Where Should I Invest My $1 Million After Selling My Equity? – Seeking Advice at Age 50

Anytime you receive a windfall of money, whether through a lottery win, inheritance, job bonus, or an equity sale, the big question is what to do with the money. In the FIRE (financial independence, retire early) world, the hope is that you can use this money to accelerate your FIRE date and say goodbye to work emails forever. 

According to a post on r/Fire, this is precisely the scenario one Redditor now has to go through and think through. Having received $1 million from an equity sale, they are now wondering where to put it to use. With an already sizable portfolio, they want to make the best use of the money possible. 

This is a fantastic question, considering that this Redditor is already a millionaire many times over. In other words, they could easily deposit the money into a brokerage account, but they are being smart and trying to grow it.

The Next Step

In the case of this money, the Redditor has a list of different options they can take advantage of. Of course, the first question is, where is the Redditor’s money right now? According to their post, they have a $3 million “balanced portfolio,” although we are missing specific information about where their money is currently. 

Aside from the silly idea of hiding all the money under the mattress, the post’s comment section has no shortage of recommendations. Perhaps most importantly, this Redditor should first decide whether to keep it all in one place or diversify across a series of different investments. 

The bottom line is that with a paid-off house, there isn’t much the Redditor needs to do regarding expenses. Even if they don’t have a paid-off car, taking care of that with the money would be an unnecessary expense. This leaves the only option being to invest the money so it earns more. 

Where to Invest

Considering they already have a balanced portfolio, this might be an opportunity to take a little more risk overall. For this reason, several Redditors recommend splitting the money between CDs, bonds, and treasuries to keep the money out of the stock market due to tariff uncertainty. 

Alternatively, you can invest half of it in mutual funds, or go with an option like SPY, an Exchange Traded Fund (ETF) that tracks the performance of the S&P 500. Considering the average annual return of 10% for the S&P since 1957, there is no question that this could be a smart move. 

At 50 years of age, this Redditor doesn’t need to be super conservative with their money, nor do they need to be unnecessarily aggressive either. Another alternative is somewhere like a Vanguard fund, or go with a more conservative option like a CD earning over 4%, and sleep peacefully at night. If the Redditor chose this route and let the money sit until they turn 65, at 4% compounded interest, they would make $800,943 in interest. This is hard to ignore as it will give them additional walking-around money for retirement. 

Time to Fire

The Redditor doesn’t mention when they plan to FIRE, though it stands to reason that this money likely gives them another incentive. With $4 million invested, they could take around $160,000 out annually, assuming a safe withdrawal rate of 4%, which will likely result in $120,000 after taxes. 

With a paid-off home, there should be plenty of money to live comfortably, including travel, entertainment, and just enjoying life. There is no question the Redditor is now at a point where they can take up a hobby of their choosing and live their life. 

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