What To Do With $5M
After 15 years in tech, some of my options finally turned into real money, over $5M. I'm embarrassed to say it, but the money has actually made me kind of miserable, because I don't know what to do next, I've lost the motivation to keep working, I'm terrified of losing the money, and I can't support my family (2 kids, private schools, big mortgage) living off the gains if investing conservatively. Despite working all this time for this exit, I realize I had no plans for after achieving it. It also turns out $5M doesn't go as far as I expected. While I want to return to a startup, I haven't been able to justify this either. I feel stuck at Apple because my comp is so good (TC $600k); the offers I've gotten require a major cut in income and when I do the math on the options, these companies need to become multi-unicorns to break even against what I'm guaranteed at Apple. If others have gone through this post-IPO, advice would be greatly appreciated. And my advice for anyone dreaming of this kind of money: make sure you have a plan for after you get it!
This is going to sound like poor-person talk (because it is) but... why not just stay at Apple and enjoy your life? Sounds like you’ve achieved more than 99% of the world will/could ever achieve. Maybe it’s time to find other avenues of ‘wealth’ that aren’t monetary. 600K a year is ridiculous money and with millions in the bank... you and your family will have more than enough to live an amazing comfortable life. Why make all this money just to stress yourself into the ground about how to make even more money? Start enjoying yourself and relax dude
Thanks for the advice and reality check. This is definitely the direction I've been going: appreciate what I have and enjoy not having to worry about money for a change (it wasn't long ago I was barely scraping by). I guess I need to let go of the dream that $5M won't require me to work anymore, and rest easy that I have a nest egg later in life. What's made this even harder is that I diversified my portfolio at IPO, and the company's stock has gone up over 3x since. I can't stop thinking about how I really could have been set for life, but if I hadn't diversified, I could have just as easily lost it all - didn't see this pandemic tech bubble coming. Thanks again - hope you strike gold yourself soon.
Of course happy to offer some perspective. It’s easy to get caught up in the tech lifestyle ratrace (especially if you have 15+ yoe like you) so I understand it’s probably weird to reach such a milestone only to find it’s not quite what you expected all this time. And hindsight’s 20-20, don’t beat yourself up for not knowing you could have struck it rich on xyz investment. How the hell could you have known unless you’re some kind of clairvoyant? By ALL possible metrics you have absolutely killed it and you have achieved success most of us will never get to experience. Congrats honestly and enjoy that shit! 🤟🏼
There is more to life than just work! Find a hobby, spend more time with your family, invest in your future, splurges etc...
If you can't live on 4% SWR from 5M you need a budget yesterday. Talk to a financial planner, because that's more than enough to FatFIRE.
Yeah you'd think $200k would be plenty, but my $700k mortgage and 2x private school eats up almost all of this. We live frugally otherwise; 1 car, cook our own meals, etc. One strategy I'm thinking about is moving to a cheaper city with good public schools, which could cut living expenses in half, but then Apple doesn't seem to be offering remote work post-pandemic.
If u FIRE why do u care about aapl jobs? Move to AZ and here u can afford a 5000k sq fr home for 400k. Me wife and baby live in a 3 br 1500 sq ft brand new 2020 built home that we purchased for 228k in phx. Our mortgage is 916$ per month. We dont make bay area money but with a household tc of 250k it goes a long long way as we can invest a LOT per month after expenses
Tony Robbins money master the game has a framework for helping you through this problem
Thanks I'll take a look!
If it were me, I’d be putting it into an index fund. But instead of living normally and forgetting it, take all the gains and pump it into your house to pay it off fully. Now your bills are significantly lower. Same with your car if you owe on it. Get rid of all that interest generating debt and be free. Do the math and see if using the 5M to pay it off now is more profitable long term.
Depends on the interest rate he locked in for his mortgage to see if it's worthwhile paying it all off, or at least some of it off.
Terrible advice imho. Paying off low interest debt is poor man/person thinking. The math doesn’t add up sorry
Congrats, but you really need to invest and diversify it wisely. I would buy 1-2 properties for rental income and put a large chunk in individual stocks and ETFs. And if you are nervous, I will hedge it with some Options to get some protection. I have been successfully doing this with my 2M since over 4 years now with annualized 35% return and using SBN for most of my stock investment decisions and they recently added Options also to the mix - https://www.stockbuzznow.com/post/introducing-option-trades Also, you need to get your motivation back and keep moving forward.
Thanks for the advice. 35% = wow.
pay off your house, it will give you a huge peace of mind. inb4 "more gains if you yolo it on gamestop", yeah yeah, but trust me having a paid off house is great. Your monthly expenses are so low and you have so much freedom.
Also, 5M could generate something like 100,000/yr, in a broad based 60/40 fund (including international). That’s only assuming a 2% safe withdrawal rate as well — pretty conservative. So you could move to a lower cost of living area and not have to work ever again. Just sayin. But congrats on the windfall OP! That’s a nice amount
You could put it into blockfi and get 8.6% apy
Just DCA it into index funds, tax sheltered accounts and backdoor Roth. Pretend the money isn’t there. Stay at your cushy job. Retire earlier than expected.
Very good advice. I can't retire now, but I will be able to retire early. I have found a good, conservative investment manager; it's been hard to watch the tech bubble with this approach, but over the last week, I've finally seen big gains as tech decreased. As someone who has always had to worry about money until now, I definitely won't be touching the principal, that's for sure.
What’s their expense ratio. They rarely justify their cost compared to index fund