I started a small business 10 yrs ago and I finally hit $1M income. I’m 45 and want to retire. What should I do with this $1M?

[pauljamesreid1981]

I’ve been a lurker on this forum for sometime now and I understand that I need to diversify my portfolio. Besides this liquid million, I do have investments in a variety of stocks and indices of around ~300K.

These are my investment ideas so far and I am looking to better understand on how much I should invest in each category to keep a healthy balance between safe vs risky bets:

1) IRA: safest?
2) Index funds: Safe in long term, not sure which ones to look at besides S&P, Dow Jones. How much should I invest here and in which ones? I’ve heard there are a bunch of ETFs people look at, what’s a good resource that could help me understand this better besides the first few articles on google?
3) Short Term Trading: Big Tech, Big Pharma, maybe Defense? (Is this relatively safe? How short should be short term? What other kind of stocks should I invest in)
4) Angel Investing: In series D and series E startups. Is this lucrative, what is the success vs failure rate in this, where can I find out this info, approx how much should I bet here?
5) Real Estate: Something that is easy to manage. I want to retire so I want to invest in minimal effort properties, I don’t believe buying individual homes gives me this freedom and I’ve read that commercial real estate is even more complicated.
6) Small Business: I don’t want to run or manage a business but I am happy to invest as a silent partner. Should I do this? What kind of businesses should I look at for this? Is it a good idea to invest in a friends’s business? If not, how to trust strangers?
7) Day Trading: If I am able to retire, I would just do this in my free time (in addition to managing the rest of my money) to be productive but I am not sure where to start looking to gain knowledge on this.
8) Certificate Deposits, HYSA, Treasury Bonds: Are Bonds still a good idea?
9) Sell My Business: What are some factors I should use to evaluate the selling price? I have about 2000 clients to who I sell a personalized service.

My goal is to multiply the million dollars into $10M in 5-8 years. My second goal is to make atleast $300K each year in interest/dividends/gains without liquidating a lot of my investments. I have a family of 6 dependent on me so having $300K per year would help us all live comfortably while I am retired.

Appreciate any and all advice on above topics as I am a bit lost. Please feel free to recommend any resources that have helped you in your journey or if you know where I could read more about any of these topics.

Hope the above list helps others on this forum.

 

[sharkbait13]

@pauljamesreid1981 I say this as a financial planner who also has ti manage risk for my clients… I wouldn’t do hardly any of these without carving out a solid foundational amount that’s in simple liquid ETFs that are tax efficient. Then carve out a portion you’re okay with losing if things go belly up. Also be sure your tax planning is solid, as you can waste a lot of money not doing it right, same with estate planning. That’s immediate ROI without the work. I’m biased, but a great financial planner could help narrow in on all your opportunities and help you game plan.

 

[pauljamesreid1981]

@sharkbait13 I have thought about getting a financial advisor/planner. Where do I go looking for one? How do I find a good one out of the sea of people out there?

 

[sharkbait13]

@pauljamesreid1981 There are a few places to search. I would always work with a fiduciary CFP, and I’m biased toward fee-only independent advisors who are well credentialed and have nothing to sell but advice. You can find these advisors on NAPFA or the Fee-Only network. Many firms also have CPAs on staff that can handle your complex tax needs. You’re also welcome to PM me if you have specific questions, and I could refer you to someone who meets your criteria.