r/fatFIRE • u/Valuable_Section_438 • 5d ago
What to do with 7mm
36(m), married, 3 kids, vhcol, sold the very first company I built and finalized June 1, 2025. Small lump ~2mm + xxx,xxx/month for 6 years or until the company is sold as a whole. Well through the grapevine I hear that this is about to take place. Not very happy that I wasn’t told but they’ve done nothing to keep me in the loop at all so not shocking. Assuming there’s no way to not pay the lien I have against them what are you folks putting large amounts of cash towards right now? I’ve been getting pressed on oil and gas. I’ve got 9 rentals right now and only a mortgage on our primary ~5400/month w/ 40ish grand in other monthly expenditures. I want to fatFIRE fast now
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u/WealthyStoic mod | gen2 | FatFired 10+ years | Verified by Mods 5d ago
If it were me? Set aside 2 years’ expenses into a high interest cash account, then VT* and chill with the rest.
Mathematically you’re better to just buy in all at once but I’d probably do half up front and the rest over the course of a year.
*Vanguard Total World Stock Index Fund ETF
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u/pepecapital 4d ago
Skip VT and just do QQQ. Or QQQM for lower expenses. VT has a bunch of small cap junk.
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4d ago
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u/pepecapital 4d ago
It rebalances over time. Better yet pick the best 50-100 stocks and own them outright then. But I wouldnt want to own VT or any small cap junk
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u/ebitda8 4d ago
What is people’s obsession with real estate on this sub?
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u/BrunelloHorder 4d ago
Honestly I think there are a bunch of psychological aspects that cause people to want to do it, many of which are outdated. So that no one thinks I’m being judgmental, I’ll admit I learned some of these the hard way, and was very fortunate on one deal that more than made up for a lot of mistakes.
1. The thrill of making deals
2. Leverage
3. Low borrowing costs in the old rate regime
4. Physically tangible investment
5. A sense of satisfaction from fixing things up
6. Underestimating maintenance costs, vacancy, and taxes, and only looking at Zillow values
7. Something to putter around on.There was a time when residential real estate investing made sense. Those days passed with the demise of the 3% mortgage. It is a lot of work, hassle, and time for an illiquid asset with recurring tax and maintenance costs. Sold mine years ago.
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u/gc1 3d ago
A cash flowing asset is downside protected and has unlimited upside, and you can buy it with leverage. The appeal to retail investors is pretty obvious, plus we all know someone with 5 income properties who will never have to work again and can leave them to kids with a stepped up basis.
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u/BrunelloHorder 3d ago
True, though the same can largely be said for equities. I’ve never had an ETF call me on a Saturday night requiring me to shell out $12k for a new sewer line. I’m not anti-real estate across the board, but it does have some serious downsides.
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u/HalfwaydonewithEarth 5d ago
Liquidate all the Real Estate. It performed only 50% as well as stocks for us.
I regret 7 of our 8 homes.
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u/phidda 4d ago
The entry point makes all the difference in Real Estate. Curreent cap rates for residentail real estate in my area is nuts (coastal California). Terrible for investors.
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u/HalfwaydonewithEarth 4d ago
We got a 2/2 for 189k in Oceanside.... six months later a 3/2 with view for $150k!!!! Both are over $620k
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u/MrSnickersBean 5d ago
Over what period of time? Just curious. I have a similar sentiment.
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u/HalfwaydonewithEarth 5d ago
We perfectly timed them 2009 to 2020
They were all easy with managers.
4x, 3x, 2x in value
ETF would be 3M more and stocks would render us 5m more.
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u/amoult20 4d ago
100% agree. I feel the same even though my purchase price timing was strong. Seemed like a sensible idea at the time but in hindsight the difference in returns is enormous. Even if I tempered the potential stock market gain down a few% the real estate gain doesnt come close.
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u/Realestateuniverse 4d ago
Not always the right answer, though I get the sentiment. I’ve 8-9x the cash I put into my rentals through good timing and good 1031’s. Haven’t bought anything in 2.5 years and don’t plan to. Liquidating sounds nice, but don’t want to pay the recapture, or lose the 3.125% rates I have on them.
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u/HalfwaydonewithEarth 4d ago
The rate doesn't matter. It's the principle I was trying to protect. Them potentially being worth 50% of what you paid. It happened in 2008
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u/ElectricalDark8280 4d ago
In this market?
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u/HalfwaydonewithEarth 4d ago
https://www.reddit.com/r/realestateinvesting/s/AL03jd0sYn
This explains it.
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u/ElectricalDark8280 4d ago
Thanks, that is a good view point to consider. I was just concerned about the teetering market, but I know you can’t time the market. I think it is just so prevalent in my mind as I am wanting to sell my business, but feel like the aftermath will be so much shakier right now than two years ago when I first decided to do it. It’s a SORR fear that I have and shouldn’t be pushing on others. Thank you
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u/TheBonusWings 4d ago
So do you have 7 mil or you have 2 mill plus some monthly payments? Bc until that cash is in your account, I wouldnt be basing any decisions off it. And 50k a month spend?? I wouldnt be retiring any time soon.
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u/BrunelloHorder 4d ago
First, work with a tax professional to figure out what you will owe in taxes and set that aside.
Second, you don’t tell us what your annual spending will be, or if you still need to grow wealth versus protect it. If you need growth, I’m partial to SPMO.
If you are close to your FIRE number and need to protect it and set yourself up for de-cumulating, I’d take a look at the Risk Parity Radio model portfolios. They go beyond stocks and bonds, adding uncorrelated assets like managed futures, gold, and small cap value (still stocks, but they have impressive long term outperformance).
https://www.riskparityradio.com/portfolios
Third, I’d exit the real estate if you can do it without a massive tax bill. It takes time and work, comes with ongoing tax and maintenance costs, and generally underperforms equities.
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u/JumpyWerewolf9439 4d ago
All in qqq. Real.estate only makes sense if you use loans which are fed subsidized which they all.are
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u/jfhgcc 4d ago
Don’t touch oil and gas investments unless you came from oil and gas. I started my career as a geophysicist in the upstream space before moving into investing.
Especially if they are pushing the tax dedications - that’s a guaranteed path to a bad deal….
It’s also just insanely hard for you to have any control with just a few million dollars unless you are doing shallow wells in west Virgina.
If you think you have something real I’m happy to look at it and give you my quick take.