30 Year Old with $1mill: what to do!
- Thread starter Property Meister
- Start date
He should go check out http://www.perpetual.com.au/advice.aspx I highly recommend them. They will sort you out a nice diversified portfolio and manage everything. At a cost ive course 
I would put 150k straight into super. I know this sounds boring but it would act as a safety net for him if his investments go sour.
I would put 150k straight into super. I know this sounds boring but it would act as a safety net for him if his investments go sour.
We don't move forward unless the downpayment covers all costs, and have zero overheads (unless you count your couple hundred bucks yellow pages/website). Worst case scanario we lose time. Best case scenario all additional payments are profit. Not worried at all, I'm not CF dependant.
If he wants to provide private mortgages to us, we will give him 8%.
Heck, i'll give him 10% if i can play in the US!!
I personally think thats not a very good idea (no offence intended in anyway)
for someone like him starting a business does not equal good profits let alone any profits, even buying an existing business is no guarantee of any success just like
http://www.somersoft.com/forums/showthread.php?t=71795
Tell him to hold his money and finalize all his tax dealings before blowing that money. He sold his business for $400k, how much did it cost to start? If nothing, then the good will is $400k so he would pay 50% tax on that.
Same thing with that, he would have to pay tax so he wouldn't' be left with 200k.
Sorry but I find it hard to believe someone would pay $400k for a consulting business that nets around 50-60k/year. Most retail/consulting businesses go for 3x earnings, with 4x max. Which puts his business value at around $165k.
Furthermore, no one stupid enough would pay that much for a consultancy business. There is no direct gains from buying one, it's not like a coffee shop or supermarket whereby securing a good location is valuable. A consultancy business is as good as it's owners so I don't think this story is true, given the fact that multiple "good" things happened to this guy in such a short period of time, e.g. "his mum wins the lotto, some lousy business buyer overpays 2.5x for his business, his shares went up more than 10x."
I find that to be the biggest BS to be honest. He would be even better than Warren Buffet to have created 1000% returns in such a short period of time. If he is this good, he could be doing this full time, e.g. stock trader, but as your first post indicates, he is in the consultancy business. You can't get lucky in the stock market... not for a sustained period, most people sell out during good times, or bad times. The stock market crash of 2008 would of wiped most of his stocks!
If all of this is indeed true, which I doubt then he has enough if he lives offshore. Tell him to move to a foreign country, put the savings into a high yielding interest bank acct, then chill.
I was starting to think everyone on SS was even better than Warren Buffet for not raising an eyebrow on this novice's return
.Sounds like a website business.
Nah yellow pages don't count, you don't lose $30k a week just from that.
And yes the valuation on the consultancy business does not add up. $40k net profit for $400k selling price? Especially when consultancy is as much driven by the person as it is by the product. But anyway.
I find that to be the biggest BS to be honest. He would be even better than Warren Buffet to have created 1000% returns in such a short period of time. If he is this good, he could be doing this full time, e.g. stock trader, but as your first post indicates, he is in the consultancy business. You can't get lucky in the stock market... not for a sustained period, most people sell out during good times, or bad times. The stock market crash of 2008 would of wiped most of his stocks!
If all of this is indeed true, which I doubt then he has enough if he lives offshore. Tell him to move to a foreign country, put the savings into a high yielding interest bank acct, then chill.
sounds like a case of tall poppy syndrome, at no stage did I (nor does he) think its because of his skill, he knows he is lucky, and is aware of it.
calculating % ROIs based on a few lucky events is just plain silly.
I know of a guy who bought $60k of shares, sold out of it a few months later for $300k, 2 years later the shares were worth $4 million or something, he was lucky to get 5x return but unlucky not to hold on, was it skill: no
Architectural images. You give us your plans/schedule of finishes, we give you photo like images of what it will look like. Useful for developers getting through council, and pre sales.
It's good fun, but a pain in the bum because of the language barrier with the eastern europeans/south americans
Sounds like an interesting little business you've got there OA.
Okay, I get the 'architect' bit then. But where does does the 'ocean' part come in? You're not 'all at sea' on account of the language frustrations, are you?
Why the choice of Sth Americans or Eastern Europeans, I'm wondering, instead of say Indians who have perfectly good English skills?
You seem to know a lot of these people, guess they are common in your part of town.
Just analying what you wrote. You said your friend had $1mill in the bank, and I say this is not possible because that's assuming he paid no tax on his business sale/share sales [warning 1], these very simple two steps has already meant he does not have $1mill in bank. Then you tell us his parents won the lotto [warning 2], his stocks get 1000x returns even though he has no clue about investing [warning 3], and then he sells his business for a record sum [warning 4], in which you tell us he is not very "into", meaning the business would have not likely "excelled" or had great branding. One would think why someone would waste so much money buying a business from an owner that had no love for his business because it would most likely indicate a business with poor growth. If you think about it logically, would you be willing to overspend money buying a business from a guy who hates it?
Then you go on about saying how you know several people who turn $30-60k into $300-$4mill stocks [ warning 5]. Firstly for a stock to go from $60k to $300k in a few months, that's a 500% return. You said if he had held onto that stock for a further two years it would of been $4mill. That implies a 6,666% return. Tell me which stocks on the ASX that has grown 6,666% in a 2 year period. Especially in light of these articles...
ASX 200 back to JANUARY 2006 Levels
I know several friends who have amassed 1+ mill fortunes before they're 30. That's not hard todo with a good job or small business. However, I don't know any whose parents won a lotto and was able to generate 1000% stock returns within a short period of time with average stockmarket knowledge, who hates running his business but was able to sell it for vastly inflated prices.
Seems like your original article was just to show affluence, because seriously why bother stating a thread stating that you know a 30 year with 1 million dollars? You just need to ask what would be the best plan of approach to invest $1mill dollars for a young individual.
I've read some of your other posts where you also state you know some close friends who run multi-million dollar cafes. Seems like every pal you know is a millionaire right?
Having only just caught up with this thread my thoughts are as follows:
Don't selling anything at the moment
park all the cash in the bank until he works out what he wants to do (easily earn 6.5% per annum)
invest in his own education about - learn about his options, seek independant advice
Bottom line this person needs to invest in his own education before doing anything.
Too many people get access to a large sum of money, then they think the money comes with an automatic investment mind set and they make stupid choices because of their "perceived" knowledge and blow it all.
This $1M is a massive opportunity.
Personally, I'd be investing it in cashflow assets, that would generate income from a number of sources, and allow me to build/start/buy into a business to generate additional income.
Sure I'd take time off to enjoy myself, but i wouldn't buy so called "assets" that would keep me chained to a job just to meet the repayments and I wouldn't buy a job with it either. What a waste of an opportunity.
and Pfffff superannuation - what a joke - lock the money up for 30 years before you could access it and keep working on the treadmill until then...garbage. The financial planning industy has conditioned too many people to focus on being employees, self-employed without giving any real advice.
Sure if this theoretical person did not want to learn what he should do with it, then the super option is not a bad idea, but there are so many more opportunities than that.
Our modern world has trained too many people to be just average, to focus on a career for their life then aim to retire at 55/60/65.
More to life than that - only get one chance to enjoy it so why not!
Don't selling anything at the moment
park all the cash in the bank until he works out what he wants to do (easily earn 6.5% per annum)
invest in his own education about - learn about his options, seek independant advice
Bottom line this person needs to invest in his own education before doing anything.
Too many people get access to a large sum of money, then they think the money comes with an automatic investment mind set and they make stupid choices because of their "perceived" knowledge and blow it all.
This $1M is a massive opportunity.
Personally, I'd be investing it in cashflow assets, that would generate income from a number of sources, and allow me to build/start/buy into a business to generate additional income.
Sure I'd take time off to enjoy myself, but i wouldn't buy so called "assets" that would keep me chained to a job just to meet the repayments and I wouldn't buy a job with it either. What a waste of an opportunity.
and Pfffff superannuation - what a joke - lock the money up for 30 years before you could access it and keep working on the treadmill until then...garbage. The financial planning industy has conditioned too many people to focus on being employees, self-employed without giving any real advice.
Sure if this theoretical person did not want to learn what he should do with it, then the super option is not a bad idea, but there are so many more opportunities than that.
Our modern world has trained too many people to be just average, to focus on a career for their life then aim to retire at 55/60/65.
More to life than that - only get one chance to enjoy it so why not!
You seem to know a lot of these people, guess they are common in your part of town.
Just analying what you wrote. You said your friend had $1mill in the bank, and I say this is not possible because that's assuming he paid no tax on his business sale/share sales [warning 1], these very simple two steps has already meant he does not have $1mill in bank. Then you tell us his parents won the lotto [warning 2], his stocks get 1000x returns even though he has no clue about investing [warning 3], and then he sells his business for a record sum [warning 4], in which you tell us he is not very "into", meaning the business would have not likely "excelled" or had great branding. One would think why someone would waste so much money buying a business from an owner that had no love for his business because it would most likely indicate a business with poor growth. If you think about it logically, would you be willing to overspend money buying a business from a guy who hates it?
Then you go on about saying how you know several people who turn $30-60k into $300-$4mill stocks [ warning 5]. Firstly for a stock to go from $60k to $300k in a few months, that's a 500% return. You said if he had held onto that stock for a further two years it would of been $4mill. That implies a 6,666% return. Tell me which stocks on the ASX that has grown 6,666% in a 2 year period. Especially in light of these articles...
ASX 200 back to JANUARY 2006 Levels
I know several friends who have amassed 1+ mill fortunes before they're 30. That's not hard todo with a good job or small business. However, I don't know any whose parents won a lotto and was able to generate 1000% stock returns within a short period of time with average stockmarket knowledge, who hates running his business but was able to sell it for vastly inflated prices.
Seems like your original article was just to show affluence, because seriously why bother stating a thread stating that you know a 30 year with 1 million dollars? You just need to ask what would be the best plan of approach to invest $1mill dollars for a young individual.
I've read some of your other posts where you also state you know some close friends who run multi-million dollar cafes. Seems like every pal you know is a millionaire right?
yes, I know a lot of people who own businesses, so????
judging by your post you seem to feel inadequate for some reason, would you like me to introduce you to some people that own $1m+ businesses to eliminate your insecurities. Frankly Id rather own one rather then know people that have them, but I guess it depends on where your priorities lie,
Its also quite obvious you have very little knowledge of the sharemarket, shares can go up by 1000% of percent over a short period of time, and we're not even talking about options as well. And yes, if you must know the share in question was FMG, those approximate figures were brought up because you started crazily calculating % returns on an investment which succeeded based on pure luck. For the record, I purchased some shares at 11c a few years ago, they are now trading at 1.1c, so thats a massive 90% loss!!!!!!! OMFG. !!!!!!! OMG, Im the crappest share investor in the world
Would you like to extrapolate that as well??? that means that if I was in my friends situation, I am going to lose $900k !!! OMFG, lucky its him with the $$$$ and not me.
And I love it how based on a few numbers that ive posted, you go analysing this guys businesses, sounds like you know more about the business then he does. Maybe he does have a tax bill, or maybe he isnt aware of his tax bill. If you want to extrapolate a bunch of numbers for an attack on your insecurities, thats your perogative, however, he has asked me a question, and Im curious as to what options are available.
EDIT: Did you know that I know some geeky guy with thick glasses, who owns a billion $ business. I think his name is Bill...not sure of his surname, but it starts with G-A-T-E-? and I can't remember the last letter, does something with computers, maybe you can tell me, and extrapolate his figures