this post was submitted on 19 Aug 2023
179 points (95.9% liked)
Asklemmy
43980 readers
645 users here now
A loosely moderated place to ask open-ended questions
Search asklemmy ๐
If your post meets the following criteria, it's welcome here!
- Open-ended question
- Not offensive: at this point, we do not have the bandwidth to moderate overtly political discussions. Assume best intent and be excellent to each other.
- Not regarding using or support for Lemmy: context, see the list of support communities and tools for finding communities below
- Not ad nauseam inducing: please make sure it is a question that would be new to most members
- An actual topic of discussion
Looking for support?
Looking for a community?
- Lemmyverse: community search
- sub.rehab: maps old subreddits to fediverse options, marks official as such
- [email protected]: a community for finding communities
~Icon~ ~by~ ~@Double_[email protected]~
founded 5 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
The trick is to hire SEVERAL groups of people (read: wealth management advisor teams from major financial institutions) and let them each manage a $25M+ chunk of it. You'd want to have 2-3 different groups, and then a simple portfolio you manage yourself that trades in market-tracking ETFs and highly rated government bonds. That gives you the combination of excellent security with minimal personal maintenance. And you get all the perks of being a wealth management client from several large institutions like below-market loan rates and unique investment opportunities. Also, the really big institutions like JP Morgan and Goldman Sachs have lots of resources available for financial education for their wealth management clients.
That's the best advice for someone who doesn't really know what they're doing. Never give one person the keys to your entire net worth, THAT'S how wealthy people end up broke.
In this hypothetical, even if JP Morgan or Goldman Sachs collapsed or embezzled your funds (which is INCREDIBLY unlikely), you'd still have more than enough wealth to live comfortably for several lifetimes in your other accounts. Just make sure your accountant knows where everything is, because you don't want to go to prison for tax evasion.
This is absolutely the way to go, but be aware that it can lead to concentration/sectoral risk when managers aren't aware of positions in the other portfolios. For example, Goldman could invest heavily in tech or pharma or whatever, not realising that JPM also have a big investment in that area.
Investors shouldn't be picking winners. That's already too much risk and too many fees. Total market index funds and total bond indexes are what you should be investing in.
Great add-on.