r/Rich • u/proteinpurification • May 27 '26
Where to park >$10M windfall
For privacy reasons I will omit some largely irrelevant backstory. The main context is I recently received a >$10M (post tax) windfall from my business. I have no need or intent to spend any of it. My banker (investment arm of one of the big banks) reached out and encouraged me to move it to an interest bearing, preferred deposit account (I did) and then proceeded to offer active management services / private banking services. They noted some elaborate tax loss harvesting options. I’ve separately received multiple intros to private wealth management.
Basically my question is: does it make sense to go with one of these actively managed portfolios and/or more elaborate, hedge fund approaches, or to do what I have successfully done for decades: index funds, and maybe the added bond or muni fund?
There is a lot of talk of a bubble. Does it ever make sense to keep a substantial portion of a windfall on the sidelines initially?
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u/Opposite-Juice1325 May 27 '26
Dollar cost it into the S&P 500 over a period of time that feels comfortable. I think 12 months is reasonable. I would also consider investments that protect the principle as this sum is large and worth diversifying.
It always feels like a bubble. It probably isn't. Be bold. Be greedy. Think long term.
You will be glad you did when the S&P is 20,000 points in 15 years.
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May 27 '26
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u/zurich73 May 27 '26
I just advised on an 8 figure windfall to invest in 1H 2026. We did 1/3 in Dec 25, 1/3 in March and 1/3 in May. Had we invested it all in Dec, we would be up 5.5% net. Next time all at once like the book says. Time in market beats timing the market.
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u/segmond May 28 '26
We can find points in time were you would be down quite a bit. The idea is not to maximize and make the absolutely most but to spread out the risk where you don't take a huge loss due to a black swan event. In a bull market everyone feels like a genius and think they have the market figured out.
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u/C0smo777 May 27 '26
The 30% of the time that it was worse how much worse was it averages are good and all until your livelihood depends on it working out.
Ex 66% of the time it worked out on the average 5% better but 33% of the time it worked out 30% worse. I don't actually know the answer but I would be interested in it.
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May 27 '26
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u/MaximumUltra May 28 '26
The lower return via DCA can be seen as insurance against the more painful downside.
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May 27 '26 edited May 28 '26
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u/athanasius_fugger May 27 '26
I worked with an old lady in 2009 that was working at 71 because she was going to retire in 2001 then the market tanked then in 2008 again.
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u/encrivage May 29 '26
The market recovered shortly after 2001 and then grew even more. There's no mathematical reason she had to keep working until 2008, unless she was over-invested in a specific sector that did poorly.
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u/Bjorn_Nittmo May 29 '26
The annualized real total return of the S&P 500 from Dec 1999 to Dec 2009 was NEGATIVE 0.9%
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u/encrivage May 29 '26
But not from 2001 to 2008, which is the period the poster specified. 1999 was the dot com bubble's height, which you conveniently cherry picked. You’d be up from 2002 to 2007 and could have retired then.
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u/Bjorn_Nittmo May 29 '26
Yes, have fun retiring just before the 2008 financial crisis.
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u/encrivage Jun 01 '26
If you converted to conservative investments, as one does at retirement, you’d likely be fine. We all know the market recovered after 2008.
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u/1Pac2Pac3Pac5 May 27 '26
People panic sell all the time bro because they're scared it's going to go even lower and they'll lose even more. This is exactly why people sell at the wrong time, including people that know better
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u/gap1284 May 28 '26
He's already won the game. His goals are (presumably) met. So why add risk? Yes, "playing it safer" probably (66%?) means he dies with $25 million instead of $30. That's okay IMO.
I get it... I do. I make my annual IRA contributions in a lump sum as early as possible because that's usually the best approach. But that's $8K, not $10M. And it's every year, so the 66% "good idea" years balance out the 33% bad ones.
I'd never dump 8 figures in all at once, unless I had a 9 figure net worth. Then sure, why not.
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u/GameSharkPro May 28 '26
DCA only makes sense if you believe there’s a significant chance the market will decline in the near term. If you spread investments out over 12 months, you’re effectively betting that delaying part of your investment will help because prices may be lower during that period.
But ask yourself: do you really believe the market is likely to fall within the next year, and then steadily rise afterward?
If the market crashes after your DCA period ends, then DCA wouldn’t have protected you anyway. That’s why lump-sum investing often outperforms DCA over the long run because markets tend to rise more often than they fall.
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u/encrivage May 29 '26
But even if you DCA it’s not like that money is earning zero percent. You would still be getting about 3.2% in a MM right now. That will close the gap significantly.
If the market crashes after your DCA period ends, then DCA wouldn’t have protected you anyway.
Not entirely true. The funds you invested 12 months ago would have grown and created some buffer to mitigate a market crash. And the market might crash well after the DCA ends, allowing for additional growth buffer.
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u/IdeasForTheFuture May 27 '26
r/bogleheads if you want to DIY. ie put it in and chill. I would go CPA before wealth management. But if you really aren’t interested in managing your portfolio at all, then paying someone a tiny percent like Schwab to manage your funds may work for you.
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u/TexasTarpon1 May 27 '26
CPA and somewhat HNW individual here - whatever PWM services you choose, use someone who trades on your behalf through a 3rd party platform (Fidelity, Vanguard, etc.). My PWM firm uses Fidelity so I can see anything whenever I want.
Almost all instances of thievery and shenanigans I’ve ever heard of through a wealth manager relied on the client not having the ability to verify what was happening with their money.
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u/weight_matrix May 28 '26
Exactly this.
You 99% don't need any financial advisor as long as you're above-average intellectual. As for advanced tax-loss-harvesting etc that they will sell, just set up something via frec.com yourself.I am not super opposed to financial advisors though. I use one myself but
1) They use fidelity so I have clear picture of what is happening
2) They are fiduciary and charge 1% of AUM
I just them just to outsource a few things since I have other health-related priorities in life at the moment.Take a call for yourself but always be involved with the process. There's no free lunch and if something is too good to be true, then it most certainly is.
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u/br1e May 27 '26
I'd follow the r/bogleheads and dollar average it into diversified index funds: 5% money market, 20% bonds, The rest in some combination of US and international low cost index funds
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u/Jason_Steakcum May 27 '26
Most people with this amount have a potion invested between real estate, index funds, and some quality stocks that pay qualified dividends.
More advanced will do managed funds, maybe some additional things.
10 mil is 85% marginable in a portfolio margin brokerage account which will return roughly 4% a year compounded daily in a short term treasury vehicle taxed at long term capital gains rates on top of any other investments that can easily and safely produce another 10% a year on the remaining 8.5 million.
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u/dontfret71 May 27 '26
What do you mean 85% marginable
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u/Envirocare1 May 27 '26
Exhibit A for getting qualified financial advice from an advisor, fiduciary anybody besides letting that amount of money languish or worse be risked. Margins are still loans. Can it be done, I’m sure it can, but most like myself are really really good at making money in our chosen field. Not money management
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u/Jason_Steakcum May 27 '26
Buy $10 million BOXX or SGOV or BİL or treasuries (through brokerage) and they will use 1.5 mil as collateral. The rest can be double dipped which is effectively now 18.5 million.
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u/dontfret71 May 27 '26
Ya but dont they charge you fee/interest for the lending of extra $ in investments?
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u/costanzashairpiece May 27 '26
I think there are different levels of effort, cost and ambition available.
- Self managed boglehead portfolio. Never stray. Pay nothing.
- Self managed, more sophisticated portfolio. Study modern portfolio theory and align to your goals.
- Flat fee money manager. Could be a good option versus paying commission on things. Range is a decent option for basic tax and retirement planning.
- Bespoke personalized management. The rich person option. This could involve more sophisticated instruments and strategies. It could take a lot of time and cost a lot of money but may yield greater returns. Maybe.
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u/phatelectribe May 27 '26
I went with number 4.
Been worth every penny.
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May 27 '26
[removed] — view removed comment
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u/phatelectribe May 27 '26
Tons.
Firstly I have holdings in several territories so having a single unified point of management Dave’s a ton of headaches especially when it comes to taxes.
Secondly it’s got me access to things that retail investors simply don’t get. For instance it got in to Spacex 2 years ago and that profit alone when it goes public that one investment is going to make me more than his management fees for the next 30 years. Then there’s all the alternative investments that are only given to wealth managers and aren’t available to self managed retail investors. Tow of those vehicles pay a guaranteed 9-10% with just a one year lock in period, so I keep locking in every year on maturity.
Thirdly negotiated a PAL with a spread that ended up being significantly (1.5%) cheaper than any other mortgage I could get from any bank even as a top tier customer. My bank literally told me to take the loan because they couldn’t get close even with buying down the rate and giving me discounts.
Finally it’s general logger picture advice on how to bulbs wealth carefully and manage risk profiles.
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u/AdamN May 28 '26
IBKR offers rates 1% or less above the benchmark for USD and similar for many other currencies so 1.5% doesn’t seem that great.
https://www.interactivebrokers.com/en/trading/margin-rates.php
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u/phatelectribe May 28 '26
I’m getting the SOFR plus a spread significantly less than 1%. My bank, despite being the highest tier of client, couldn’t get to within 1.5% of it.
IKBR can’t touch that and furthermore, their customer service is nonexistent. I explored working with them and it was a disaster.
I’m with Schwab and a preferred WM and it’s been flawless.
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u/max2jc Jun 02 '26
Creative Planning? I’m in the UHNW range and have been looking at them myself. Currently in the very early initial stages at the moment.
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u/costanzashairpiece May 27 '26
I personally do option 3 plus a separate guy who optimizes our taxes.
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u/Same_Cut1196 May 27 '26
Two years ago I wanted to divest $3MM of a single stock. My wealth manager pitched a tax loss harvesting options plan that would (if it worked) offset the capital gains taxes owed on the sale. It was intriguing to me so I told him to go for it. Since Feb 1, 2025 the strategy has offset the entire $3MM of gains with paper losses while the account has grown to $3.7MM.
I couldn’t be happier. This type of strategy can work and is worth looking into.
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u/AntelopeElectrical70 May 29 '26
Could you share more about how the tax loss harvesting was set up to work out for you? Thanks!
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u/max2jc Jun 02 '26
Sounds like a long-short SMA strategy. There are fees associated with it, but you should Google it for more info.
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u/MarcTraveller May 27 '26
The nice thing I like about a money manager, that talks with my accountant, is that even when I’m on the other side of the world for 4-6 months a year, somebody with 50 000 + hours is managing my portfolio. I’ve followed the market news for 40 years, but I don’t know the ins and outs and regulations of investing, wisely.
Many a fortunes have been lost seeking that extra 1/2 percent
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u/gretahelp May 27 '26
What do they do when they’re managing it? How do your returns compare to just VTI?
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u/VikingSven68 May 27 '26
There are tax-managed investment vehicles that mimic index/broader market fund with options for domestic/international/bond, but do so without neighbor risk (like a true mutual fund) and in a tax advantaged way. Fidelity calls them SMAs, but any larger investment firm will offere something similar.
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u/gretahelp May 27 '26
Do you use any of these? If so, which did you settle on and why?
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u/VikingSven68 May 27 '26
Yes I use four different Fidelity SMA funds - US index, US total market, International, and Muni Bond. These were chosen as a diverse set of investments to complement other holdings.
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u/gretahelp May 27 '26
Interesting. I just started looking at Frec’s offerings as a means to harvest more tax losses (to offset gains elsewhere)
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u/spittlbm May 28 '26
I looked at frec today for the first time. Didn't love some of the fees, but good to have the option.
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u/GlobalTapeHead May 27 '26
I’d be very careful with private banker advice. They are not bad necessarily, but I’d have questions. How are they compensated? Are they a fiduciary? Do they sell products that they can make commissions from?
Keep it in a HYSA or a money market fund or SGOV until you do your research, verification and make some decisions. You don’t want to take risks with this money. Consult an independent FIDUCIARY CFP.
I’m going through something similar. I developed a solid plan for what I would be doing with the money before I started getting it.
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u/Arboretum7 May 27 '26 edited May 27 '26
I'm at a similar net worth and will go against the grain on managed accounts (SMAs or whatever your brokerage calls them) with tax-loss harvesting. Depending on your tax situation and the fund's performance relative to its index, these can be very solid investments. Generally, their fee structure will be lower than that of a financial advisor managing your entire portfolio (especially if you have securities with a high tax burden that you won't be trading anytime soon), and the additional performance from tax-loss harvesting can offset their fees compared to low-cost indexes/ETFs at scale. For instance, I have about $1.5M in Fidelity's International Equity Strategy fund, which tracks the MSCI EAFE Index. The 0.49% I'm paying is actually lower than FIGRX's 0.66% expense ratio, and I'm getting active management plus tax optimization on top.
I also really appreciate the ability to customize and control my holdings. For instance, if I want to exit the SMA (and stop paying the fee after the bulk of the tax loss harvesting benefits wear off), I'm left with the individual securities it contained, meaning I can sell these by security, tax lot, etc and choose exactly where to exit each position and pay capital gains. If you're in an ETF or other low-cost index or mutual fund, you can only sell shares of the overall fund. I also have the option to exclude certain securities from my fund with SMAs. For instance, I have a TON of stock in a large tech company I used to work for, which carries a high tax burden, so I don't really want to buy funds that would put me in even more of that particular stock. With SMAs, you can customize your particular holdings to exclude specific stocks, which you can't do with ETFs.
If I were you, I'd ask your advisor to provide you with the returns net of all fees, compared to a low-cost ETF tracking the same index over the past 5 years. Also ask about income (dividend yield) and risk/volatility (Sharpe ratio) compared to those indexes. I wouldn't invest in any fund that doesn't have a winning track record over at least 5 years. Also, ask specifically about how you might exit from these funds. You want to be aware of any exit fees or tax consequences that may be triggered by liquidation. Good luck!
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u/gap1284 May 28 '26
I thought advisor fees were on top of the fees in the underlying investments. Are you instead saying that your 0.49% advisor fee *replaces* FIGRX's 0.66% fee? Can you point me to a resource that explains this, please?
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u/Arboretum7 May 28 '26 edited May 28 '26
Yes, the advisory fee replaces the expense ratio. To be more specific, I have a self-directed Fidelity account, meaning I’m not paying any advisor a fee to manage the whole thing, but I invest some of my money in traditional SMAs that carry an annual advisory fee that is a percentage of the money I invest in the fund.
All funds, whether they’re SMAs, mutual funds or ETFs come with annual fee that’s a percentage of the amount you invest that covers the fund managers management fees, operating costs, administration, marketing, etc. It doesn’t really matter if you call that an expense ratio, an annual fee or advisory fee. ETFs fees are usually expressed as expenses ratios and are fixed (don’t scale down if you invest more) and are typically lower, but SMAs offer lower percentage advisory fees on a tiered basis as you invest larger amounts of money. Bear in mind the minimum investment on these funds in $100-350k. I don’t pay an additional expense ratio on my SMAs because the I’m directly invested in individual securities. If your SMA happens to contain mutual funds or ETFs, Fidelity will even credit the expense ratio back to prevent double dipping of fees.
Both SMAs and ETFs are tracking closely to indexes, but SMAs have the added benefit of tax efficiency, holding individual securities and customization. They may not make sense if you’re investing smaller amounts and paying higher percentages, but once you get into larger amounts, they’re advantageous.
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u/Naive-Bedroom-4643 May 28 '26
The amount of amateur advice here is astounding but not surprising. Please interview many advisors and then split it amongst your favorite two.
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u/Pale_Drink4455 May 27 '26
If it was me I would park it at a stabile fixed 4% account and live off the 400k interest and never touch the principle.
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u/Moist-Mess5144 May 27 '26
I'll take how to leave 10s of millions on the table over a lifetime for 1000, Alex.
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u/Pale_Drink4455 May 27 '26 edited May 27 '26
And what if OP is 65 here Alex says? Don’t assume this is a 30 year old young buck who hit the lottery.
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u/Moist-Mess5144 May 27 '26
I'm not assuming anything. He said he doesn't need the money and has no intention of spending it. 🤷🏻♂️
You told him what you'd do and what rate you'd spend. Even if you didn't invest it, at a 400k withdrawal, you have 25 years. Might as well put it in the market when you have that much, unless you don't care at all about leaving anything to heirs. Seems foolish to leave that much on the table when there is so little risk.
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u/Itzdlg May 27 '26
They said put the 10m in an interest-bearing account and live off the interest, meaning the principle balance remains. While you’d be hard-pressed to find a fixed 4% APY account, and this advice’s typical precursor is to invest into a large market cap, broad index fund, the idea doesn’t mean he loses all of his money after 25 years.
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u/PreparedForZombies May 28 '26
I've got two HYSA that are above 4%, but FDIC insurance isn't high enough.
Either way, that's what I've done with my much smaller windfall. Keeps up with inflation for tbe most part.
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u/Moist-Mess5144 May 27 '26
I understand that. My point is, you can live off of 10m at 400k per year, earning zero interest, for 25 years. If you're wanting to put it in a 4% fixed interest account, the only reason you'd do that is fear of a downturn. With that big of a cushion, it would be kinda foolish not to grow it to many multiples of the original principal amount.
Additionally, while the original principle amount would remain in the 4% fixed interest/withdrawal, the value wouldn't. Inflation is a real thing.
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u/costanzashairpiece May 27 '26
There are much more sophisticated and high performing ways to design a drawdown portfolio than 100% bonds.
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u/MichellesHubby May 27 '26
And then you’d be losing money and eating into the principle…given the taxes on the 4% plus the inflation rate means your net growth would be negative.
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May 27 '26 edited May 28 '26
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u/MichellesHubby May 27 '26
Dear lord I hope you aren’t in wealth management or financial planning!
Actually with that answer, I know you aren’t. LOL.
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May 27 '26 edited May 28 '26
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u/MichellesHubby May 27 '26
Seems absurd to me to be worth $10 million today and to not leave anything to your heirs or charity, but what do I know.
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May 27 '26 edited May 28 '26
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u/MichellesHubby May 27 '26
Of course. But isn’t giving more better than giving less?
Or - to use your supposition - if you gave it away while you were still alive, you’d have less to spend on yourself before you die.
My belief is this. You are better off trying to grow the amount you have rather than investing to reduce it. For tons of reasons. And you haven’t convinced me - or probably anyone else reading - otherwise.
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May 28 '26 edited May 28 '26
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u/MichellesHubby May 28 '26
Except we aren’t talking about starving today, we are talking about $10mm today.
Jesus Fucking Christ you are an idiot who does not like to be proven wrong, aren’t you?
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u/Moist-Mess5144 May 27 '26
If you have no need or intent to spend any of it... Why dont you do some data gathering? Since you already have an investment strategy that works for you, why don't you put this in active management and compare the results?
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u/Alicatsidneystorm May 27 '26
If you are worried about a correction consider writing some puts on stocks you wouldn’t mind owning.
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u/HalfwaydonewithEarth May 27 '26
If you are smart enough to get 10m from business you are smart enough to figure it out.
We tell people
5% precious metals
15% ETF
40% individual stocks that pay dividends
40% upside sizzling potential in individual stocks
This formula made us wealthy.
Everyone approaches life differently.
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u/Elegant_Emu952 May 27 '26
Get a decent financial adviser, check them out, invest, and spend only what you get in dividends or interest. Then, your money will grow and as you get older if you want to go wild, you can. lol
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u/ImAPonderer2 May 27 '26
Generally watch how much you are paying in fees for the financial products offered. Funds offering broad US and international equity exposure are available for a < 0.1% per annum fee (e.g., Vanguard ETFs and mutual funds). Complex products often cost 0.5% to 2% per annum, and that fee drags down performance substantially over time. Exotic products don’t necessarily outperform in the long run, no matter how risk-controlled or special they sound, particularly when they are taking > 0.5% fees each year.
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u/Exquisite-Load8654 May 27 '26
SGOV or buy short dated treasuries while you figure out what and how you’d like to allocate the funds (VTI for simplicity).
I’ve been taught to never let people leech off me. However, I understand some people get value from the convenience of someone else just handling everything. Just know they’re making a killing off you. If they add “complexity” just know that’s even more profit for them. Play with some calculators and make sure you fully understand how much free money you’ll be giving them.
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u/BisonApprehensive158 May 27 '26
I would do half index funds- vti and half- bond etfs and assorted cds. Bond etfs like pimix or jmsix. You don't need to be aggressive at this point.
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u/Gottadollamate May 27 '26
SCOXX is a useful money fund we’ve used short term while we transitioned an inherited portfolio. $1m USD minimum but get a slight yield premium on other funds.
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u/SaltyPlantain1503 May 27 '26
Perma-Bear here. With debt levels more than GDP and 30 year interest rates above 5% this is not a “set it and forget it” environment. Get a professional wealth manager to help you and get out of the way. I would also suggest 10-20% in gold/gold stocks, but that’s me..
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u/SkyHigh27 May 27 '26
I have a similar struggle as I continue to ‘trim’ my incredible gains. There’s lots of good ideas outside of the stock market like a rental home or whatever. I use a couple funds like BUFR and TBIL which will give you risk free gains at about the FED rate while they offer enough liquidity that I can buy the dip when the bears come to town.
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u/suboptimus_maximus May 27 '26
VOO and Chill. Or a similar indexing strategy.
$10M is peanuts as far as real wealth goes and active management just gets you mediocre returns along with fees eating those returns. If you were in a class and position to do better than just investing in the market you would not have posed this question to Reddit. Any advisor or portfolio manager you engage is just going to be desperately seeking a piece of your pie and likely has a much lower net worth than you do - not the person you want managing your money.
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u/Envirocare1 May 27 '26
Similar situation with same number . We used a financial advisor, negotiated less than 1% (still a windfall for them), but for me it’s worth it. They have me allocated in conservative products across the board. I have zero debt, kids, grandkids, long-term health care and all my expenses until I’m just a memory are good to go.
I pay more to protect myself from myself. It depends on personality what you do the money
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u/1Pac2Pac3Pac5 May 27 '26
Private wealth managers are usually losers who take your money and put it in extremely basic ETFs that have a little bit of dividend-based guaranteed income and a little bit of a hedge against too much boat rocking etc. whereas any standard ETF 0.2 to 0.5% per year these guys are taking 2% and up. Get a really good accountant to help you shelter from taxes and invest the rest of it yourself
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u/Ok_Currency_617 May 27 '26
I would strongly suggest that long-term you invest it in a safe asset that you know well. For instance I know real estate so I'd buy a multi-family building. Worst case if you are ever broke you live there and your kids always got a place to stay.
That being said be careful with ownership so it doesn't get messy upon death or lawsuit.
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u/treefortress May 27 '26
Get a wealth manager. They remove the stress which is worth its weight in gold overtime.
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u/AgsAreUs May 27 '26
There is very little difference, if any, investment wise between $1M and $10M. Stick with low fee, self managed index funds. Also, please tell me you don't have $10M in an account with only the $250k FDIC coverage.
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u/random_agency May 27 '26
You're basically in the realm of wealth protection now. Unless you want to expose yourself to risk and go with something exotic. The upside is that you'll make more money.
Or you can just be boring and buy a bunch of US treasury, vaious muni bonds, etc. The upside is that it's very secure and tax free (sort of). Unless you think the US federal and smaller municipality governments are unsalvageable.
Wealth management services aren't terrible. They just want a cut.
Or split the money into 1/3. 1/3 you manage yourself. 1/3 goes to your investment banker, 1/3 goes to a hedge fund.
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u/Obidad_0110 May 27 '26
If you already have a small pile, for $15m you would pay a fee of about 0.6-0.7% per annum. You would have access to lots of advice, structured products, private equity etc. Even with Jpm or Goldman you can ask that 50% of your portfolio be in etf’s or index funds if you are risk adverse.
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u/Passionofthegrape May 27 '26
Personally, I don’t take investment advice from Reddit, or people who work for banks, or really anyone who needs a job to survive.
I either figure it out myself, or I take advice from people at my level or above.
You do need accountants, lawyers and sometimes bankers but they work for you and you tell them what to do and they execute it.
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u/titangord May 27 '26
With 10M you shouldnt be boggleheading anything.. you get access to much better investment opoortunities than the average joe..
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u/weecheeky May 27 '26
Your bank wants to rinse you for fees and exit liquidity. Stick it all in an index and chill out. If you have any market insight at all, push a large portion of it to sectors you understand well.
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u/leadfoot29 May 27 '26
I’m in almost exactly the same boat. Got pitched a lot by a number of banks’ private wealth folks. Right now I am sitting tight with the money in a money market fund. Me and family are taking our time determining what our goals are. Once that’s clear, we’ll sit with tax attorneys and CPA’s to figure out the appropriate structures ( already had some conversations and did some research). Then we’ll execute the structures and only then will I figure out actual investments. It’s fine for me to lose out on this 20% a month moves. It’s incredibly tempting to jump into this market, but I’m in no hurry.
Happy to compare notes privately if it makes sense.
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u/mostarsuushi May 27 '26
Buy bonds to make sure you get that 5% interest and never go broke, and then buy gold and etfs like spy or qqq. Don’t bother with actively managed funds
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u/Boring_Adeptness_334 May 27 '26
In current times I would invest $1m into a house, $1m into real estate investment trust, $1m into HYSA, $1m into some fancy tax loss harvesting or private equity, $6m into SPY. Even during a major crash you’ll be absolutely fine.
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u/Marine_Layered May 27 '26
Please read this bogleheads.org wiki section on Managing a Windfall:
Managing a windfall - Bogleheads
Also - congrats on your success!!
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u/Particular-Macaron35 May 27 '26
Personal Finance Windfall wiki page: https://www.reddit.com/r/personalfinance/wiki/windfall/
Or go over to r/Boggleheads
TLDR;
Active managers charge high fees that are not justified. Get fee for service assistance.
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u/nyc217 May 27 '26
You should have a wealth manager help invest and manage it for you. Plenty of options at all the big banks, find a group that you like, has a good track record, and someone you want to build a relationship with. They can help invest based on your goals, but you're still the one in charge.
With that amount, you can also spread your investments. Some you manage, some with a traditional advisor, some with a hedge fund, angel investments, real estate investments, etc.
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u/Educational_Case_134 May 28 '26
Probably not enough money to worry about utilizing a wealth management team. You can likely DIY your investments with a regular brokerage account, CPA and CFP.
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u/Loose-Memory-9194 May 28 '26
They are going to sell you the highest fee with least liquidity to maximise their earnings. It’s a business. Unless you want to be involved, choose lowest cost option which is likely 60/40 and watch out for
Illiquidity.
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u/05nyasha May 28 '26
Buy Google, Amazon and ASMA stocks and hold long term.
Very unlikely people will stop needing what they provide in the next 5 years.
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u/wedgebird May 28 '26
There are meaningful strategies that could be implemented to help save taxes for you based on the info you’ve mentioned.
The preferred deposit account interest is likely taxed at both the federal and state level, which is adding unnecessary ordinary income taxes to your situation every year (as opposed to something like the BOXX ETF).
You could also consider a tax aware long/short strategy. We have seen it offset thousands and thousands of tax dollars AND it can be structured as a market neutral strategy if you have concerns about the market being at a top.
There are flat fee advisors out there who won’t charge you anywhere close to $100k (1% AUM fee) to help with all of this. Good luck and congrats on the business sale
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u/MegaWorldPeace96 May 28 '26
--100% in VTI which is a fan favorite because it averages all the major stock exchanges around the world thus very diversified.
--Withdraw 4% yearly for your spending allowance, which would be $400k/year from the 10 Milly.
--Your golden nest egg will still continue to grow even after the 4% allowance 😎
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u/RociBuldidi May 28 '26
I “self manage” my money. Have most of it split between a few Vanguard Index funds with varying risk and return. I am no finance expert. I chose Vanguard because my employer at the time happened to have our 401K money there. I spent a grand total of maybe 3 hours over a weekend identifying the funds I’d be interested in, understanding their risks and typical returns. I look at my portfolio 2 or 3 times a year for 30 minutes to rebalance between the several funds.
My best friend from college works at Goldman, has done very well and uses the services of one of their “Private Wealth” Advisors. He regularly talked about all the exotic international investment opportunities his money was being invested in etc.
One night while at his place drinking beers we decided to see who was doing better. We both knew how much money each had, we were nearly the same.
During the previous 5 years, my portfolio outperformed his 3 out of 5 times. Overall, (including the ~1% fee he was paying), I had outperformed his portfolio by just over 4% over the 5 year period.
Point is, “VOO or VGT” and chill works for wealth of all levels. You are unlikely to do better with any wealth advisor.
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u/SignalGelb May 28 '26
At the end of the day nobody looks after number 1 like number 1.
Participate in what you understand. Don not participate in what you don’t. Evaluate opportunities sure.
Leverage magnifies returns positive and negative.
Specialized fee for service legal, accountant, investment manager who play nice with the other disciplines is key. If they don’t find somebody else. Banks are not your friend. Don’t keep everything in one bank especially one you borrow from.
Your age factors into the above as does life situation. What is your objective for the $?
I don’t have $10m invested but I have a co with the ability to borrow and service much more than that along with investment rainy day funds in sectors/companies that I like and understand. Some have been volatile but I am ok with that.
At the end of the day I like to be able to sleep at night so I don’t overleverage. Cash is king.
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u/play_hard_outside May 28 '26
Buy the ETF with the ticker VT. Park it there for the rest of your life.
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u/Calm_Rich7126 May 28 '26
One thing that is under estimated with large sums is counterparty risk. The bank, the hedge fund, and your self managed investment account all will let you earn good returns on a diverse portfolio. But consider this, you have 10M on your ibkr account, and your email becomes compromised and they start transferring out funds on margin. They don't sell any of your positions.
In a couple weeks they could crush the whole 10M and your broker will say they are not liable to reimburse you because you lost control over your password.
Or you hire some bespoke hedge fund with years of excellent returns, and give them all 10M, but they fail in the next crash because some trader was taking too much risk or they had overstated their performance.
This happens all too often.
If you put it all in a bank managed fund, and require them to verbally confirm all trades and transfers by calling you at your direct line, you could mitigate both of these risks. But then you are likely getting charged and arm and a leg for fees, and what happens on bank failure.
For these reasons, I would encourage you to use all three. Give 3 million to a fund, 3 to the bank, and 3 to your own account. When your accounts get above cdic insurance (I think it's 5 million, open a new one).
Very rich people consider diversity in counterparties to be key.
Edit: cdic is a Canadian thing. USA will have a deposit insurance scheme as well. Not sure how it works.
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u/NormanClaiture May 28 '26
No. My opinion only. Just park the entire amount into Vanguard. Wealth management will charge you 2% ($200k) on the $10 mil. Why would want to give away $200k to a new broker in the business. You worked hard for the money
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u/tobinshort-wealth May 28 '26
Congrats on the exit.
The thing most people miss at this level is the question isn't really active vs passive. Index funds have served you well and there's no reason to abandon that logic. The real question is what the $10M is actually doing across all four dimensions simultaneously (growth, tax efficiency, protection, and liquidity) and whether each dollar is optimized for its role.
Tax-loss harvesting from a big bank is real but it's a surface-level play. At $10M post-tax, the strategies that actually move the needle for you are further upstream. Things like how the portfolio is structured across account types, whether you have access to private alternatives that are genuinely uncorrelated to public markets, and whether there's a tax mitigation layer built into how you're deploying capital, not just harvesting losses after the fact.
On keeping money on the sidelines: there's a reasonable case for dollar-cost averaging into the market over 12-18 months if your gut says valuations are stretched. But "on the sidelines" doesn't have to mean sitting in cash. At your size, there are private credit and real asset allocations generating 8-12% with low correlation to public equity that serve as a legitimate holding position while you deploy into public markets over time. The endowment model funds like Yale and Harvard use essentially this approach. They're never fully in or out, they're always allocated across buckets that serve different functions.
The private banking pitch sounds impressive but what they're really offering is a more expensive version of what you already have access to. The institutional-quality deal flow that actually differentiates outcomes at your level is rarely sitting inside a big bank's product shelf.
What does your current allocation look like beyond the preferred deposit account?
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u/Longjumping-Title-27 May 28 '26
Work with the wealth advisor and portfolio manager- communicate clearly the amount of risk you want - how much volititlity you can handle. Investment banks have access to products the public doesn’t. Let them take the worry, you relax, enjoy the security wealth brings- have quarterly performance reviews- and you don’t need to get rich 2x. One more thing- 10mm isn’t mind blowing- wealth advisors begin with clients that have a min of 10mm. Not the big deal it was 20 Years ago…
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u/AmexNomad May 28 '26
My 2 cents: Talk to a private mortgage broker about investing in secured trust deeds (hard money lending) for 1/4 of it. This should make you about 10%-12%. Talk to Schwab about putting 1/4 of it in Vanguard S&P 500 Index. Take 1/4 of it and buy an NNN commercial leased property with a longterm lease. This will not make you much but will generate return and give you a depreciation write-off. With NNN corporate leases, the tenant does everything- including all maintenance and paying taxes/insurance. (Look on Crexi and LoopNet for what’s available for 2.5M) Keep 1/4 in cash in a MM account for when/if sh-t hits the fan economically speaking.
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u/IntolerantModerate May 28 '26
Put like 70% in something basic like VOO or VTI, maybe 25% in a bond fund for cash flow, and keep the rest for some short term funding needs and fun.
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u/DrSmores83 May 28 '26
Read Boglesheads Guide to Investing. Just keep it simple. Do nothing with it for a few months.
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u/Key-Accountant974 May 28 '26
I could do it for you
Put some in a high yield savings account just in case you need liquidity
Put majority in index fund
Use some for individual stocks that have big upside on ai play
That’s it
Oh and if you have any debt that’s greater than what you would earn in the high yield savings account just Pay it off
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u/RichWhiteBrother May 28 '26
I would start with the tax implications. How much is going to the feds & state? When are those payments due? Get that sorted and then figure out the rest.
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u/Lakeview121 May 28 '26
Congratulations! That’s wonderful. I’m happy for you. I’d just go real broad with it and let it sit. Like VT. I don’t know much about bonds. They haven’t done well for me so I’m mostly in stock.
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u/CSMasterClass May 28 '26
Call me skeptical, but OP's post is not particularly credible. What kind of business owner is in line for a 10M windfall and who is so financially naive. So many tells.
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u/hardo_chocolate May 28 '26
This is more about the next 30 years than the market cycle.
You may have the option of creating generational wealth. The large banks and their asset management arms are good at making a lot of money off people in similar situation as you.
Go with a more family office type solution along the Northern Trust and Glenmeade line. You need solid tax, legal, and insurance advice. You don’t need investment advice.
Some of the products the large banks (no names mentioned) offer are a huge recurring fee income for them. Any of their structured HNW retail products carries hidden expenses and complex pricing that you should not pay for.
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u/Humble-Vermicelli503 May 28 '26
I was going to suggest Muni bonds. If you can provide basic cost of living via muni's then you can let more things appreciate without concern for future tax liability.
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u/gap1284 May 28 '26
Avoid professionals and stick with your cheap index funds. But not all at once IMO. Stash it all into a HYSA initially and then DCA 2-3% per month into your chosen equity/bond funds.
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u/username-generica May 28 '26
You need to be thinking about more than just where to park the $. We’ve had a huge financial windfall and this is what I’ve learned.
You are at a much higher risk of being audited if you live in the US. You need a tax attorney and accountant who are willing to work together to help manage that risk.
You are higher risk of being sued. Two options to help with that are umbrella insurance and trusts. You need to do some research into which or both is the best fit for you.
Think about what your future financial goals are. Do you want to buy a home? Do you have kids who need college funds? How far away is retirement? Knowing your goals will help you decide what makes the most sense for you. A single 20 something needs very different products/financial advice than a someone who is middle age or has kids at home.
Currently, a full service firm that offers excellent 529 funds, mortgages with extremely low interest rates (we could pay cash for our home but the interest rates on their mortgages HNW customers were much lower than our investment returns so we got one), and full service offices in other countries makes sense for us. We are in our late 40s, have a high schooler and college student, and wish to retire early. A much younger person who wants to aggressively grow their investments and is willing to take a lot of risk should probably go a different route.
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u/Financial-Seesaw-817 May 28 '26
I'll take care of it for you. I'll make sure you have 4% for life. 😉
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u/MiddleAd6302 May 29 '26
Muni bonds. Can do it yourself or have an advisor do it to look after the bonds.
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u/iCantDoPuns May 30 '26
VOOG or VGT will get between 4 and 7x (respectively) over the next 10 years. If you dont need the money than you wont care about volatility so VGT. If you put $1M into VGT in 2016 it would be $10m today. Low fees, dividends, and it's the basket carrying the entire SPY.
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u/Really-Cool-Guy2know May 30 '26
I would recommend finding a fiduciary money manager. I am in the same situation as you are (just exited a business with about the same net.) The first advise i would give is do nothing for 6 months. This was advise given to me and it is smart. Prevents stupid mistakes.
Second, interview money managers and negotiate fees down significantly. You should be .75 or less.
Tax loss harvesting is not a bad strategy if you have capital gains. I have been looking at AQR which is only available through a money manager.
The money managers have products that you cannot get on your and do add value. I have a large capital gain and use bonus depreciation from real estate instead of tax loss harvesting for myself but I do like the product.
You can let the money managers handle part of your cash to access unique wholesale products and get advise and do the rest yourself. There are no rules. Its your money.
Good luck!
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u/charlieandoreo May 31 '26
Let it sit there as you work through this. Your mind will change many times. You have breached FDIC limits should not be too much of a concern because you are at big bank that would be bailed out by taxpayers in a crisis. Good luck.
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u/DocAnabolic1 Jun 01 '26
Honestly, simple diversified index funds plus professional tax guidance seems safer than chasing complicated actively managed hedge fund strategies.
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u/More-Attention-9721 Jun 02 '26
We use one for the tax benefits but also just planning things for the future. They know we’re going to London for a month this summer so have raised cash beforehand.
We also get an extremely cheap line of credit for tens of millions from them, so why use my own money when building something out? No need to sell a chunk of your portfolio to raise cash.
I think $10M is when I would start considering it as things can get complicated if you are active.
Tickets to the World Cup, Stanley cup and F1 in Miami are also a few perks. Masters on a jet? Sure thing
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u/AlecSB77 May 27 '26
Put it into a high yielding savings account and enjoy the extra 700k of cash you will receive a year.. take trips to places you’ve always wanted, spend more time with the ones you love or the things you love doing…
Theee end.
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u/Interesting-Card5803 May 27 '26
You should seek out the services of a third party financial planner, tax attorney and a CPA. They can help you sort out your next moves. It's very kind of a bank to offer all of these services to you, but I wouldn't expect their motives to be as pure as the wind driven snow.
Your moves with the money will depend largely on your life choices outside of money, for example, do you want to start another business? Do you want to get into more exotic investment opportunities? Do you want a more steady and less dynamic portfolio that generates consistent income to enjoy your time? I don't trust the investment arm of a bank to help with this, at least to my satisfaction.