What would you do with $15M?
Page 1 of 4 123 ... LastLast
Results 1 to 10 of 83

Thread: What would you do with $15M?

Hybrid View

  1. #1
    Junior Member
    Join Date
    Jul 2016
    Posts
    22

    What would you do with $15M?

    Hi All,

    I am suddenly about to be a "high net worth individual"! We are selling our company, should close in a couple of months I should be sitting on over $15M! It looks like financial independence may actually become a reality!

    Needless to say, I now have a new thing to worry about : how do I manage the money? I want to "retire"... I want the freedom to pursue a variety of hobbies, and travel and only work if I choose. I am in my early 50's, am married and have 2 kids that are still in school.

    This should be no problem with this kind of money. But I've always been a frugal, fiscally responsible type of person and, well, proper stewardship of this windfall just seems like the right thing to do. I'd like to invest it, live off the return with a conservative safe-withdrawl rate of, say, 1.5% after taxes.

    At least half the windfall will be held in a holding company (for tax deferral - part of the sale deal structure) and we will need to pay tax on any value we pull out of it. But both myself and my wife are shareholders in the holding company. I have set up a Family Trust that will allow us to do some investment income splitting with our kids (with non-holdco investments).

    I have no desire to pick stocks. I plan to either do passive investing, or have someone else actively manage our money.

    For our RRSPs, I have been a couch potato investor for many years. I understand the theory of passive investing and it makes sense to me. But I've never really tracked my performance. (With an account that you are contributing to monthly with annual top-ups and infrequent rebalancing, it is hard to evaluate return on the back of an envelope I find.)

    So, although I like passive investing, I don't have completely confidence in it... not when my family's future is at stake. I believe that there maybe stormy waters ahead in the global economy and... sometimes I start falling into the dangerous trap of thinking "this time its different" With the way interest rates have been for so long, and global fiscal experiments like quantitative easing. Maybe having some financial professionals on my side who contemplate these issues 24/7 is not a bad idea? But as a closet couch potato, I obviously want to minimize management expense and have a distrust of financial advisors - they're just trying to get a comission

    So... thinking about low-maintenance active management, I've talked to my bank's "High Net Worth Wealth Management" branch. They have their actively managed funds with fees that start at 1.3% and creep down the more money you have invested in them. At $5M for example, their rates are 0.85%. This program has a $1M investment threshold just to join the plan.

    I have considered talking to a 3rd party active management house like Steadyhand. Their rates seem similar to the bank.

    I've heard of TIGER21, which seems like an investment club for rich people (not sure if I'm rich enough to join though).

    My thought at this point is maybe give the bank, and Steadyhand, each $2-3M and see how they do - how I like the service, how much confidence they instill - and in the meantime just couch potato the rest. Also thinking that I should have the active managers focus on equity, and focus my own management efforts on fixed income. Since fixed income is typically safer but with less return, it doesn't make sense to me to have to pay the active MER's for portions of the money that are in fact much lower maintenance investments. (Does that make sense?)

    I also wonder if there are resources for "high networth individuals" that I am not tapping into.

    So... why am I posting here? (Other than to flaunt? Seriously, I hope it doesn't sound like that, but this expected change is already making me feel self-conscious about my good luck.) I'm wondering if people have any comments about "what would you do in my situation". How would you manage this windfall? Also, do people here have any insight into the HNI resources I wonder about?

    Anyway, looking forward to any responses. Sorry to be long winded but this kind of thing doesn't happen to me every day.

  2. #2
    Senior Member
    Join Date
    Jun 2016
    Posts
    1,299
    I've heard of TIGER21, which seems like an investment club for rich people (not sure if I'm rich enough to join though).
    Yes, you are You need at least 10 mil to join and 3 references...
    I'd invest maybe 30% in fixed income include GICs ladders, part would invest with some reputable wealth management firms like Gluskin .... maybe would consider private real estate...

  3. #3
    Senior Member My Own Advisor's Avatar
    Join Date
    Sep 2012
    Location
    Ottawa
    Posts
    4,730
    Really? $15M??

    Couch Potato - 50% bonds and 50% equity.

    Live off dividends - you are set and so are your children's, children for life if you don't spend the capital.
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

  4. #4
    Senior Member
    Join Date
    Aug 2013
    Posts
    1,726
    Quote Originally Posted by StayThirstyMyFriends View Post
    Sorry to be long winded but this kind of thing doesn't happen to me every day.
    Sorry to be short winded but your story is much too inconsistent for a detailed response.

  5. #5
    Senior Member
    Join Date
    Feb 2016
    Location
    West coast
    Posts
    522
    I thought that "M" in this context was the Roman numeral for thousand. And adding a line above made it 1 million.

    Assuming the OP is speaking of 15 million, well, that sum might buy a nice house in East Vancouver that could be rented out for $1,500 a month or so.

  6. #6
    Senior Member
    Join Date
    Jun 2016
    Posts
    1,299
    Quote Originally Posted by Mukhang pera View Post
    I thought that "M" in this context was the Roman numeral for thousand. And adding a line above made it 1 million.

    Assuming the OP is speaking of 15 million, well, that sum might buy a nice house in East Vancouver that could be rented out for $1,500 a month or so.
    To rent for $1.500 he can buy 600K house in GTA

  7. #7
    Senior Member lightcycle's Avatar
    Join Date
    Mar 2012
    Location
    Kelowna, BC
    Posts
    307
    Quote Originally Posted by Mukhang pera View Post
    I thought that "M" in this context was the Roman numeral for thousand. And adding a line above made it 1 million.
    Depends on which nomenclature you are adopting.

    Common parlance has K, M and B denoting Thousand, Million and Billion. This from the French etymology (although with much older Greek and Italian roots if you dig deeper). Is used for more than just financial figures: kB (kilobyte), km, kg, etc.

    The Roman etymology is used more within internal financial circles, M, MM, MMM for a thousand, a thousand thousand (million) and a thousand thousand thousand (billion).

    Both are correct as long as you make it clear which system you are using and do not mix etymologies. Don't write K for a thousand and then MM for a million.

  8. #8
    Senior Member
    Join Date
    Feb 2016
    Location
    West coast
    Posts
    522
    Well thanks for that, light.

    Any insights to share on what the OP should be doing with his Ms? I suggested a Vancouver special. Gibor correctly pointed out that a much more modestly priced house in the GTA would show a better return. Maybe just buy up a block of 'em and be done with it?

  9. #9
    Senior Member dubmac's Avatar
    Join Date
    Jan 2011
    Location
    Western Canada
    Posts
    1,039
    Consider MAWER investments. MAW105 http://www.mawer.com/our-funds/fund-...balanced-fund/
    good balance in investments, low fee, few worries.
    I mean - 15M in MAW105 would produce 343K per year in income alone. I could live off 15% of that per year!
    That said, you have few worries. Congrats.

  10. #10
    Senior Member
    Join Date
    May 2009
    Location
    Ottawa
    Posts
    2,548
    Quote Originally Posted by StayThirstyMyFriends View Post

    ... I have no desire to pick stocks. I plan to either do passive investing, or have someone else actively manage our money.

    ... I have been a couch potato investor for many years. I understand the theory of passive investing and it makes sense to me.
    ... I believe that there maybe stormy waters ahead in the global economy and... sometimes I start falling into the dangerous trap of thinking "this time its different" ...

    ...
    Hardly sounds like a good investor profile to invest in our over-inflated real estate markets.

    To OP: if it ain't broke, don't fix it. 150K or 15M, the couch potato works the same. Why gamble that some active manager might be able to squeeze more returns in exchange for their fees? You will be spending your retirement wondering if you are getting your money's worth from your adviser instead of enjoying your income.

Page 1 of 4 123 ... LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •