Got a windfall: where to invest?

New / Eng Jeeeeez
Jul 13, 2018 27 Comments

Managed to sell a small portion of my startup equity and have made 1M cash, which will be taxed at long term capital gain. Where should I put the after tax money to diversify?

My current net worth not considering this sale is 800k split in vanguard funds and bonds 80/20. I also have a 3% stake in crypto that I am not looking to increase. Happy renter, I am super minimalist and hate owning shit.

I would like to diversify, maybe in real estate, but I don’t have the mental bandwidth to go around and chase deals, especially in the Bay Area. I also don’t like crowdfunding websites, the offers I see there seem to be the bottom of the barrel, they are super risky (e.g. interest only mortgages with mega balloon payments in 3 years. Insane).

Thanks blind.

TC: 280 cash and about 2M illiquid startup equity. 8 yoe. Early startup employee.

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TOP 27 Comments
  • Facebook XLhI02
    You've got a good Vanguard setup and are on bogleheads, why not just do the obvious thing and pump more into that?

    If you want to get more into alternatives and really want in on real estate, just go with a REIT. But you're financially competent— I'm going to bet that you know the best risk/reward is to just throw more at Vanguard.
    Jul 13, 2018 5
    • New / Eng Jeeeeez
      OP
      Thanks. Yeah I’m worried that REIT are just super correlated to the stock market, so I might as well just simplify.
      Jul 13, 2018
    • Facebook XLhI02
      I don't know your age, but 20% bonds is fairly conservative, right? I'd say you're fairly insured against the stock market already, maybe even to the point of missing out on gains?
      Jul 13, 2018
    • Facebook XLhI02
      BTW, if you haven't tried it, check out Personal Capitol. They have an allocation checkup that shows you how efficient your actual allocation would have been compared to a theoretical target, historically. You should be able to rig it to also compare a potential alternative allocation.
      Jul 13, 2018
    • New / Eng Jeeeeez
      OP
      I’m 32. Remember that in 2008 while the market crashed bonds were up 5%+. For me diversification is the key. Appreciate your perspective!
      Jul 13, 2018
    • Facebook XLhI02
      I'm 30, got pretty fucked by 2008 since I was freelancing at the time. Literally ran out of money, but I was an idiot back then who didn't know how to do anything. I mean, who isn't at that age :p

      I've since rebuilt to about $600K. I think my risk appetite is still a little bigger though, I'm fairly in on stocks. Or well actually, I just am dumping it all on Vanguard 2055 and calling it good.

      Will be interesting to see whose strategies pan out better over the next decade or three! Best of luck :)
      Jul 13, 2018
  • NAVEX Global HollaBackG
    Hire a professional financial advisor.
    Jul 13, 2018 2
    • New / Eng Jeeeeez
      OP
      Haha spent too much time on bogleheads. Never gonna do that. In the worst case I’ll reinvest it all in VTI + VXUS. Definitely not gonna listen to any scumbag.
      Jul 13, 2018
    • Google Ducksworth
      Financial advisors mostly charge a lot of money to provide nothing beyond placebo effect. They don’t beat the market with any consistency. If you are totally new to investing and don’t want to learn hiring one can make sense, but that’s the only time.
      Jul 13, 2018
  • CareerBuilder JonDoe1
    Stay away from real estate if you don't have it in you to be an active investor: you'll get fleeced. Vast majority of turnkey "opportunities" are scams. Stick with your Vanguard portfolio and add a stake in REITs or precious metals if you want to diversify.
    Jul 13, 2018 5
    • Proofpoint / Other foodtruckj
      The only problem with precious metals is the physical security of them. Still a good idea for diversification.
      Jul 13, 2018
    • Google Ducksworth
      Doing turnkey certainly requires some due diligence and it isn’t totally passive, but it isn’t nearly as bad as you’re making it out to be imo.
      Jul 13, 2018
    • CareerBuilder JonDoe1
      It isn't a scam in that it isn't totally passive, it's a scam in that the returns are very low compared to the risk involved.
      Jul 14, 2018
    • Google Ducksworth
      What return and what risks are you using to calculate that?
      Jul 14, 2018
    • CareerBuilder JonDoe1
      for example, a 20% return wouldn't be sufficient for marginal properties
      Jul 14, 2018
  • Visa shaolin
    Get to preipo market get Stripe whenever it ipos it will double in a day
    Jul 13, 2018 3
    • New / Eng Jeeeeez
      OP
      How would you go about for doing that?
      Jul 13, 2018
    • Visa shaolin
      Equityzen
      Jul 13, 2018
    • Autodesk Adsk84
      Equityzen is only for accredited any suggestions for non accredited?
      Jul 13, 2018
  • Google Ducksworth
    Congrats! The easiest thing to do is to do turnkey or nearly turnkey rentals out of state. There are also non-shitty real estate crowdfunding sites available for accredited investors. I’ve done both and it’s been good for me.
    Jul 13, 2018 2
    • New / Eng Jeeeeez
      OP
      Which websites would you recommend? I have looked into turnkey but I don’t like it, I don’t have the capacity to deal with a tenant who will sue me or put the house on fire, even with a property manager. Would prefer to be a limited partner in a holding.
      Jul 13, 2018
    • Google Ducksworth
      Sign up for crowddd.com and the 506 investor group. Very active mailing list of experienced investors who do due diligence on all the deals. PM me if they ask for a referral.
      Jul 13, 2018
  • Proofpoint / Other gaaandu
    Just buy some lower risk etf's or stocks.
    Jul 13, 2018 0
  • Microsoft yumyup
    Crypto!
    Jul 13, 2018 2
    • New / Eng Jeeeeez
      OP
      This guy gets it
      Jul 13, 2018
    • Microsoft infdc
      Jul 13, 2018
  • Autodesk Adsk84
    MSFT and SHOP
    Jul 13, 2018 0

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