What Would You Do W/ $700K

[jlcnuke]

Originally Posted by drewm3i

Buy my dream boat and sail around the world (we are young and poor, but adventurous ��). Probably an Oyster, Hallberg-Rassy, or an Amel. Would head to the South Pacific first for sure to dive some remote reefs before they disappear.

So I would spend about 300-400k on the boat, 200k for sailing budget, and then I would invest the rest so that we could sail forever!

Yeah, that $100-200k left over is gonna produce about $4-8k per year, so I hope you are good at catching fish....

[belizesailor]

Originally Posted by jlcnuke

Good luck getting 5%. The Trinity study etc. concluded 4% historically, and many think that may not hold up in the coming years. I'm still fairly optimistic at 4%, but lots are planning for 3% or less in the early retirement community in part due to current valuations but also because the 4% was based on only lasting for a 30 year period to "not run out" in that time.

Yes, its harder to get 5% totally passively these days, but there are still high grade tax exempt bonds out there in the 3-4% range. Though I do still hold some old bonds yeilding 6.5%, tax exempt!!!...ah, the good old days...the Fed's "Quanitative Easing" and the "Build America" bond programs have really put a dent in my income in recent years.

Im currently doing 5.5 - 7.5% cash-on-cash on multifamily real estate (based on income only, not including appreciation). With a good PM company thats relatively passive, but can be a hassle from time to time.

Also making about 5.3% as a share holder in a private real estate fund.

Of course, even at 4%, $700K still yeilds good beer money. [emoji41]

[jlcnuke]

Originally Posted by belizesailor

Yes, its harder to get 5% totally passively these days, but there are still high grade tax exempt bonds out there in the 3-4% range. Though I do still hold some old bonds yeilding 6.5%, tax exempt!!!...ah, the good old days...the Fed's "Quanitative Easing" and the "Build America" bond programs have really put a dent in my income in recent years.

Im currently doing 5.5 - 7.5% cash-on-cash on multifamily real estate (based on income only, not including appreciation). With a good PM company thats relatively passive, but can be a hassle from time to time.

Also making about 5.3% as a share holder in a private real estate fund.

Of course, even at 4%, $700K still yeilds good beer money. [emoji41]

I'm less worried about taxes than inflation when considering long-term withdrawal rates. Set up right, you can end up with a pretty decent income (mid-5 figures as a single person) and still have $0 federal tax liability.

[belizesailor]

Originally Posted by jlcnuke

I'm less worried about taxes than inflation when considering long-term withdrawal rates. Set up right, you can end up with a pretty decent income (mid-5 figures as a single person) and still have $0 federal tax liability.

Yes, I did that for over a decade when I first...meh, dont like "retired"..."realocated my time"...then things changed a few years ago...still need to do some restructuring.

My effective tax rate is still only about 15%, but thats a big jump up from ZERO!

[barnakiel]

With our lifestyle (crew of 2 here) some 500k in the bank would provide us with a perpetuity style pension plan and a sailing kitty to match our present sailing style.

The remaining 200k would be spent either towards a refit of our boat or else towards getting a slightly bigger, easier and safer craft. We are getting older and this small boat is less comfortable today than it was when I was 35.

A full refit would be about 50k (our boat is worth about 10k, as is).

There would be at least 150k unspent then which I would donate towards people who help take care of abandoned animals.

I could also consider donating some money towards people who are minorities and who cannot live full lives in their original neighbourhoods.

I would donate all the perpetuity base amount (500k) towards above mentioned "good" goals on our expiry.

Cheers,
b.

[belizesailor]

Originally Posted by barnakiel

....

I could also consider donating some money towards people who are minorities and who cannot live full lives in their original neighbourhoods.

...

Like the American Indians maybe? [emoji16]

[barnakiel]

Originally Posted by belizesailor

Like the American Indians maybe? [emoji16]

Maybe. Not in the generic way though.

If you watch the episode of "I will sleep at your place" where he crosses the United States, there he meets that native girl who dreams of having electricity and having a library. Watch it. It is a beautiful shot.

Just imagine finding out such people, and giving them their opportunity.

I think any help, when aimed at classes of people, is always partly misappropriated. Unless we discuss the caste system of India.

Cheers,
b.

[belizesailor]

Historically, indigenous world wide have really gotten screwed and are certainly candidates for assistance (hopefully not of the dependent creating kind, which is all to common).

Ive spent a lot of time around indigenous Mayan in Guatemala, the Kuna in the San Blas (Panama), and to a lesser degree the Ngäbe-Buglé of Panama. I have friends from all 3 groups. The Mayan history is both incredible and tragic (especially tragic in modern times). The Kuna have overall fared the best, partially because of being on the fringe of overlapping spheres if influence (Colombia, Panama, USA)...so none were motivated to wipe them out. The present day Ngäbe are remants of a civililaztion wiped out by a volcanic eruption, not imperialism, and are just marginalized agriculture workers now.

While broader assistance for a category of people can be beneficial, I prefer to directly assist individuals I know because I am more confident that my assistance has good odds of being effective. Because, at least in my opinion, there are many (regarless of whether indigenous or not) for whom assistance just creates dependency, rather than improving their situation in a way that they can then sustain.

I also dont hand out cash, to individuals or charities, because I have no confidence the money will be used effectively or for its stated purpose. I prefer to assist individuals by paying directly for goods, services, education, healthcare...

So, if a spare $700K suddenly dropped in my pocket to use to benefit others, I would likely use it to assist individuals/famalies who I think are capable of improving their lot in life with a little initial boost to help them on their way.

Cases in point: Im helping a very poor family in Panama now, whose primary bread winner is seriously ill and cant work. They are good people, but dont realistically have much potential for improving their situation. So, Im paying directly for his healthcare expenses and for groceries for the family (just went to market with his wife yesterday)....until he can resume work. By contrast, one of my workers in Guatemala, and his wife & kids, are pretty sharp and motivated, Ive helped them by paying for additional education for him, his wife, and his kids. They are capable of running with it after I help them get a little more education/training...and they have.

Anyway...I would do more along those lines with an extra $700K.

Originally Posted by barnakiel

Maybe. Not in the generic way though.

If you watch the episode of "I will sleep at your place" where he crosses the United States, there he meets that native girl who dreams of having electricity and having a library. Watch it. It is a beautiful shot.

Just imagine finding out such people, and giving them their opportunity.

I think any help, when aimed at classes of people, is always partly misappropriated. Unless we discuss the caste system of India.

Cheers,
b.

[denverd0n]

Originally Posted by belizesailor

...hopefully not of the dependent creating kind, which is all to common

And therein lies the problem. Except that I think "all too common" should be "most of the time" and, sadly, perhaps even "almost all the time."

[belizesailor]

Originally Posted by denverd0n

And therein lies the problem. Except that I think "all too common" should be "most of the time" and, sadly, perhaps even "almost all the time."

Yes, quite common. Thats why I prefer to help those who can help themselves...with a little initial boost. Of course, even those dont always work out.

Those just looking for never ending handouts, rather than a hand-up, I shed pretty quickly.

[robdyson]

what i would do with $700k

i would go to thailand or phillipines (leave the wife there) then hire a couple of hot young girls who can cook clean the boat and look after me cos im now 10x better looking!!

[belizesailor]

Hopefully your wife does not read this forum! [emoji16]

[Kenomac]

Buy an Oyster 53 and sail the Med.

[David M]

Pay off some debt, put it into a larger house.

[Fence Man]

Not far from our place, there was recently a multi unit apartment building for sale. Somewhere around $350K asking price, was in good shape, and had 16 units grossing somewhere in the neighborhood of $7,500/month with 90% occupancy. Deducting management cost, operating expenses, and savings for repairs and updates, it would have been enough to cover our land based overhead and leave plenty for a monthly cruising budget. That'd leave $350K out of the 700 for a boat budget and good cushion of cash without liquidating the farm, tools, house, etc. Or, buy a boat and party till it's all gone.