7M NW, suggestions mind shift and planning for next phase of life

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wrongfunds
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Re: 7M NW, suggestions mind shift and planning for next phase of life

Post by wrongfunds »

The question for the OP is can he unwind it e.g. let us say his NW is concentrated on a single stock outside retirement account. Can he realistically ignore the tax consequences and do "the right thing" by selling them and buying balanced ETF/fund?
smitcat
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Re: 7M NW, suggestions mind shift and planning for next phase of life

Post by smitcat »

wrongfunds wrote: Tue Sep 21, 2021 4:28 pm The question for the OP is can he unwind it e.g. let us say his NW is concentrated on a single stock outside retirement account. Can he realistically ignore the tax consequences and do "the right thing" by selling them and buying balanced ETF/fund?
"NW distributed as 75% broad market index funds, 15% house equity, 15% cash. I have never invested in bonds, and do not anticipate being ready to start that now. Cash has built up due to a large severance payment and not investing new money for about 1.5 years."
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8foot7
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Re: 7M NW, suggestions mind shift and planning for next phase of life

Post by 8foot7 »

Turn this problem then

“ We also have the "problem" of several hundred K in cash with more coming every month.”

Into your solution. Put existing cash plus new spare cash into a HYSA and then pay cash for your new home once you have enough cash. That way you know you can afford it because you have the money, you haven’t sold stocks, you haven’t bought bonds, and you still have all the money you had invested before.

A little mental arithmetic, sure, but personal finance is personal.
vg55
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Re: 7M NW, suggestions mind shift and planning for next phase of life

Post by vg55 »

my response is limited to the vacation home question.

If you buy something within a reasonable drive, in a wonderful location (e.g. on a lake, on a barrier island, etc.), and you use it to strengthen family bonds (e.g., summer vacations, holidays, retreats, board games, time with each other without devices or tv, campfires, etc.); then IMHO this is a great use of money.

We had a cabin on a lake in PA -- no cell service -- where family would gather with and without us. The grandchildren (3 cousins) learned to fish from grandpa while boating on the lake. We often took family hikes in the area, went eagle and bird watching, and learned about mushroom picking. When the cousins were in their college and post-college years, they would gather at the cabin with friends for a new years celebration. Many, many family experiences and stories of "the cabin."

Selling the cabin was a mistake. Live and learn.
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deemma
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Re: 7M NW, suggestions mind shift and planning for next phase of life

Post by deemma »

vg55 wrote: Wed Sep 22, 2021 7:07 am my response is limited to the vacation home question.

If you buy something within a reasonable drive, in a wonderful location (e.g. on a lake, on a barrier island, etc.), and you use it to strengthen family bonds
This is a main reason we've considered getting a water/beach front property. As our kids age, it's (hopefully) a natural way to stay close and see each other. We're hoping (unrealistically right now) that we can thread the needle by buying a primary home that is on the water.
8foot7 wrote: Wed Sep 22, 2021 5:47 am Into your solution. Put existing cash plus new spare cash into a HYSA and then pay cash for your new home once you have enough cash.
This is one motivation that we've built up cash. Any suggestions for HYSAs?
daheld
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Location: Midwest US

Re: 7M NW, suggestions mind shift and planning for next phase of life

Post by daheld »

deemma wrote: Sat Sep 11, 2021 11:09 am
  • $7M+ NW
deemma wrote: Sat Sep 11, 2021 11:09 am Mow my own lawn
I've got nothing to add, just want to say this is my goal. :beer
schrute
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Re: 7M NW, suggestions mind shift and planning for next phase of life

Post by schrute »

deemma wrote: Sat Sep 11, 2021 11:09 am Bogleheaders, I would love to learn from your experience, wisdom, and perspectives in a judgement free, troll free, and non cynical way if you are open to that.

Context
  • $7M+ NW, mid 40s, spouse and 2 kids in middle school.
  • NW distributed as 75% broad market index funds, 15% house equity, 15% cash. I have never invested in bonds, and do not anticipate being ready to start that now. Cash has built up due to a large severance payment and not investing new money for about 1.5 years.
  • Yearly combined comp $800K+ with my comp about 80% of it in big tech. This is a new thing, we were making 300-400K for the last 10 years.
  • Zero debt. Grew up poorer than dirt, always LBYM. Yearly expenses are ~$70K in a HCOL area.
  • Okish spending money, admit that we could spend more. We both need to see value in the money spent though. For example, fine staying in an ok hotel at $200 a night versus a more luxurious one at $400 a night even though the additional cost is (probably?) inconsequential. Mow my own lawn since mowers want $75+ and it takes me 45 mins to DIY even though I get zero enjoyment from it.
Situation
We're thinking of moving from the States to Canada for family reasons. Anticipating $2.5M+ CAD for a house in a location that works for us. As part of the move, total yearly comp would likely drop to ~$500K USD.

Questions:
  • How would you feel about the financial situation given that stock market "could" drop 50% or more. The tech gravy train could end at any moment. More than half of my future comp is tied up in RSU stocks that vest monthly over a 4 year period.
  • Don't troll or judge please [not flexing or anything like that], logically feel ok financially. Emotion is a different story. Spending 2.5M+ on a house is more than I'd ever dreamed realistic. Spending more than $5K on a family of 4 vacation is a difficult mental hurdle. Buying a vacation house seems amazing in theory, but a burden and risky in practice. Is it really ok to open up the purse strings to luxury? If you've been in the same position with similar poor kid background, did you ever get over the poor kid mentality, always hustling, optimizing costs, DIY, discount codes, $ as a primary factor in decisions etc? If so, how??
  • How the heck do canadians afford $1M+ houses when the average income is so low comparatively to the US?
  • How to move millions of dollars from USD to CAD in an exchange rate/tax efficient way?
How much of your TC is split between you and your wife? Are you both at the same company?
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