$5m cash to play with

[Young buck]

I'd buy the Subway which runs parallel to Curtin University, it's a little cash Cow already.

I'd then purchase a series of glamour shots of Victoria Secrets Models and plaster them all around the Uni.

The rest would go into TD's, a property for myself and shares.

 

[Bill.L]

Hi all,

Dazz, you didn't say what you would do with another $5m. Throw it in the back pocket with the other loose change??

I'd buy a local dairy farm or 2, with about 50% lvr, employ a sharefarmer. Buy a few toys (excavator and dozer) in partnership with someone who uses them locally. Probably also buy a few more resi properties in a couple of states with 40-50% lvr. Drop another couple of hundred $k into the trading account, keep the rest in offset accounts .

bye

 

[Bon]

I'd go buy a PPOR in Manly for ~$2 million, then I would go train BJJ AM & PM, chill at the beach and cafes on the weekends.

I'd buy 5 * ~$350k properties outright yielding ~5% which would be around $2 million and $100k pa income to pay the bills with.

With the $1 million left over, I'd use it as my bankroll to bet on fights and could generate another $2-300k pa I'm sure.

Not the best way to make the money grow, but by the time I had $5 million cash I think it'd be time to enjoy life rather than continue to accumulating money.

 

[Ausprop]

Serious???

well depends on what you do with it. one nice house and it's gone - and then? or an ok house and an ok beach house, yet there is still no investment

stick the whole lot in the bank and you have a deflating asset giving you $300k taxable. may as well get a job and park the funds in a growth asset (if you can find such a thing)

now if you already owned a good house and a good beach house, then $5m is getting interesting. parked in comm property giving yield and growth then you are starting to look at retirement. IMO you need over $10m to retire comfortably

 

[HandyAndy888]

well depends on what you do with it. one nice house and it's gone - and then? or an ok house and an ok beach house, yet there is still no investment

stick the whole lot in the bank and you have a deflating asset giving you $300k taxable. may as well get a job and park the funds in a growth asset (if you can find such a thing)

now if you already owned a good house and a good beach house, then $5m is getting interesting. parked in comm property giving yield and growth then you are starting to look at retirement. IMO you need over $10m to retire comfortably

Why $10m for retirement??? What will you do with all that money?

I think you could easily retire comfortably on $2million. What will you be doing? Going on trips and watching TV, maybe gardening and some hobbies...each to their own I suppose....

 

[JamesGG]

now if you already owned a good house and a good beach house, then $5m is getting interesting.

Agreed. And, that was the idea of the original question; how would you invest the $5m which was left *after* buying the ppor and other toys. It seems that a lot of people included such things in their $5m though, so perhaps I need to edit the opening post to make that clearer and avoid confusion?

 

[INVSTOR]

Not quite; not yet, for me. But, I've been wondering lately; consider a multi-million-dollar cash injection. Tatts, inheritance, divorce proceeds, business sale. Whatever rocks your boat.

You then upgrade and / or pay out the PPOR, pick up the various toys and book the holidays that you may have had half an eye on previously, and you've got $5m left to play with.

What would you invest it in?

Cash, for interest?
Many, lower-valued residential properties?
Fewer, higher-valued resi properties?
Several smaller (retail?) commercial properties?
One or two larger (industrial?) commercial properties?
Shares, for expected growth?
Shares, for dividend yield?
An existing business or franchise?
A new business venture of your own design?
A mix of the above?

Something else entirely...?

Would you leverage further; to say a 50% LVR and have perhaps $10m to spend instead? Or, would you pay off all existing debts and then use only cash for future purchases as well?

And why? I've deliberately not attached a poll as the statistics are useless - I'm more interested in a collection of ideas than than a collection of numbers

Then, with all of the above in mind... does this match how you invest today? And if not, why not?

I would pay off the $1.2m resi mortgages to own 6 resi properties outright. Then I would purchase one or two larger (industrial?) commercial properties.

I think it would be risky for us to purchase commercial properties at present as our income is low and if we had a commercial property vacancy we wouldn't cope. I like to be able to sleep at night. I grew up with my parents part owning commercial properties and one would often be vacant and my mum would be stressed about the lack of income. that's why I would rather not leverage. The commercail properties weren't discussed much at all apart from the negative financial impact from vacancy. It has taken me a while to see them in a more positive light, thanks to some commercial property posters on this forum. I have also realised that they could have managed the properties better to reduce vacancy.

 

[Ajax]

I'd buy 4 million Perseus Mining shares (PRU) at up to $1.85/share

....(using a margin loan at 55% lvr and keeping remaining $ as a buffer)...

then wait patiently whilst the company lists on the Toronto Stock exchange (probably in the next few days) and then develops its 8 million ounces of gold deposits in Ghana and Cote d'Ivoire (or is acquired by a major North American Gold mining company for around $3.50/share).

Sheesh, that strategy is not looking too flash. If I'd bought 4 million Perseus Mining at $1.85 on 28th January 2010, they would have fallen to $1.575 by close on 29th January 2010.

If I had 4 million shares I'd be down 4 million shares x ($0.275)= ($1.1m)

Have attached a chart here on my take on where Perseus Mining is going. I still think its in an up trend (the trend is being seriously tested at the moment).

 

[Ausprop]

Why $10m for retirement??? What will you do with all that money?

I think you could easily retire comfortably on $2million. What will you be doing? Going on trips and watching TV, maybe gardening and some hobbies...each to their own I suppose....

ok well I have been on a tangent as I thoiught you had to pay for your own houses out of that money. so yeh from $10m i would allocate $5m to a PPOR and the beach pad leaving $5m.

so the $5m left... $500k cash with interest reinvested, $500k gold, $3.3m comm property at 40% LVR giving net yield of say $200k to live on and then $2m to do passive developments with. probbaly build a new house every 2 or 3 years to roll from one to the next tax free. The dev funds are 'at risk' so if it goes it's no biggy

I am only 40 so would want to do more than watch TV and garden... cruises, flash cars, restaurants. no point living if you aren't living!

 

[Ausprop]

Sheesh, that strategy is not looking too flash. If I'd bought 4 million Perseus Mining at $1.85 on 28th January 2010, they would have fallen to $1.575 by close on 29th January 2010.

If I had 4 million shares I'd be down 4 million shares x ($0.275)= ($1.1m)

Have attached a chart here on my take on where Perseus Mining is going. I still think its in an up trend (the trend is being seriously tested at the moment).

by all means have a flutter but gees!

 

[Hooray]

Why $10m for retirement??? What will you do with all that money?

I think you could easily retire comfortably on $2million. What will you be doing? Going on trips and watching TV, maybe gardening and some hobbies...each to their own I suppose....

A decent PPOR would be 2m. Overseas trips (family of 4, say 20k a pop) a couple of times a year. Domestic trips (5k a pop) a couple of times a year. Good lifestyle. Private school for the kids. Then it has to last a lifetime, which might be until you're 90. 10m would barely cover it.

 

[Morgs]

$5m cash to play with.... I'd might take a week off work to think about it

 

[HandyAndy888]

A decent PPOR would be 2m. Overseas trips (family of 4, say 20k a pop) a couple of times a year. Domestic trips (5k a pop) a couple of times a year. Good lifestyle. Private school for the kids. Then it has to last a lifetime, which might be until you're 90. 10m would barely cover it.

You could easily do that on 6% interest....a 2 mil PPOR IMO, is huge...

 

[ianvestor]

a 2 mil PPOR IMO, is huge...

IMO it's puny, and more importantly (for me) if it's anywhere decent, it's on a puny block of land.

I agree with Ausprop, $5m wouldn't go far at all...

 

[Hooray]

You could easily do that on 6% interest

If you 'eat' all of your income, your money would never last a lifetime. You'll run out of money well before you die.

....a 2 mil PPOR IMO, is huge...

In your opinion, yes. In MY opinion, 2m would be a nice house. Not too lavish, nor huge. Nice.

I can certainly understand how 5m wouldn't be enough. If you can't, well, then you don't need that much.

 

[Andrew_A]

I see real value in holding a PPOR debt free in as safe a structure as you can manage, sort of a final wall against everything that might go wrong.

$1M for a PPOR already won't stretch very far in some Brisbane suburbs, all depends on what your wants and needs are though. It's actually a useful little bench mark I use, what you can get for $1M.

 

[ianvestor]

It's actually a useful little bench mark I use, what you can get for $1M.

500,000 cheeseburgers. I wonder if McDonalds would give you a bulk discount.

 

[Graemsay]

There are three strategies that I'd consider.

1. The Safe Option

Being conservative, I think that it would be possible to generate an index-linked (i.e. growing with inflation) income at (say) 3% to 5%. That's what a lot of IPs are yielding, as are annuities. (For a 60 year old male in the UK.)

So maybe buy a nice house outright (say $1 to $2 million), and spread the rest across asset classes (shares, IPs, bonds) to give around $100K per annum as an income.

2. The Risky Option

Start a company. $5 million of funding could go a fair way with a decent idea and good execution. There are some interesting angles that I'd like to explore, and this would make a nice first round of funding.

Why risky? 90% of companies fail within three years. There's a decent chance that it'd all go badly wrong.

3. The Once in a Lifetime Option

Why not blow the money?

For me, it would be putting a privateer entry together for the Vendée Globe. I'm sure other posters could come up with similar big dreams that they might not achieve any other way.

Realistically, I'd probably end up with some mix of the three. Buy a nice house to live in, try to spin up a business venture, and maybe blow a chunk of it on something that's completely pointless but fun.

 

[Lily House]

I wonder if people would spend/invest it differently depending on how they obtained the money.

If, for example, I won the $5mil in Tatts (verses having earned it) I think I would be more inclined to give more of it away - sharing my good luck and amazing windfall.

$3mil invested in conservative quality assets (shares and property) would provide an annual income that would be more than adequate for me and my family, and would hold its value over time.

Another $1million invested would fund top quality private school educations for my daughters - and would then give them (at age 25ish) around $500,000 (in today's dollars) a great head start in life (not that they would know it was coming beforehand).

That would leave around $1million to play fairy-godmother with - what fun.

To be suddenly $5million wealthier (with a PPOR and Holiday house on top) would be a very very nice problem to have.


Caroline

 

[jaycee]

I think it would Caroline (the way you coe across your money).

If nothng else, numerous previous winners sees to have shown this is true.

But also, I'm 38. If I came across it I'd try to make ore of it, but I'd kow that I'm 38 yrs old and was plodding along (not as happy as I could be) tryign to build something.. that hasnt changed I know can still keep doing that..

Impuslive genoristy or splurging would be my problem, I like words like designer and chronograph and mercedes etc