-free returns higher than most people's mortgage rates, it doesn't make sense to pay down any mortgage debt at this moment. On the other hand, if you have consumer debt (e.g. credit card debt) that has an interest rate of over 5%, then pay it off before investing in Treasuries and CDs.

When inflation or the 10-year Treasury bond yield declines to ~3% again, I'll consider paying down extra mortgage debt again. I'd much rather “live for free” by investing in higher-yielding risk-free assets.

If you really want to pay down some debt with your one million dollars, please feel free. Even though it might not be the optimal financial move, you'll experience many benefits, including psychological ones. I've never regretted paying down debt in the past.

7) Invest In An Online Business – $100,000

The future of making money is online. Therefore, it's only logical to try and build an online business empire. If you can couple your online business with a passive investment income portfolio, you can live a very free life.

After focusing more on entrepreneurship since 2018, I see the clear merits of investing in a private online business. For example, I could buy one or two established websites and create synergies with Financial Samurai.

Alternatively, I could invest all $100,000 in Financial Samurai. The $100,000 could be used to update the site, add new features, create new products, record more podcasts, get more marketing help, and hire new writers. I'm pretty certain I can make greater than a 10% return investing in this website.

The problem is, once I try to monetize my joy, my joy quickly dissipates. I just want to write about whatever is interesting or on my mind. If money follows, then great. If not, no big deal because money is not the priority. This “writing strategy” has served me well since 2009.

8) Invest In Venture Capital – $100,000

If you have one million dollars in investable assets, you can now become a limited partner in many venture capital, venture debt, and private equity funds. These funds make investments that are normally inaccessible to you. As a result, investing in private funds offers diversification, access, and potential returns for a fee.

After the valuation compression of many private companies in 2022, investing in private funds that invest in private companies has become more attractive. These funds also tend to call capital and invest over a three-year period. This helps limit timing risk.

The biggest downside of investing in private funds is the high amount of fees compared to investing in real estate or stocks. The second biggest downside is the lack of liquidity if you find yourself needing money before the fund plans to return investor's capital.

9) Invest In Continuing Education – $5,000

After writing Buy This Not That, I've become a prolific reader. I used to think people who read 20+ books a year were crazy or fibbing. Where do they find the time?!

But now I see the light because I understand how much time and effort it takes to go deep into a particular subject matter. We're talking two years on average to write, research, and edit a 300-page book.

Instead of surfing the web before going to bed, I now spend 30 minutes each night reading. At this pace, I should easily be able to read one or two books a month. The knowledge I've gained from reading books will make future posts on Financial Samurai even better.

In addition to buying and reading a lot of books, I'm also going to invest in better podcast equipment and software to interview authors. After finishing each book, I always have many questions I'd like to ask the author.

By adding interviews to my podcast episodes, I should also be able to grow The Financial Samurai podcast even further. A virtuous cycle that's actually fun to do!

Invest Your Million Dollars Carefully

Once you have a million dollars to invest, it's easier to make millions more. However, I've also seen plenty of cases since my 2000 dotcom days where paper millionaires end up with nothing. Not only did they end up with nothing, but they also had to pay huge tax bills on stock options that were once worth something.

It is perfectly fine to make money slowly. Once you have a lot of money, making money slowly becomes a luxury worth enjoying.

With a million dollars, you can make $50,000 a year risk-free today. In comparison, the person with $100,000 has to take huge risks to make a 50% return just to match. Chances are high that they won't ever succeed.

If you have come across a huge financial windfall, don't be in a rush to invest it. Sit on it for several months while you carefully mull over various investment opportunities. See if a million dollars changes your spending habits and your attitude toward life. Hopefully, it doesn't, but you just never know until you have it.

I'll update this post every quarter as conditions change. But for now, this is how I'd invest one million dollars today.

Reader Questions And Suggestions

Readers, how would you invest one million dollars today? If you've ever had a million dollars to invest, how did you invest the money? I'm looking for as many good ideas as possible.

Track your finances in one place with Empower, the best free financial tool online today. Not only can you x-ray your investment portfolio for excessive fees, you can also better plan for your retirement cash flow.

For more nuanced personal finance content, join 60,000+ others and sign up for the free Financial Samurai newsletter and posts via e-mail. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. 

About The Author

60 thoughts on “How I’d Invest One Million Dollars Today For A Better Tomorrow”

  1. Sam great article, why not do an article how you’d invest this money in dividends etf stocks? Like SCHD

  2. The financial advice media and literature affirm over and over that we should not try to time and outguess the market. They say that even experts and fund managers often under-perform it. This opinion is so common, it sounds like a consensus.
    But we also have blog posts such as this one which advocate the opposite, and they are received as just as sound advice as the other type.
    So what is the resolution of this apparent contradiction?

    1. A conundrum, isn’t it? That’s why this post is not investment advice for you. It is how I’d invest $1 million today and how I have invested $1 million. I’m a writer, not a wealth manager or financial advisor.

      If you want tailored financial advice for your household, I would hire a fee-only advisor.

      Here is a relevant post: active versus passive performance

      1. Hi Sam,

        I am not sure I understand your reply. My point was not about my own investments or wishing to get financial advice from you.

        I was just pointing out an (apparent?) contradiction that I note in the investment literature online: the constant affirmation that passive investment is better, but also the constant active investing.

        Thank you for the link to your other post. It indicates that (apparent?) contradiction even in yourself, because you also say that passive is better, but are actively investing. To be fair, in that post you do provide reasons for actively investing: 1) hope, 2) marketing, and 3) pedigree. You also say “we all like to dream”.

        But aren’t these kind of weak reasons? I am trying to understand why you invest actively. Not as a provocative or insulting question to you, whom I appreciate and very much respect, but just out of true curiosity: why do you invest actively? Is it just as a kind of fun? Isn’t that kind of expensive entertainment, though?

        1. No worries. It’s due to the chance that I could outperform. Feel free to share what you think are some strong reasons.

          When I was 22 years old, I turned $3000 into $155,000 within six months. I then parlayed that money into a down payment on a condo that cost $580,000 in San Francisco in 2003.These investments helped enable me to retire in 2012 at age 34. If I had just stuck with index funds, I wouldn’t have been able to.

          My goal is to outperform. And one of the ways to do so is to take risks outside of just an index fund. Other ways include increasing receiving rate, investing in real estate, and alternative investments.

          If I never try, but I will never outperform. So I always like trying even if there is a risk of underperforming.


          How about you? Tell me about yourself. Where are you on your financial journey? How are you investing your portfolio and how old are you? The answers to these questions will help me understand where you are coming from.


          1. Thank you for responding candidly, and for your interest in my own situation.

            If I understand you correctly, you seem to be saying that, while you understand that active investment will cost you more in terms of statistical expectation (that is, if you could live a thousand lives actively investing, the average would be *worse* than the average of passively investing in those thousand lives), you still think that active investment is the best choice because that (averaged) cost is worth the chance to get to a whole new level of wealth.

            This seems to be the exact argument followed by those who play the lottery: pay a little bit for the chance of truly qualitative change, even if, on average (over a thousand hypothetical lives), you lose.

            This is interesting because in decision theory, the “best choice” is *defined* to be that with greater expectation. By decision theory standards, you (and the lottery player) are being irrational.

            However, the lottery player could tell me that they are not living a thousand lives, but only one, and *not* playing the lottery *guarantees* mediocre wealth while playing the lottery opens the door to the possibility of truly great wealth, and they are willing to pay for that chance.

            It’s a compelling argument, at least intuitively, that seems to question the decision-theoretic standard definition, at least when the opportunities for playing are very few (or, like in the case of life, a single one). I have been wondering if any academic mathematicians or economists are trying to work on this question. I have not heard of that so far, but I didn’t look hard for it either.

            So, yeah, perhaps you and the lottery player have a point! Which means that all this talk about passive investing that seems to be the consensus may be missing a very important point.

            About me: I just learned the HENRY thing in the post you referred to, and I guess I am one. I started working for real at 36 after graduate school and was penniless then. I am 52 now. I had a $150k-$200k salary for about 13 years, then got a job paying more like $600k two years ago. I have around $400k in stocks and $1M in 401k. I have 100% in stocks (index funds) because I want the average high growth and I feel I could weather a crash and wait for the recovery, should it come to it. Even though I am investing in index funds only, it could be said I am still “actively investing” in the sense that I am not diversifying in exchange for more predictability (which I could do by investing in bonds and perhaps real estate funds). So I am kind of playing the lottery a little bit too. Of course as I near the age of actually using the money, I will gradually diversify more. I am still learning a lot (from folks like you!) and don’t use a lot of tools I could be using, such as (I think but not sure!) backdoor Roth IRA.

            1. “ you still think that active investment is the best choice because that (averaged) cost is worth the chance to get to a whole new level of wealth”

              Nope. Only about 25% of my public investments are active investments bc I don’t think can outperform long run. But I sure wish I had more apple stock in my portfolio!

              Glad you are still enjoying all your doing at 52 years old. You may enjoy the post: net worth targets by age to keep you motivated.

            2. I came here from the podcast and thought I’d bring my own two cents. Purely passive investing doesn’t really exist. Every investor has to make decisions about asset allocation, including whether to invest internationally and how much to invest in equities vs. bonds and other assets.

              The S&P 500 itself is partially an “active” index with membership determined by a committee. Some large companies can be excluded due to the rules determined by the committee (

              When you purchase an index fund, generally you purchase a cap-weighted fund, but that is an investment decision. You could decide to purchase an equal-weighted fund or a value-weighted fund, for example.

              What I’m getting at is that all investment decisions exist on a spectrum, from passive to active. Setting aside a small percentage of your assets for a more active approach isn’t really at conflict with investing in index funds. It just demonstrates a higher risk tolerance and willingness to tolerate tracking error. Personally, I don’t have many stock picks anymore, but that is just because I don’t have the time/skills developed to have confidence in my decisions, not because I don’t believe there is a role for active investment.

  3. Atlanta Niner

    Sam, what do you think of Fundrise’s Opportunistic Credit Fund? Have you invested in it?

    1. That is actually one of the most intriguing funds right now. I spoke to Ben Miller (CEO) and another associate at Fundrise and they are very active there. They see a lot of opportunity to refinance debt to help good projects, lower their costs and finish their projects. This fund is number one on the list right now and I plan to invest.

      Because Fundrise has about 20% of its assets under management in cash, I can take advantage of dislocations in the market right now.

      Thanks for the reminder actually. It is on my to invest list.

  4. How do you find online businesses to purchase? Sites like Flippa and Empire flippers? Or somewhere else?

  5. Largest it’s ever been a little under 19 T. Before Covid it was around 5 T. The high was almost 22T.
    Now how large is the stock market? 85 T? Not sure.
    If people get tired of cash it would not take much cash to come in to jump start the stock market. Plus federal and states keep giving people $$ for not working. Forgive student loans ? Mega free $$. Covid $$$ still going out. Co just started sending $$ out Covid relief to people. There is so much Covid $$ not spent yet.
    Print $$ = inflation the government will not stop printing $$ so inflation might slow down but not 2% ( the holy grail ). The Fed is screwed.
    Also take a look how long it takes for M1 to be reported. We are almost two months behind actual,why?
    I believe the market will run to 50,000 then go flat for years. The last bull run in my life time maybe yours. I could be wrong but what if I’m right.
    Remember the boomers were going to retire and pull $$ out of the stock market and it was going to crash. We heard that stuff for decades. Did it happen ? Nope
    I forgot your book to take a picture in cabo. Very sorry. Keep up what you do so well.


  6. You mentioned books, do you actively read the press as well? If so what newspapers or sites do you read?

  7. I have lost $800k and it stung a lot. I sold out out of my international fund in order to tax loss harvest near the bottom of the 2020 COVID decline. Instead of doing what I should have done and exchanging into another international fund immediately, I thought for sure things couldn’t rebound too fast because COVID was going to be here for awhile. My plan was wait 30 days and go back into the same fund.

    Oops, it shot back up and I had to buy back in higher to get my international exposure back. So instead of booking my near $1mm loss for free I actually lost it. I even knew better, but I thought surely the market will be down for a month in a pandemic. Everything is back up now but I could have been $1mm higher today. You just never know what the market will do with absolute certainty.

    My take away is stick with your fundamental investing strategies and don’t try to over game it. If a million extra bucks fell in my lap I would invest 40% into the stock market, 30% into bonds/CDs, 20% into real estate funds, and 10% into cash, which is exactly the percentages I plan to hold long term. If the market is flat or down, I’ll use my cash or maturing bonds to rebalance and I’ll do my best not to dwell on what could have been.

    PS- my experience with direct angel investing, angel funds, venture funds etc has been poor to mediocre over 12 years. I now enjoy seeing my former 10% of my investible assets allocation get smaller and smaller as everything else out strips it. Now it’s down to 1% of my net worth and no longer have to stress about it.

    1. That does sting, but at least you got back in and rode a nice rebound. And, you have enough money to lose $800K in the first place!

      Having multiple millions is nice. And if we are happy with her spend, very powerful preservation is in order.

      Thanks for sharing!

  8. Nilesh Patel

    Sam ;
    Last week the VIX gave a positive signal but I am not convinced that we can break above 4200 on the S&P. We have a lot of hurdles ahead with the debt ceiling ( which I think will and always resolves though market can struggle till then) , inflation data, a confirmation from the feds that they have are done raising rates ( not till early next year) and finally earnings which companies have surpassed lately after a lowered consensus. So overall I am not % bullish but cautiously hopeful

    1. I’m not very confident in the S&P 500 breaking about 4200 either. It is interesting to see that they’re in the last big debt ceiling debacle in 2011, the S&P 500 corrected by 15%.

      But eventually, we should move higher. Just not hopeful for the rest of the year.

  9. I am bullish because consumers (note the word I choose for all of us), consumers will continue to consume and I don’t see much evidence the level will change significantly. What is consumed will change, definitely. Stopping consumption goes against the daily proddings we hear from all sources to consume consume consume. How can we better ourselves without changing our stuff? The average person is in a cycle of too much. Aren’t we all looking for the magic solution to successfully diet, simplify, declutter, slow down, focus, clean out, have a better life?

    Not saying folks don’t have good intentions. We stay home more, and let Amazon (or UPS) bring stuff to us. We shop differently than we used to. We switched to led bulbs. We declutter more. We diet, maybe even exercise. We sell or donate or give away what we don’t need. But we stock up.

    I could make meals for a month with what I have in my kitchen. I have plenty of clothes, books to read, projects to entertain myself, office supplies, dishes, gadgets and bath towels. I am not going to run out of toilet paper or disinfectant or scratch paper.

    Don’t misunderstand, I am grateful. So many of us are able to focus on our quality of life because there aren’t missiles dropping, or blackouts or shortages or pandemics raging. Some of the risks of everyday life are leveled out for those of us who are fortunate enough to have money. We don’t have to worry about when we can charge our phone or if we will have four walls and a roof tonight. That allows most of us consume.

    Is it natural to invest if we can’t consume?


  10. Hi Sam, I can’t give you a bullish take on the S&P 500 in the short term to medium term. Long term (20+ years) it will do fine, but probably not exceptional given the valuation starting point.

    If you are having a hard time investing capital right now I am very bullish on international stocks. They are dramatically cheaper than US and have lagged for a long time. Also a lot more value stocks in Europe, which are likely to outperform over long timeframes. Looking out to a 5-10 year timeframe, I would expect average to above returns for Europe, Japan, and emerging markets. For the US, we’re likely to get returns of 0-5% annualized over that timeframe. As long as you are border agnostic, go ahead and invest!

  11. Good post. How long do you think to lock money away at 4.5-5%? 1-3 years seems like a no-brainer, but 5-7 years at 5% here in the UK is available. Tempting for a piece of mind but you would hope the average market return over 7 years is likely higher than 5%. Appreciate all the work, Sam.

  12. It is always fascinating to read your insights, Sam. This input is from your reader who sent you the pictures of your BTNT book from Bali and Penang. Thanks for thinking hard for us and sharing on how to put our money to work harder and safer! We may not be doing what it is supposed to be to maximize the return on our investments especially counting on opportunity costs. We bought real estate properties with 100% cash nowadays because we don’t want to take a high interest rate on investment properties, 7.5% rate is too much to pay. We have been buying lots/buildable land in established subdivisions and some made 100% within 3 months (exit in late 2022), still trying to sell some of the lots at 33% annualized return and let’s see if the market will still reward us with that return at the current time. We also bought residential property over $1M with cash and run it as short term rentals, the short term rentals are not doing well, perhaps the income will just pay for the property tax and insurance, since we don’t have any mortgage, it is less pressure. What we are aiming for is the appreciation because we are in Austin, TX. We have invested in a lot of real estate syndications like those in Fundrise, but we invest with private syndications and the returns on the investments that have been sold were around 20 to 25% annualized. However, these syndications will no longer perform at this rate. So far, the preferred return is around 7% annualized, to be exact, some only pay 4% annualized but there is an anticipation to capture more at exit when the properties are sold. Besides all of those, some crytos, some stocks, trading commodities daily, and now looking for waterfront property to invest with 100% cash if possible. Good luck everyone!

  13. Why might the market go higher? In a word, inflation.

    I am not bullish, but it is possible that inflation could drive stocks higher.

    Look at M2 money supply growth.

    Look at cash from CARES Act and ARPA sitting unspent at the state government level.

    Look at Congressional inability to control spending. They cannot even agree to decrease the rate of increase, let alone spend less.

    Look at the increase in interest on the Federal debt (combo of higher rates and higher debt) which puts more money into private investors to spend.

    Eventually inflation rules the day without significant efficiency gains.

    The rate of inflation is estimated to decrease, but no one expects prices to decrease.

    If revenue units stay flat, revenue dollars will increase and earnings could move up with any efficiency gains at all.

    Rising labor costs support increases in nonlabor (technology, capital, machinery) investments which should improve margins and EBITDA.

    Short answer, the same company volume 10, 20, 30 years ago compared to today shows higher numbers today due to inflation alone. And, that translates to higher stick prices.

    Just sayin’

    Love your stuff.


  14. Roy David Farhi

    I like the slow steady drip of dividends into my account Sam because even with a plethora of growth stocks and the like, the rest of the portfolio combined generates 4.23% a year on dividends. I mean, if one has 3-3.5 million in there as a rough example and never touches the principal, they are still off the top of my head receiving 12,500 monthly to live on and you throw in a SS check or the like and voila, 15K a month. I don’t drive a Lambo, live way below our means and have no bad habits to deplete funds either. So life is pretty good. Took a long time to get there and we will be even better in the future when this market hopefully comes back. Annuities? I can create my own I think with some of the Realty Ones/LTC/VOO/SCHD/ZIM and the like out there.
    P.s. have a rental with a balance of 136K so thinking of paying that off to generate another 1600 to 1700 a month of income after taxes and Insurance.

  15. Thanks For the Post Sam!. I’ve been sitting on a little over $1mm for close to a year now. Cashed out refi a couple of investment properties at 3.25% 30 years. Sold another that was not performing well. Currently doing 3,6,9 and 12 months treasury, some on iBonds. I feel paralysis and the feeling of not knowing what to do with the money.

    This post helps. I’ve been thinking about another rental (NY) since this is where I’m more familiar with, but I really don’t want to deal with tenants any longer. Have thought about sunbelt real state with a property manager to go with it. Also, I can’t no longer deal with the volitivity of the market

  16. Can you write a bit more about investing in quality VC funds? Obviously they’re not as easy to buy into as mutual funds or individual stocks, and my impression is that the best ones are particularly selective about their LPs. How were you able to invest in Kleiner Perkins – did you know someone there?

    1. Yes, I know the head guy there. Went hiking with him at Joshua Tree for a couple of hours. Friends of friends to from business school.

      A lot is networking and also whether you can provide any value to the fund or the companies. A lot of people have money. Having a distinguishing feature, like connections, experience founding a company, a large social media platform, etc can help.

      I was just at a VC event at the SF Giants game yesterday, where I am a limited partner. There I met a guy who started an AI company that creates new music. Diplo and the chain smokers invested in the seed round. Interesting stuff!

      I think if you stick with the top 10 VCs in the world based on their track record, then you just stick with it with every single vintage year you can enter.

      I need to do a better job at leveraging my platform to get into interesting deals.

      I wish I was hungrier to make more money. But that fire has gone from a blaze to a simmer. Example, I spend three hours at the zoo with my 3-yo daughter yesterday. It was a really special moment as we rode the train twice and said hi to her old friend Norman the gorilla.

  17. Have u looked into supervest? B2B loan co-funding similar to lendingclub but short term and higher yield.

  18. Bay Area jonny


    Thanks for this post, it’s timely. I’m actually considering buying a rental myself bc SF valuations are pretty decent right now.

    I just got quoted a 7.5% interest rate (!!!). Bc of this rate, the property won’t cash flow (negative 1-2k per month). How do you think about investing with these numbers the way they are? Thanks for the advice

    1. That’s an expensive mortgage rate. But I expect mortgage rates to continue going down over the next 12 months. Another good CPI print today.

      A better strategy would be to buy a new primary residence to get the lower mortgage rate. Live in it for a couple of years, and then rent it out. It’s hard to lose $2000 a month.

      A higher down payment?

      1. Bay Area jonny

        Thanks for the reply.

        Not wanting to go over 25% down payment. Current house will also lose 2-3k per month if rented out. Guess I’ll be waiting for rates to go back down before striking

  19. Sam, do you know how many of your readers actually have $1M to invest? What are your readers’ demographics and income levels?

  20. Very timely post for me… thanks!

    I cofounded a startup tech services business in 2005 and we sold to a PE backed firm about 10x our size in late 2022. We got the exact cash deal we wanted, which included a sizable equity rollover into the larger firm. The plan is to grow the company about 3x and sell to a larger PE firm in about 3-4 years. Significant risk, with significant upside!

    After the transaction, I’ve kept all of the funds (about $1.5M) in treasuries, and money market accounts mulling over where to invest over time.

    We’re currently 25% equities and our principle residence is paid, so we’re in a good spot.

    We own a physical rental property and had purchase a buildable lot a couple of years ago.

    Invested about $150K in several crowd-funded real estate ventures (apartments, industrial, and self-storage).

    My brokerage (personal capital) gave me a call in December and encouraged me to increase my invested assets to over $1M to save on fees, but I declined. Waiting for the impact of the Fed rate increases, before considering a significant investment in equities.

    I appreciate the insight and frequently send article links to friends!

  21. Sunbelt residential and commercial warehouses through Fundrise = 40%, 7-10 year fixed annuities that yield 4.5-5% (defers income that I currently do not want to show for tax purposes + gives me the opportunity to annuitize the money into an income stream later if I do not withdraw it in big chunks = 30%, Money market and T-Bills that will eventually go into equites = 30%

    1. Thanks for sharing. FYI, I spoke to Fundrise the other day and they are active in the income interval fund doing credit deals.

      They see a lot of opportunity, providing mezzanine, debt or bridge loans to good projects that have seen there mortgage interest rates rise. So they are coming in and refinancing at a slightly lower rate.

  22. Another great post Sam. Makes one really think – how aggressive am I willing to get? Or is 3-5% enough?

  23. I appreciate your broad definition of “investment”. Most people don’t think of CDs or Treasuries as investments but if you can make 3-5% with essentially no risk, seems like a great investment.

  24. Thanks for your post as they are helpful and very practical. I have 2 questions:

    1) Fundrise fund liquidity – what’s your holding time on this investment? I like its investment strategy but liquidity is my primary concern

    2) what are your thoughts on retail centers? I own 1 in Houston area and would like tmore in the near future. This is the reason where i value liquidity so I can come up with down payment.

    Thanks again for all of your insights!

    1. 1) my minimum time horizon for holding is five years, with a target holding period of ten years.

      2) it seems like retail centers are in a socially declining business due to online retail. So depends on what type of retail stores are in the center. If they are all made up of national food chains, maybe it’s gonna be amazing.

  25. Oil, treasuries and RE- divy stocks, inflation sensitive investments. From 1971-80 RE went up 198%, oil will continue to be essential for all worldwide economic activity
    And T Bills. If allocated correctly you can maintain your Tbill position and use the collateral to buy more RE. I am waiting for the crash in 2026 based upon 18 yr historical cycles.,
    Also Apple all day long.

    1. Sounds good. If you are waiting for a real estate crash in 2026, I think you’re going to be disappointed. Let’s revisit this post in three years and see what happens.

  26. One of the best investments I have is a lifetime Jackson National annuity. It pays 5%, the monthly payment never goes down and can only go up, has a death benefit equal to the value of the principal at death, and I get an automatic 6% increase (on paper) in the principal value that can raise my annual payout if it takes the value over the amount the current payment is based on. The annual payment then resets at the higher amount. Plus I’ve been happy with the job their investment managers have done over the years.

    1. Roy David Farhi

      Like Jackson National as my Stock Broker recommended the same. Is there a particular one (fund or type account)
      Deb that does exactly as you are saying? I could probably go 500K without much worry and take it to the bank each month. Thank you in advance for the advice.

  27. How about an annuity? I sold $300k of ETF and invested it in the 3-year term annuity at 4.35% rate last month. My investment (stock, bond, 401k, mutual fund) value decreased by 30% last 1 year. I wanted to have a steady increase without paying a tax, so I transferred some of my ETF to an annuity because also I don’t need to pay taxes until I withdraw money.
    I own 3 rental properties, 2 in Phoenix and 1 in Maui beachfront, which I plan to retire in 2030. After expenses and depreciation, I barely make a passive income because one of my properties has a 5/1 ARM and the rate went up by 2% (max) and now I pay 6.0%. I am hoping the house price starts going up and I can raise the rent! I wonder if I should have paid off my mortgage instead of buying the annuity…

    1. That’s a good question. 6% mortgage is greater than 4.35% annuity, so perhaps yes.But mortgage rates will go down over the next 12 to 24 months, so the spread will narrow.

      Beachfront property in Maui. Sounds amazing! I will try to get there sooner if you can.

      I am not a fan of annuities at the moment. Maybe come back to me when I’m 60 years old in the year 2038.

  28. Interesting post! At this time, I’m looking at a private multi family RE Fund – syndication with $100K min investment for accredited investors. A friend is one of the principals but it’s always a risk. The numbers look good on paper and they focus on the Phoenix and Tucson areas.
    How’s this sort of syndication compare with Fundrise?
    Are the risks associated with Fundrise the same? Could investments in Fundrise go belly up as well?

    Thanks for all that you do to teach us!

    1. I’m Fundrise obsessed. They actually have a podcast called Onward, if you’re interested. The true value is in Ben Miller (Founder). He’s absolutely paranoid about the downside, as am I. I’ve realized, whatever comfort I have in the portfolio is mainly due to his judgment/wisdom. He never tries to shoot the moon, but seems to manage risk very well. Just my two cents…

    2. I don’t know about the phone you’re speaking of so it’s hard for me to know.

      When it comes to marketing, everything looks good on paper. Truly, everything looks great, but not everything performs according to plan. So I would just discount the returns by 30% and then go from there.

      See comment below about Fundrise. My history is that I started talking about investing in heartland real estate in 2016 and Fundrise had a heartland eREIT that consisted of many residential properties. Or I’ll look back, then was aligned and it is aligned now, so I partnered up with them.

      I like the CEOs conservative nature.

      1. Thanks for your responses!
        I’m leaning towards Fundrise, but curious when you mentioned in the article, that you lost some money in investments, was that in Fundrise?
        And how’s Crowdstreet compare to Fundrise?

        So to get started in Fundrise, are there any particular things I should look for?


  29. Thanks for sharing your experience, how fascinating. The most I’ve ever invested at one time excluding my house purchase was about $130,000. The reason was I goofed up my estimated taxes and way overpaid them and thus had a huge tax refund. I felt foolish for letting that much money sit in the governments bank accounts for so long. But at least rates were good when I got the money back. I decided to put most of it into treasuries which were paying well at the time, and I put about 20% into ETFs. I wanted a guaranteed return on most of the cash and felt comfortable with roughly 25k in equities.

Leave a Comment

Your email address will not be published. Required fields are marked *