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Anonymous

22 Jan 2020

Retirement

What will you do with $500k?

What will you do with $500k? Want to reach FIRE and rest for a while before embarking on anything else. Will prob have additional $200k in 2 years after I sell an investment property and expenses can drop from 3.5k to 2k after that. Early 30s.

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Hariz Arthur Maloy

21 Jan 2020

Independent Financial Advisor at Promiseland Independent

Ok I'll assume you're 33 now and 35 in 2 years time. See, you'll need this money to last you probably 60 years. Mathematically, if you have a 4% yearly return on your portfolio, you'll be able to withdraw 2.5k/mth for 60 years before your 700k becomes 0.

But this doesn't adjust your withdrawal for inflation.

So there are a few ways you can do this. You can invest the 200k from the property in a globally diversified equity portfolio, hopefully make a 7% compounded return on that for 25 years giving you another $1.5m from 60 onwards.

Spend the inital 500k (at a 4% return) over 27 years and take out 2.5k/mth. And then that 1.5m at 60 can last you another 35 years by taking out an inflation adjusted 6.5k.

SO TLDR

Invest 500k in a conservative dividend portfolio giving you 4% per year. Spend that over 30 years by taking out 2.5k/mth.

Invest the 200k from the condo over 25 years in a moderately aggressive portfolio at 7% compounded return giving you 1.5m by 60. Invest that in a conservative portfolio giving you 4% per year. Then you can spend 6.6k over 30 years till you're 95.

Hopefully by then, you die.

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Pang Zhe Liang

21 Jan 2020

Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)

Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-pers...

Next, construct a financial portfolio that is capable to help you reach your goals. For the most part, it will be important to have a well-balanced portfolio that yields both guaranteed and non-guaranteed returns. Accordingly, this ensures that you have a safety cushion during a market downturn while enjoying the returns in the bull market.

Examples of tools that generate guaranteed returns: bank deposits, bonds, annuity

Examples of common investments that generate non-guaranteed returns: ETFs, equity funds, blue chips, stocks

If you plan your finances properly and do not have huge expenses, you will be on track to FIRE.

Here is everything about me and what I do best.

Construct an investment portfolio that yields at least 5% income, which should amount to $25k/yr, $2...

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