# What would you do with $15M?



## StayThirstyMyFriends (Jul 29, 2016)

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.


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## gibor365 (Apr 1, 2011)

> 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...


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## My Own Advisor (Sep 24, 2012)

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.


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## OnlyMyOpinion (Sep 1, 2013)

StayThirstyMyFriends said:


> 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.


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## Mukhang pera (Feb 26, 2016)

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.


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## gibor365 (Apr 1, 2011)

Mukhang pera said:


> 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


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## lightcycle (Mar 24, 2012)

Mukhang pera said:


> 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.


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## Mukhang pera (Feb 26, 2016)

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?


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## OhGreatGuru (May 24, 2009)

StayThirstyMyFriends said:


> ... 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.


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## dubmac (Jan 9, 2011)

Consider MAWER investments. MAW105 http://www.mawer.com/our-funds/fund-profiles/tax-effective-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.


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## Eder (Feb 16, 2011)

I would buy a blue water sailboat and go cruising till it's all gone.


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## humble_pie (Jun 7, 2009)

i think he should buy a small island & then secede from canada

it'd be a blast to have your own country

.


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## jerryhung (Mar 28, 2011)

Wow, I know we have had $1M, $2M threads, but $15M? CONGRATS

I would not be online anymore, go enjoy life 


But seriously, look into active/wealth management, Mawer is good


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## StayThirstyMyFriends (Jul 29, 2016)

Thanks for the replies!

Yes, I'm speaking K,M,B language so I did mean millions. Seems like a lot of money.

MOA / OGG
What I was thinking was, even though I understand and buy into the philosophy of passive investing... well, I don't have any experience with a "reputable wealth management firm". I expect that the management firm won't totally mess things up, its just a question of whether their management is worth it. I thought maybe I should try that angle out with a portion of the stake for the experience. Whatever I do, as long as it is conservative, I can always move the capital to another scheme as I learn more. I figure I have enough to do more than one scheme and then evaluate.

But the "if it aint broke dont fix it" feedback is good! Thanks!

gibor / dubmac / jerry
Thanks for the recommendations. I have not looked up MAWER although I've seen the name - I will definitely check them out.

Mukhang - yeah, I won't be investing in real-estate in Vancouver... I think that bubble is about to pop. I might buy a condo at a ski hill, anything further in real estate I was thinking a REIT. I don't want to be a landlord and trust property management firms as much as I trust mutual fund salesmen.

Eder - that is remarkably close to what I want to do (minus the "till its gone" part) 

jerry - for the record it isn't in my bank account yet. And , yeah, I've been reading a lot of websites that talk about "what to do if you win the lottery" and the general advice is : don't do anything sudden or drastic.

It may seem weird to be asking for advice on-line for this kind of situation... I should be talking to professionals or something. But, I figure I should listen to a wide range of sources before I make any decision. You can tell I'm the analysis-paralysis kind of personality. But this community seems like a good place to start when looking for resources!

Thanks again!


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## humble_pie (Jun 7, 2009)

has anybody noticed how regularly they turn up here?

brand-new posters, never seen before, but somehow they've recently managed to acquire $1-15M dollars.

even though they were smart enough to acquire the $1000K in the first place, somehow they get all naiive & tongue-tied when it comes to investing.

even though they would have had the best accountants in town to build that business - or granpappy who died & left that $1B would have had the best financial advisors in the free world - nevertheless once the funds fall into their allegedly innocent hands, somehow our novice newbie millionnaires turn into investment 12-year-olds.

help, they go, please help me? should i buy XIU? should i buy VTI? should i be doing a couch potato? help, could somebody please tell me what is a couch potato?

always, without exception, up step the cmf forum stalwarts with their *advice.* 

the stalwarts wouldn't step up for $50k, but oh my, how they love to step up with advice for what they believe is $1M.

always, we see how - once the flurry of excited posts dies down - the novice millionnaires vanish with their fortunes, never to be seen again.

the repetition has gotten to the point where i've become a total cynic. I think these sudden newbie millionnaires might be plants. I think they are fictions. I think they are fairy tales injected into the forum on a regular basis in order to perk up financial interest from readers who are drop-dead bored with the never-ending fights over nazis, arabs, moslems & refugees.


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## mordko (Jan 23, 2016)

Good point, this is all really very disturbing. 

There are few alternative explanations for this phenomenon other than the aliens who are using this complex, human-driven cmf platform for purposes of mind control. It is said that the alien mind control approach is actually a cover story intended to conceal something even more disturbing than aliens, that being an encroachment on the very souls of those chosen to be victims of government and military experiments that seek to control the workings of the human brain itself for purposes of psychological warfare and for intelligence operations requiring a “zombie” type agent who has no idea he is carrying out a covert mission at all.

The only other explanation would be that the posters are telling the truth and who would believe that???


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## humble_pie (Jun 7, 2009)

.

the previous suddenly-rich newcomer said he only had $1.5M

his superficial details - how he supposedly got his money - were different but the language signature was identical

please, please, please, please, please give me advice, he said
i'm just an innocent who wouldn't know a stock from a sandbox, he said with a 

the stalwarts feasted on that story for a few days

it gave the oh-so-obvious couch-potato-financial-planner-insurance-broker-mortgage-broker salesmen on here a grand opportunity to showcase their wares

as soon as the buzz wore off, $1.5 million dollars vanished
never to be seen or heard from again

alas, financial forums attract more than their fair share of chicanery



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## kcowan (Jul 1, 2010)

I have several friends have have north of $10 million. Mostly they are interested in nice homes and cottages, nice cars, and sometimes nice boats. Only one hangs around the internet because he manages his own portfolio. He is careful not to divulge the size of his stash. He has found resentment/disbelief when he does so.

All these people made their money by developing a business and selling it. We share some common interests but our budget prohibits us from participating fully.


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## janus10 (Nov 7, 2013)

If I suddenly found myself in the position to have many, many millions, I would NOT come here seeking input. What exactly suggests that people here are qualified to understand and offer professional advice taking into account all that would be appropriate for a sound financial plan?

I would be shutting off almost all online activity unless it was research.

Very odd behavior IMO.


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## Ag Driver (Dec 13, 2012)

I would pay off all debts. Spend 1.5 mill. Then put the remaining ~13 mill in a 60% fixed and 40% equity split in a couch potato and live off the interest. 

What is that? Half a mill salary each year at 4%? That'll do.


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## tygrus (Mar 13, 2012)

Doesn't matter if you have 1 dollar or 100 million dollars. You follow the couch potato or mustache guy. Yeah thats great advice.

If I had 15M none of it would go into the market. I would put it into HISA and GIC. Pretty sure I can live off $400k per year.

But then again, someone who built a 15M business would know what to do with the money and wouldn't be on here with their first post.


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## sridharcw (Jun 12, 2016)

Hi StayThirsty,

Congratulations on completing your 15M deal!
I can understand what it feels like and Im sure you must have worked hard and sacrificed a lot of things along the way to get to this stage. 
A windfall can be an easy thing to make people distracted and take wrong decisions but you have been quite responsible and Im sure you will be prudent in your decisions. 

Im assuming you dont have any loans or mortgages or debt. If you have some loans it may be a good idea to settle them off and use the remaining to invest. If its a low-interest mortgage you can retain it if the monthly payments are not burdensome. 

If you want to start investing with a simple, hands-off approach (sort of passive investing). I'm not a qualified advisor or professional but from personal experience I've seen that passive approach using ETFs (index, REITs, etc) as well other monthly income-generating companies listed on TSX are a great way to get started. The biggest challenge here is to be patient and not worry about making big numbers - rather focus on building it block-by-block. 
I dont want to brag about myself but just sharing my personal experience. I have had good success and failures in stock picking (outside Canada) and limited experience in Canada. So knowing my limits I stuck to index and income-investing approach which gave me peace of mind and regular income (like clock work). 
I started off with humble beginnings with limited savings to make $6 a month which could hardly buy a burger. In a matter of 8 months I've reached $60 a month level. 
Of course it was not a smooth ride and I had seen lot of volatility and losses and had to make adjustments for tax and convenience purposes. 

You can call the approach - Couch potato or passive of income investing or whatever, but at the end of the day like Kevin O Leary says an investment that does not pay dividends is just a Fantasy. This approach provides regular income plus the capital appreciation or stability although quite moderate. When you get dividends and channel it back and diversify your investment you are creating a growing compounding machine! You made $15M and achieved a lot. With passive investing you spend less time on the investing thing and instead pursue your interests in business, travel, family or other things where you will get better satisfaction or professional experience. 

My personal opinion is to avoid going to banks for investment advise or services. The reasons are obvious so I wont get in to that. If I were you I would have 2-3 or more discount brokerage accounts (for family members) and follow a disciplined and gradual investing strategy. 

Let me know if you have any question - I will try to answer as far as I know from my personal experience. 

If you can try visiting blogs like Freedom35, Young and Thrifty to get some ideas. I'm also working on crystallizing my ideas in to a blog, book or some kind of toolkit that can be of value to income-seeking investors. 

Good luck. 

Sridhar



StayThirstyMyFriends said:


> 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!
> 
> ...


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## tygrus (Mar 13, 2012)

This thread is fishy for another reason. Nobody would buy a 15M business that doesn't have an established revenue stream. So why would you sell a revenue stream to put it into another revenue stream you know nothing about. You know your business better than any alternative investment.


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## humble_pie (Jun 7, 2009)

kcowan said:


> I have several friends have have north of $10 million. Mostly they are interested in nice homes and cottages, nice cars, and sometimes nice boats. Only one hangs around the internet because he manages his own portfolio. He is careful not to divulge the size of his stash. He has found resentment/disbelief when he does so.
> 
> All these people made their money by developing a business and selling it. We share some common interests but our budget prohibits us from participating fully.



the above parties are not the parties i'm referring to!

as mentioned, the parties i'm focusing on have zero background in this forum. No history whatsoever. Typically, as with this OP, they announce in their very first post that they've recently acquired a humungous number of $$. 

then they ask for advice. Not the kind of advice they *should* be asking for, ie how to find lawyers & accountants to help them set up corporations or possible vacation property trusts in other countries, or how to plan for their estate heirs ...

no, they ask for simple ordinary couch potato advice, so the ETF salesmen on here can then rhyme off their recommendations about alphabet soup portfolios.

as soon as the interest dies down - maybe 2-3 weeks - mister nouveau riche promptly vanishes. Totally vanishes. Forever & ever.

another version of mister suddenly-rich is the virgin never-before-seen poster who discovers that daddykins or mummykins or granpappy is actully worth more than a million bucks, so now VNBS wants to know how to *help* their rich ancestor ...

as mentioned, these stereotypes are appearing regularly in cmf forum. Every few weeks.

one tentative hypothesis could be that it is the forum owners who are doing this - or at least sub-contracting all these brand-new but suddenly-rich new members - in order to bring the forum focus back to finance.


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## Pluto (Sep 12, 2013)

Over time I'd put all of it in quality dividend paying Canadian stocks. Just look at the largest holdings in cdn etf's for a guide. You have to have the right mind set for this however. You have to have confidence in what you are buying so you don't bail out during a hiccup, pot hole, or what have you. You mitigate risk by buying quality. Once you see the dividends rolling in you'll like it.


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## Mukhang pera (Feb 26, 2016)

HP, I think your intuition in this matter is correct. That is why, in my early reply to this thread, I made no attempt to give serious advice but suggested, instead, blowing the roll on an East Vancouver house that could be used to generate gross revenue of $1,500 per month.

Certainly it's an odd first post to come here and announce a "windfall" (as the OP described it) of $15 million. One is left to wonder how it can properly be characterized as a "windfall". Presumably, if the company in question was built up over time to have that kind of value, the OP should be somewhat familiar with financial matters and should not be taken by surprise by what the company is worth. The OP said "we" are selling, which suggests there might be other shareholders who are also about to receive millions and the company might well be worth a good deal more than $15 million.

It is also passing strange that the OP speaks of '"suddenly about to be a "high net worth individual"'. Did the company just experience a major gold ore strike? If the company has been built up to have significant value, I would expect it to be the case that the OP has been a "high net worth individual" long before now. The net worth was in the shareholdings. Now it will be cash. What has changed? 

There are probably few (if any) members here who have a net worth in the $15 million range. Seems like the wrong crowd to approach to seek advice about investing a sum well beyond the ken of almost all.

Finally, I'll observe the unusual tenor of this language of the OP: "We are selling our company, should close in a couple of months I should be sitting on over $15M!" If there is indeed a sale in the offing of such a valuable asset, there should be a lot more certainty about the matter than is captured in the words "should close in a couple of months". and "should be sitting on over $15M". By this late stage the lawyers should have the matter tied down to a certainty, there should be earnest money in trust and I would expect to see the post couched in language more along the lines of "closing _will_ be in a couple of months" and I _will_ be sitting on a fortune.

Ed. note to the OP: Should your post be what it purports to be, please forgive the skeptics here. Enjoy your millions. Perhaps go farming until the money is gone. Don't forget to show some beneficence to the less fortunate.


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## Mukhang pera (Feb 26, 2016)

My last post to this thread was intended to follow hard on the heels of HP's last post. While I was composing, several more posts have interceded, including some retort by the OP.

I have decided not to edit what I said, supra, but I'll say that portions of the retort lend some substance to the notion that the OP is not a troll. We'll see how this develops in the fullness of time. Cur. adv. vult.


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## tygrus (Mar 13, 2012)

OP what is your revenue stream? I am just asking because if you invest that amount according to the couch potato, its very conservative returns. In the order of 3-4%. Thats not a great return on 15M and then you have the market volatility with it which is going to be hard to stomach on that amount. 

If you are planning a 1.5% with draw, put the rest in something solid like GIC ladder. I wouldnt put 15M in the markets for a measly 3% return.


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## StayThirstyMyFriends (Jul 29, 2016)

Mukhang pera said:


> I have decided not to edit what I said, supra, but I'll say that portions of the retort lends some substance to the notion that the OP is not a troll. We'll see how this develop in the fullness of time. Cur. adv. vult.


Your suspicion is fully understandable. 

If this thread turns into only discussing whether I'm a troll, and picking apart my logic to prove that I'm a figment of imagination, though, I'll definitely turn to other sources


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## humble_pie (Jun 7, 2009)

Mukhang pera said:


> ... the OP is not a troll



of course he's not a troll. Did anybody, least of all myself, say he was a troll .each:

what i said is that - at first glance - which now requires updating - he was appearing to be another one in a long line of uber-rich newbie posters with zero histories but suddenly they show up here out of the blue with millions of $$

& i was asking How come we have all these suddenly rich newbies?


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## humble_pie (Jun 7, 2009)

StayThirstyMyFriends said:


> I'm surprised by the sudden reluctance I hvae to discuss it [the new funds] openly ...
> 
> Anyway, HP, I have a fair amount of respect for you having seen and agree with several of your posts in the time I've been hanging out here, and I understand your suspicion that I'm a troll. How would you recommend that I should have handled this?




since you did ask me How would i recommend handling your new wealth, here are a few thoughts ...

1) talk much less. At least your wife - sensible girl - was able to edit you down. At least you were able to change your username, out of concern that some would be able to recognize you (although having 2 usernames is already a bit of a manipulation.) 

2) sorry, i'm not falling for this stuff about you're-the-business-tech-guy-so-you-don't-know-finance. Why not ask the professionals working for your company for a few introductions. Then i'd sit down with these new professionals & i'd listen carefully. I do believe you will learn far more from them, even in one meeting or 2, than you will from e-mailing or phoning an unknown mutual fund company.

3) surely you can see that cmf forum is not a gathering of multi-millionnaires. Surely you can understand that there is bound to be some resentment that you - who say you are so financially fortunate in life - you are demanding so much exotic information geared to rich people from this forum, yet you are giving nothing back?

by contrast, i can think of at least 2 retired gentlemen on here who appear to be well-off. Yet what they do in this forum is labour mightily, in all of their posts, to serve & help others. They have generously done exactly this for many years. 

i can think of younger members who behave the same. All are net donors here, not net takers.

4) a massive opportunity is coming your way, one that will presumably affect your entire life. Will your job cease with the winding up of the company? what will your next avocation in life be? will you eventually be looking to start up a new business? 

5) perhaps even more importantly, how are you going to involve your wife in what could be a magnificent new chapter for both of you? i'm glad to hear about mrs stayThirsty & i'm certainly happy to hear that you have respect for her views, but i'd be even happier to hear that she'll be accompanying you to financial planning meetings.

6) i believe that, in your shoes, i might anticipate a time frame as long as a full year or even more, to work up a proper multi-year financial plan. It might even turn out that you will end up with an investment plan that you can manage & execute yourself. After all, looking after 20,000 TD bank shares is not really very much more work than looking after 2000 of them.

7) however, the sense i have is that you somewhat urgently wish to skip the planning stage & rush on to the actual asset management stage. Might i respectfully suggest that this rush should slow down a little bit. It takes a long time to create & set up a plan that, ideally, should function for the next 30 or 40 years or even longer.

8) in closing, may i mention once again to refrain from discussing your personal circumstances in this forum. Security cautions should prevail!



.


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## tygrus (Mar 13, 2012)

Dividends are definitely the way to avoid as much tax as possible, but they come with a catch....volatility. 

So if you stuck all the 15M in the markets and spun out 5% which is totally doable without too much risk, that would give you $500k income per yr after tax. Nice...

But can you sit still if you are down 1 million dollars in a few days because thats what a correction could look like.


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## tygrus (Mar 13, 2012)

Might I make a guess this is a tech company with quite a few users, some fledgling ad revenue and no real hard assets and some larger player wants to try and monetize it further, hence the ridiculous valuation.


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## OnlyMyOpinion (Sep 1, 2013)

I would suggest that someone in effect 'winning the lottery' and arriving at a large sum without the confidence/experience to know how to proceed should be looking for professional advise. And not jut an accountant who is suggesting various tax reduction vehicles - you want a holistic team with the expertise to provide accounting, legal, financial and estate planning services - not just one or the other. 
You need to determine with your family what your complete plan is - future priorities and goals - not just your investment strategy.
Without recommending any, look at the services of outfits like Mawer, or possibly your bank's wealth services group. As pointed out, don't rush into one, shop around, interview them, explore their depth of experience with 'lottery winners', find a fit with the personalities not just the services.


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## StayThirstyMyFriends (Jul 29, 2016)

Everyone, especially humble_pie, thanks for the advice. 

I now realize that this was not really an appropriate topic and I've approached it poorly. I doubt I can kill the whole thread but I've gone through and deleted some of my chatty extraneous posts. 

Although this is not the way it seems, I'm not rushing into anything. I am just trying to collect wisdom from a variety of sources to consider as things progress. 

I guess this will probably be it as far as this handle goes. I'll be another newbie that disappears with a single thread  I will try to make contributions through a different handle. It is not my conscious plan to be a taker, not a giver... but right now as far as advice goes, I need a lot and have little to give. I understand how that can be annoying! 

Thanks again!


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## humble_pie (Jun 7, 2009)

^^

gosh, no, stay with the present username, it's already your 2nd, no?

what would be the point in going to a 3rd?

no harm done & now the boat does seem to be moving with the current.

onlyMO is right in suggesting a holistic approach, but these summa advisors are very difficult to find. We certainly don't have one in the forum. It may take you a while to find the right person/the right team, so the first order of business would be to Make No Mistakes in the Meantime. ie don't rush into contractual arrangements with financial advisors prematurely, don't make long-term investments or other commitments lightheartedly, keep the funds liquid for the time being.

(i recall, now, who you used to be on here) (it's the language signature) (similar themes)


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## Mukhang pera (Feb 26, 2016)

StayThirstyMyFriends said:


> It is not my conscious plan to be a taker, not a giver... but right now as far as advice goes, I need a lot and have little to give. I understand how that can be annoying!


I don't think you have garnered a lot of annoyance here. Many members of this forum have been motivated to sign up and make initial posts because they have a question to pose, advice to seek, etc. Nothing wrong with that. As alluded to by HP, some come here making pleas for help, generate a gaggle of well-thought-out replies, and then disappear into the woodwork. Some don't bother to stick around to say thanks.

For my part, I am willing to accept that you are well-intentioned and will also make a worthwhile contribution when you have one to make.


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## TomB19 (Sep 24, 2015)

If I had $15M, I'd come here and post a question asking what I should do with it.


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## heyjude (May 16, 2009)

TomB19 said:


> If I had $15M, I'd come here and post a question asking what I should do with it.


+1
I don't know why some people feel the need to gang up on new members who don't seem to fit their mental models. This is not the most welcoming forum.


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## mordko (Jan 23, 2016)

@StayThirstyMyFriends - have you looked at Permanent Portfolio? It's a bit like CouchPotato but IMHO, may have some advantages for someone who is no longer earning/contributing to the portfolio, has a fairly long outlook and a focus on preventing losses.


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## Eder (Feb 16, 2011)

humble_pie said:


> always, without exception, up step the cmf forum stalwarts with their *advice.*
> 
> the stalwarts wouldn't step up for $50k, but oh my, how they love to step up with advice for what they believe is $1M.
> 
> ...


Well with just 50k I wouldn't advise anyone to buy a sailboat and would have nothing to contribute.


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## Eder (Feb 16, 2011)

tygrus said:


> This thread is fishy for another reason. Nobody would buy a 15M business that doesn't have an established revenue stream. So why would you sell a revenue stream to put it into another revenue stream you know nothing about. You know your business better than any alternative investment.


I sold my revenue stream due to risk...big risk big rewards (and ulcers)


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## mordko (Jan 23, 2016)

heyjude said:


> +1
> I don't know why some people feel the need to gang up on new members who don't seem to fit their mental models. This is not the most welcoming forum.


This happens when there is nothing else to be proud of other than having spent a lot of time in this chatroom.


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## StayThirstyMyFriends (Jul 29, 2016)

mordko said:


> @StayThirstyMyFriends - have you looked at Permanent Portfolio? It's a bit like CouchPotato but IMHO, may have some advantages for someone who is no longer earning/contributing to the portfolio, has a fairly long outlook and a focus on preventing losses.


The emphasis on gold is kind of bizarre, though, don't you think?


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## mordko (Jan 23, 2016)

StayThirstyMyFriends said:


> The emphasis on gold is kind of bizarre, though, don't you think?


It's not "emphasis" but one of the assets. Keeps one in the game when all the other classes go upside down. Right now it's easy to see a scenario with both shares and bonds crashing hard, say if Chenese debt were to pop. Where will people pore the cash then?


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## humble_pie (Jun 7, 2009)

heyjude said:


> I don't know why some people feel the need to gang up on new members who don't seem to fit their mental models. This is not the most welcoming forum.




heyjude it's so unlike you to strike below the belt, whatever are you thinking of .each:

me i have a record of welcoming & helping hundreds, perhaps thousands, of new investors. I have a pmm mailbox stuffed with their thanks. Other thanks are spelled out across the forum, even in this thread, as you can witness.

as a matter of fact, cmf forum does happen to be known as an especially welcoming forum for young & new investors. Although they may be dropping off of late, due to the irate posts from the small number of angry & frustrated aging males who have dogged the forum since 2014.

in this case, the OP says he has been posting under another username. It's easy to see his history under that other username. Evidently the OP grew used to posting & exchanging in the forum, but for some reason he failed to understand that if he suddenly were to appear with a brand-new username plus 15 million dollars but zero history, of course a few red flags would be raised to the new username.

with respect to the OP's windfall situation, very high net worth individuals - defined as $10M & above - do not & should not look in casual anonymous internet chat forums for basic advice. By definition, their investment, tax & estate planning issues are going to be very special. 

as onlyMO has suggested, they need to start with holistic investment counsel. They should start with chartered accountants & lawyers who are bound by professional ethics & who are experienced in dealing with the placement of large windfall profits.

i would also include professional investment counsel firms. These are the discretionary financial managers who handle high net worth clients & who are bound by professional ethical restrictions. With these, i tend to favour smaller boutique firms over the larger & more bureaucratic private wealth management divisions of the chartered banks. It's my belief that the smaller boutique firms offer a more personalized service.

in recent years, the financial industry has renamed investment counsel as "portfolio managers." Some individuals at full-service brokerages have also earned the title of portfolio manager (it's a good idea to check out the status of an advisor's qualifications on the IIROC website) (a few stockbrokers have been known to casually claim the status of portfolio manager although they have not taken the exams)

a windfall beneficiary does not need to end up hiring any of these professionals, at least not initially. But imho such beneficiary owes it to his future & to his family's future to meet with such professionals at least once, in order to hear what they have to say.

there are a few UHNW parties in the forum - a pest like mordko would not know how to recognize them - but they do not come here for basic startup advice. Rather, they come here to deal with highly specific, sometimes exotic, always fascinating, topics. As i've mentioned upthread, they give & they also receive. It's wonderful to hear from them.


.


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## mordko (Jan 23, 2016)

Touché. So glad that with this catch 2016 turned out to be another successful year for hp.


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## mordko (Jan 23, 2016)

Peculiar how hp keeps posting and then deleting her comments. Maybe she is a Chinese spy sent here to present cmf oldies as being a bit dim.


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## humble_pie (Jun 7, 2009)

StayThirstyMyFriends said:


> The emphasis on gold is kind of bizarre, though, don't you think?




no high net worth advisor worth his canadian salt would suggest that a $15M windfall should be largely injected into any kind of US-based mutual fund. Certainly not the Performance family of funds, whose performance has been mediocre at best & whose previous leader was evidently sanctioned by the US securities commission.

to damn Performance with faint praise in wikipedia:

_"However, from its 1982 inception through 2010, the fund had average annual gains of 6.5% in comparison to the S&P 500 stock index's 10.6% average annual gain over the same period ... According to a 2006 article in Kiplinger's personal finance magazine the fund has delivered on its goal of "long term stability with occasional market beating returns."_


one should check out a since-inception chart for this fund. Its symbol is PRPFX. Unusually high prices in earlier years of this decade appear to be due to the heavy weighting in bonds, gold & swiss francs. Of these 3 correlations, two could be said to have low or no prospects going forward. Bonds close to zero interest rates do not currently appeal. The CHF advantage has ended with the pegging of CHF to EUR & the imposition of negative interest rates by the swiss central bank.

unusually high special dividend payouts from this fund in 2013 & 2014 - presumably triggered by the gains in bonds, gold & CHF - are offset by low penny dividends in all other prior years.

here's an author who says Performance is not attractive as a long-term investment vehicle. Given the punitive US taxation & estate tax complications for canadians, it's difficult to comprehend why a fund like this should even be mentioned.

_" Given today’s environment, characterized by historically low interest rates, the PP, with its interest rate exposure, will not be an attractive portfolio in the coming years, and it is ill suited for retirement-oriented investors who require the ability to keep pace with inflation. Advisors should recognize PP’s benefits, but they should also approach any such portfolio with caution in the current environment. "
_

http://www.advisorperspectives.com/...tors-should-fear-in-the-permanent-portfolio/4



.


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## amitdi (May 31, 2012)

humble_pie said:


> as a matter of fact, cmf forum does happen to be known as an especially welcoming forum for young & new investors. Although they may be dropping off of late, due to the irate posts from the small number of angry & frustrated aging males who have dogged the forum since 2014.


i have asked stupid queries, dumb queries and people here (including HP) have been very kind to reply. CMF is a very welcoming forum.

I have skimmed this thread, and I too dont buy into the theory that a person with successful business and experience with Couch investing is seeking advice on CMF. I buy the theory that its to create interest and keep the forum going.


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## james4beach (Nov 15, 2012)

StayThirstyMyFriends said:


> The emphasis on gold is kind of bizarre, though, don't you think?


Following up on the permanent portfolio raised upthread, there's another thread on that with some discussion and long-term numbers
http://canadianmoneyforum.com/showthread.php/86673-Permanent-portfolio-and-asset-allocation

Personally I think that the 'couch potato' and 'permanent portfolio' are the most promising long-term approaches.


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## houska (Feb 6, 2010)

Irrespective whether this is "real" or a pipedream, my brief advice would be the same.

1. Split the pile into 3 chunks. a) a portion you set aside to support your financial independence, approximately 25X a generous but reasonable annual spending baseline. Say that would be $180k pre tax, so 4.5MM or 1/3 of the pile, but depends on the annual figure you choose. b) half the rest to spend, thoughtfully and judiciously, in the next couple of years on upgrading your lifestyle - a great residence, 2nd home in the sun, hobbies you'd like, etc. c) the other half of the rest with which you try to make a difference in society. With a couple of mil you can do more than just write a cheque, you can catalyze a difference if you do it thoughtfully.

2. If what you say about your mentality and approach is true, you don't actually need professional advice. Couch potatio and/or permanent portfolio sound good. I would complement with reading some of the books by William Bernstein about investing with a capital preservation emphasis - a useful counterpoint.

Whether or not this precise story is true, simplified, or wishful thinking, I have known a couple of people who have sold businesses they founded for several million dollars, in one case over 10. The couple I've known that did something like this have stayed sane and sensible.

Good luck!


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## james4beach (Nov 15, 2012)

When you have this much capital it becomes easy. Just mirror Buffett's plans for what he's leaving his wife. In Canadian terms it's simply this:

90% XIC, 10% VSB
That's it!

On 15M, this spins off 400K of gross income *without eating into capital*. If this is in fully taxable accounts, in Ontario your after tax income would still be $300,000 a year. Being rich is easy.


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## mordko (Jan 23, 2016)

This canadiazation of Buffets plan adds a heck of a lot of risk. Canada is a comparatively small economy and XIC is heavily dependent on 2 correlated industries.


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## james4beach (Nov 15, 2012)

I'm not sure XIC is any riskier than the S&P 500; they drop in lock-step during bear markets. And there is a significant, tangible tax advantage to the TSX index.

I agree though that portfolios benefit from international diversification. Portfolios benefit even more from asset diversification, like bonds and gold.


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## mordko (Jan 23, 2016)

Over the last 5 years XIC hasn't changed all that much. S&P more than doubled, if you convert to CAD. Sure, TSX tracks US in some years but far from always. It's basically resources plus financials which depend on resources.


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## humble_pie (Jun 7, 2009)

.

the size of this portfolio puts it in a class of its own. Posts treating these funds as if $15M were $1M that should be run regular couch potato style are not quite on the money, imho.

in reality, an investor with $15M has unique challenges & tax restrictions which few persons in this forum ever face.

the OP, stayThirsty, has stated that he will have at least one corporation plus possibly an inter vivos trust or trusts.

he says he is concerned by standard index fund or ETF management fees & one can easily understand why. A 1% fee could cost stayThirsty $150,000 per annum, an amount that could hire his very own recent CFA to manage his portfolio full-time.

even halved, a .50% fee could cost $75,000, an amount that could hire his very own recent CA to manage his portfolio full-time ...

although stayThirsty appears to be gone now from this thread, one can see him working intelligently on portfolio planning in early posts. He wonders whether he could manage the easier portions of his portfolio, such as GIC ladders, himself. With even greater detail, he asks whether he could not also manage core stock sectors himself, since these will likely consist of stable holdings of blue chip stocks.

i think an appropriate response might go something like Yes & Yes, but Perhaps Not Quite Just Yet.

i think stayThirsty should sit down with ultra-high-net-worth advisors & listen to their ideas & proposals. As i've mentioned, i think he should end up choosing the team that will work best with himself. I haven't mentioned, but i think he should resign himself at first to paying their high fees. After all, such fees will be tax deductible.

i think stayThirsty should select a team that will be comfortable gradually working its way towards a partial exit door, if he chooses to move more into hands-on financial management in the end.

i've looked at stayThirsty's earlier messages on cmf forum, now that he's confessed that he used to post here under a different username. He appears to be an entrepreneurial soul & i for one believe he would be an excellent candidate to ultimately manage half or three-quarters of his windfall portfolio himself. He might engage specialized investment counsel to manage small cap or emerging microcap investment opportunities, but in the end i think stayThirsty would do fine with the KISS core portfolio, huge though that might be.

a key aspect will be US stock selection, but here the above-mentioned planning stage & the qualified advisor will matter most, as it will be helpful to hold US securities in the corporation or in the private trust or in both. For reasons such as avoiding US estate taxation, for example.

all this is by way of saying that discussing regular ETFs such as XIC or regular funds such as mawer or performance is something of a waste of time when it comes to mammoth portfolios. Like all large creatures, these require enclosure in their own special protected national parks.

.


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## james4beach (Nov 15, 2012)

mordko said:


> Over the last 5 years XIC hasn't changed all that much. S&P more than doubled, if you convert to CAD. Sure, TSX tracks US in some years but far from always. It's basically resources plus financials which depend on resources.


But that's just a question of time frame. Look at 2000 up to now (ignore dividends and let's say dividend yield is similar for both). USD/CAD was about the same at the start and end of this period.
http://stockcharts.com/h-sc/ui?s=$TSX&p=D&st=2000-01-01&en=(today)&id=p00867610295

The return this millennium has been similar -- and TSX's is higher.


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## james4beach (Nov 15, 2012)

humble_pie said:


> all this is by way of saying that discussing regular ETFs such as XIC or regular funds such as mawer or performance is something of a waste of time when it comes to mammoth portfolios. Like all large creatures, these require enclosure in their own special protected national parks.


But are the ETFs really such a bad idea as a first cut? Take ZCN for instance with its 0.06% MER (or $9,000 a year). You get 420k all in eligible dividends.

Even with naive T1 taxes, the average tax rate is 31% and of that 420k gross distribution you get to keep 291k. Is that really so bad?

*How much better would a team of people* (the CFA, the broker, the stock expert) do by managing a portfolio themselves? How much lower can they push that average tax rate through complicated corporate structures? How much pay will that CFA & broker & lawyer etc want ... I guarantee you they will want more than $9,000 a year.

And the investor herself ... if she is the kind of person who can amass $15 million in wealth, surely their time is better spent on other pursuits.


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## mordko (Jan 23, 2016)

ETF fees for XIC or VTI are not 1% or 0.5% but 0.05%. Indexing is definitely an option for someone with 15 mil.


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## StayThirstyMyFriends (Jul 29, 2016)

james, mordko, houska (and others) for the record I am still listening and I appreciate the ideas. However, since I kind of regret this thread and hope it will die, this will be my last response  [BTW, I don't exist, and 9/11 was an INSIDE JOB.] Thx.

[Edit: I'm going to stay as a CMF member though and hope to contribute and initiate new threads, I'm not gone for good, just gone from this thread]


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## StayThirstyMyFriends (Jul 29, 2016)

StayThirstyMyFriends said:


> james, mordko, houska (and others) for the record I am still listening and I appreciate the ideas. However, since I kind of regret this thread and hope it will die, this will be my last response  [BTW, I don't exist, and 9/11 was an INSIDE JOB.] Thx.


Ok, one more response. HP, didn't see your post - thanks for the summary, that is pretty much on the target of what I plan. I plan to take things very slow and build my plan and team over considerable time (1-2 yrs). I'm reading a lot (4 Pillars, Random Walk Down Wallstreet and more on the shelf), I need to have those conversations with advisors (which have not happened yet). So really, at this point I'm just making a plan to make a plan. 

I am sure I will have more topics to discuss with CMF-ers in different threads, but will avoid the details of my situation in those discussions so we can avoid the awkwardness of this one. I definitely have some theoretical questions about what I've read in 4 Pillars of Investment that I can start a new thread on...


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## humble_pie (Jun 7, 2009)

mordko said:


> ETF fees for XIC or VTI are not 1% or 0.5% but 0.05%. Indexing is definitely an option for someone with 15 mil.



no, simple indexing would never be a startup option for a party with 15 million dollars.

the reasons have nothing to do with low or high MERs. The reasons have to do with complex needs - US estate taxation, foreign taxation, foreign real estate holdings, estate planning, income splitting, supporting offspring at foreign universities - such a party will benefit from specialized ultra-high-net-worth advisors.

these advisors do exist. We don't hear about them in this forum because, as mukhang pera says, no one on here has 15M.

.


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## humble_pie (Jun 7, 2009)

StayThirstyMyFriends said:


> Ok, one more response. HP, didn't see your post - thanks for the summary, that is pretty much on the target of what I plan. I plan to take things very slow and build my plan and team over considerable time (1-2 yrs). I'm reading a lot (4 Pillars, Random Walk Down Wallstreet and more on the shelf), I need to have those conversations with advisors (which have not happened yet). So really, at this point I'm just making a plan to make a plan.



great! the rhythmn of the plan to build the plan is perfect. It takes time but i had the feeling you will find it challenging & stimulating & fun.

in the meantime you could stash the funds somewhere safe

.


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## humble_pie (Jun 7, 2009)

james4beach said:


> But are the ETFs really such a bad idea as a first cut?



ETFs are a terrible idea for the super-rich. Among the reasons is the heretical-but-correct fact that the funds do not hold the securities which - in canada - they are allowed to claim they are holding.

james4, at one point in the past you were on board with haroldCrump & myself on this issue. That funds & ETFs are lending out their holdings - in some cases up to a third of their holdings - to brokers in return for fees reported to be in the neighbourhood of 2%, marked to market value. Which is how the ETFs are able to lower their MERs to such unrealistic levels.

in other cases ETFs are holding proxies & derivatives in lieu of actual real stocks via representational sampling techniques. All this is spelled out in their prospectuses.

in the US, the SEC requires minimal disclosure of loaned funds. However the required information is buried so deep & so obscurely, hundreds of pages back in footnotes to audited financial statements, that no investors can ever find it.

in canada, there are not yet any regulations at all which require this information to be made available to the investing public.

in canada, only advisors are told. As one Black Rock canadian manager explained to me a year ago, "Individual investors cannot be given this [securities lending] information because they won't be able to understand it."

as i say, this is a story whose time has not yet come. You might remember haroldCrump's posts a year ago on this very issue. Harold posted that it will take the failure of a major global money center bank to expose the tiers of derivatives held by such bank's many divisions, including its wealth management fund product divisions & its wholly-owned brokers who are holding the funds' borrowed stocks.


each: ... block your eyes & ears james4. You don't want to hear any of this.





> And the investor herself ... if she is the kind of person who can amass $15 million in wealth, surely their time is better spent on other pursuits.


on the contrary, this is an investor who will likely be able to turn $15M into $50M & more ... donating to charities along the way ... what's not to like


.


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## james4beach (Nov 15, 2012)

OK... I see what you're getting at. Just those US estate taxes are a menace (StayThirstyMyFriends may want to minimize or even entirely avoid US investment actually, and definitely avoid becoming a US person).

StayThirstyMyFriends - you may want to read this guidance from Switzerland's Wegelin bank, some years ago. It rambles a bit, but has some very important messages.
http://www.greatponzi.com/shared/Wegelin-Document-on-American-Taxes-and-Assets.pdf

And yes I agree that securities lending is a huge problem. The ETF providers disclose it in their documents; you can see how much of the assets are out on loan. This has at least been telling me to what degree securities lending is happening. I have seen these tables in both the BMO and iShares annual financial statements -- there is disclosure. (Nobody reads it, but it's there).

What are you going to do, anyway? Hold the stocks individually at your brokerages? The broker lends those shares out too. Use any margin at all, and the shares start zipping around. It's true that ETFs and mutual funds do this horrible securities lending thing, but so do the brokerages.

I share all of these same concerns about derivatives and securities lending in ETFs. But as MF Global and the rehypothecation scandal(s) showed us, it's tough to escape this kind of trickery. These middlemen are all crooked -- whether they're brokers, ETF providers, or whatever. They use the same sleight of hand with pension fund assets and institutional clients, as with retail clients.


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## james4beach (Nov 15, 2012)

And unless there's some seriously deceptive financial statements (for which Pricewaterhouse Coopers will be sued & dissolved), I don't see anything too wrong with XIC.

To show you something tangible, you can look at XIC's financial statement here
https://www.blackrock.com/ca/individual/en/literature/annual-report/annual-report-equity-en-ca.pdf

On page 271, you'll find a table of asset exposures by Level 1/2/3 which gives you a summary of derivative exposures. XIC is entirely level 1, common stocks. There are also no derivatives shown in the detailed listing of fund assets on page 12

On page 283, you'll find securities lending details. XIC has loaned out $121 million of securities vs $1,997 million net assets, or just 6% of securities out on loan. Yeah I don't like it either, but there's the amount -- 6%. This is on the low end of securities lending in US & Canada.


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## humble_pie (Jun 7, 2009)

james4beach said:


> OK... I see what you're getting at. Just those US estate taxes are a menace (StayThirstyMyFriends may want to minimize or even entirely avoid US investment actually, and definitely avoid becoming a US person)



this is an example of why stayThirsty needs a specialized ultra-high-net-worth advisor, not just any bloke from cmf forum. US assets can be held inside corporate or trust structures & they will be protected from most or all of these ill effects.

suggesting he avoid US investments is not quite appropriate ... each:





> And yes I agree that securities lending is a huge problem. The ETF providers disclose it in their documents; you can see how much of the assets are out on loan ... I have seen these tables in both the BMO and iShares annual financial statements -- there is disclosure.



i believe at the time of the original discussion it was determined that only iShares USA reports securities lending but canada does not so report. It is the iShares USA reportage that is so obscure & so heaviy asterisked onto succeeding pages that no investor can understand it.

in canada, a year ago, iShares was reporting nothing. In canada, a year ago, the iShares manager was emphatic that lending information can never be disclosed to rank-&-file investors because they would be incapable of processing the information correctly.

i'm left wondering where you are finding these tables for canadian ETFs? i for one haven't seen any ...





> What are you going to do, anyway? Hold the stocks individually at your brokerages? The broker lends those shares out too. Use any margin at all, and the shares start zipping around. It's true that ETFs and mutual funds do this horrible securities lending thing, but so do the brokerages



a safer broker procedure would be to hold securities at a broker in cash account, with no margin impairment. 

please bear in mind also that, in a margin account with options, the broker cannot borrow any stock against which a short option position has already been pledged to an exchange. 

(1) please also bear in mind that most ETF families are run out of the US. The regulatory authority is the SEC, which will not recognize canadians or the rights of canadian investors in any difficult situation. But at the same time, keep in mind that the IIROC and/or the applicable provincial securities authorities will not be able to help the same canadian investors when it comes to a failed foreign investment.

i for one feel more secure with individual stocks held at a broker i've known most of my life, reporting to a securities authority in my own province, under the regulation of a canadian IIROC in a next-door province, than i do with an anonyous ETF fund which has loaned out unknown selections from among its alleged holdings but refuses to tell me about it. Which, moreover, is also *holding* clusters of certain stocks only as derivative proxies via representational trading techniques, while being allowed to claim that it is holding the actual stocks themselves.

it's a question of degree of distance. Control & transparency of an ETF are, respectively, far too remote & far too clouded for my comfort.

(2) there is also the question of the CIPF. In a fund failure - perhaps related to its principal broker failure or its bank failure - would any CIPF coverage apply? i don't believe there are any precedents. I don't believe anybody has any reliable answer, although the fund industry's salesmen could be expected to have a soothing don't-worry-be-happy theme.

(3) returning to the notion of a $15M portfolio, this in itself is the size of a small startup ETF. There is no reason, imho, for such a portfolio to become a dependent of the ETF/mutual fund industry.

for a large portfolio, yet another disastrous result of becoming such an ETF dependent is the loss of the ability to self-govern most taxation consequences. 

.


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## james4beach (Nov 15, 2012)

humble_pie, I started a new thread with some securities lending amounts that I uncovered from iShares ETFs. See
http://canadianmoneyforum.com/showthread.php/98145-Securities-lending-amounts-in-ETFs

I also link to the annual reports. See Note 10, that's where the data is. Page 283 in the equities PDF files.


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## mordko (Jan 23, 2016)

> ETFs are a terrible idea for the super-rich.


This is a red herring. 

Firstly, if ETFs are engaged in irresponsible lending then they would be a terrible idea for anyone, unless we are saying that poor can afford the losses more than the rich. 

Secondly, there is a huge number of ETF and index fund products out there. Trabant sucks but it does not mean that all cars do. Everyone has to do his homework. As an example, funds run by Vanguard lend very little and take cash as collateral. In general ETFs used in Couch Potato scenarios fit this mold. 

Thirdly, I personally have a generic issue with investing in bonds right now (be that via ETFs or not). That has nothing to do with the ETF examples discussed above (XIC or VTI). 

There are basically 3 options out there:

1. Index funds/couch potato/permanent portfolio, etc.... ETFs are a great tool but not the only tool for executing this strategy. ETFs are known to be extensively used by superrich, people with >>$100M. This strategy will be more tax efficient than active trading. There are certain things one can do to reduce/postpone the tax burden further, e.g. by constantly harvesting capital losses and using similar ETFs. 

2. Active investing into stocks and bonds. This will be less tax efficient than 1. Can be done and you can beat the index if you are a new Buffet or find a new Buffett to do it for you. $15M is too small a fund to get someone else who is worth the cost of doing this. 

3. Investment in private companies/new ventures. This is an interesting option which can certainly beat the index, give one satisfaction and $15M would allow for this to be done but it's not a "hands off" approach. This is basically another job. 

All of these options should involve consulting with an accountant who is experienced in cross-border investments.


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## ValMiks10 (Aug 25, 2016)

Wow…. That’s some serious money mate. I would say bonds would be great idea with potential of gaining nearly 1-2% returns per month which is scary with the upfront money of 15M! You should not be required to worry about anything at all with that mate…. Your life is already set and so is your family’s.


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## mordko (Jan 23, 2016)

ValMiks10 said:


> Wow…. That’s some serious money mate. I would say bonds would be great idea with potential of gaining nearly 1-2% returns per month....


You cannot be serious.


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## amitdi (May 31, 2012)

ValMiks10 said:


> .... bonds would be great idea with potential of gaining nearly *1-2% returns per month *......


retailers and investment houses would kill for those returns, not even the Iron Bank of Bravos gives that kind of returns with their bonds...let alone stocks....


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## Riverdale DIY (Mar 20, 2017)

jerryhung said:


> Wow, I know we have had $1M, $2M threads, but $15M? CONGRATS
> 
> I would not be online anymore, go enjoy life
> 
> ...


Can you please point me to these $1M and $2M threads if they've been particularly vibrant discussions? I haven't found much via searching. Thank you.


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## marina628 (Dec 14, 2010)

We sold our business in stages 3-4 years ago for nowhere near your money but it was 7 figures.We have done the same with the large amounts as we did with lower amounts , still slowly moving cash into non registered accounts and buying dividend paying stocks .FYI the bulk is at TD Direct Investing but recently opened an account with CIBC.


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## Eclectic12 (Oct 20, 2010)

janus10 said:


> If I suddenly found myself in the position to have many, many millions, I would NOT come here seeking input. What exactly suggests that people here are qualified to understand and offer professional advice taking into account all that would be appropriate for a sound financial plan?


It seemed clear the OP was looking for ideas ... and was planning on taking it slow. The ideas might not be scale able but would at least give independent confirmation, should a pro give similar input. Sort of like being able to be confident of the cost base numbers when one's independent calculations and the broker's numbers agree.




janus10 said:


> ... I would be shutting off almost all online activity unless it was research.
> Very odd behavior IMO.


The flip side of the coin is the Quebec gas station owner who handed off to his "pro" broker. The broker churned though the $2 million from the business sale in trading fees in a couple of years, despite the family's protests of how the stocks selected didn't match was he asked for. 


Cheers


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## Eclectic12 (Oct 20, 2010)

tygrus said:


> This thread is fishy for another reason. Nobody would buy a 15M business that doesn't have an established revenue stream. So why would you sell a revenue stream to put it into another revenue stream you know nothing about. You know your business better than any alternative investment.


And if no one in the family wants to keep running the business where the owner also wants to step down ... what then?

Some want to work until they drop and other's don't.




tygrus said:


> Dividends are definitely the way to avoid as much tax as possible, but they come with a catch....volatility ...


??? ... with $15 million, likely one is going to be above $85K to $91K of income. 

Ontario, Quebec and Nova Scotia, to name a few tax jurisdictions, at these income levels are taxing eligible dividends more than capital gains. Top end spreads are around 13% more tax on dividends.


Cheers


Cheers


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## My Own Advisor (Sep 24, 2012)

$15 M is a crazy amount of money, if still true.

I stand by a simple 50/50 bond/equity split. That should yield about 3% or so. That's $450,000 per year every year for life....and your kid's and your kid's kids....

Otherwise, MAW105 http://www.mawer.com/our-funds/fund-...balanced-fund/
...is great as well.

Just keep your investing fees very low and don't trade!

Geez....$15 M. Wild. Some big fun parties in your future with $450k per year.


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## humble_pie (Jun 7, 2009)

.

why would anyone go on about this old thread today, months after the fact, though.

the OP was for real. Had a partnership where he was the sole rainmaker, the others weren't pulling their weight & everybody knew it.

he sought advice on how to wind up the partnership without causing ill feelings under another name in this forum. Then returned in this thread with the $15M after the partners decided to liquidate. But at $15M, he was totally out of our league. As mukhang pera said, when has a cmffer ever had 15 million dollars?

our friend is gone now, gone to that fabulous playland of the truly hyper-rich. Leaving us to slog on in the mud about our wretched little dividends & our miserable XIRRs .each:


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## OnlyMyOpinion (Sep 1, 2013)

humble_pie said:


> .why would anyone go on about this old thread today, months after the fact, though...


They shoot first, read later? :cower:


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## humble_pie (Jun 7, 2009)

^^

in reality, he was a nice man & a smart man to boot, imho he deserved his blessings

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## CalgaryPotato (Mar 7, 2015)

That is lottery money, that is the kind of money that can change a families fortunes forever, or destroy a family just as easily. It sounds like your plan is to live on a very moderate amount of money forever (relatively speaking of course). So the question even more so than what type of investments do you want to keep it in, is how do you raise your family in a way to respect this money, and use this money to grow themselves, and grow their wealth like you are doing rather than just blowing it.


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## humble_pie (Jun 7, 2009)

CalgaryPotato said:


> That is lottery money, that is the kind of money that can change a families fortunes forever, or destroy a family just as easily. It sounds like your plan is to live on a very moderate amount of money forever (relatively speaking of course). So the question even more so than what type of investments do you want to keep it in, is how do you raise your family in a way to respect this money, and use this money to grow themselves, and grow their wealth like you are doing rather than just blowing it.




? maybe you in the wrong thread?

the OP here worked hard all his life, succeeded in business, dissolved his partnership amicably & ended up with 15 million $$. Nothing to do with lottery, blowing money or destruction of families.

perhaps it's true that some do what onlyMO says above. Shoot first, read later ... each:


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