Safe investment portfolio for $2.5 million inheritance

Safe investment portfolio for $2.5 million inheritance

Investor · Member since 2019 · 11 posts · 6 votes

I made a post about a year ago asking for advice on investing some inheritance money. My grandpa's estate turned out to be incredibly complex and still hasn't been distributed, but due to some other deaths in the family it looks like my share is going to be closer to $2.5 million (500k of which is ownership of a commercial bank building). I feel the investment climate has changed radically since my last post and wanted to get some advice on the safest places (diversification, I believe, is key) to park the remaining cash that would generate enough passive income to semi-retire (these recent deaths have left me emotionally and physically exhausted and I feel I need a year or two to recover on a beach somewhere). My rough math says that with smart investments, I should be able to get between $150k and $200k in passive income, which sounds very comfortable.

With all this government money printing, I feel like inflation is about to be a huge deal and that I should convert away from fiat currency ASAP. I'm currently thinking of the following breakdown:
600k in Fundrise (seems safe and low effort)
500k in a triple net commercial property in a growing neighborhood in Arizona currently housing a BMO bank
500k in a multiunit apartment complex deal with a friend and possibly including my brother who is also getting $2.5M
300k in one or more local single family homes, Airbnb or long term rental (I think my current market has a lot of room for growth)
200k in medium risk CrowdStreet investments
200k in gold
100k in cryptocurrencies
50k for higher risk investments
50k in cash

I feel like stocks are way overpriced at the moment, and don't feel attracted to bonds (though to be honest, I haven't done a lot of research on bonds). I've been investing in Fundrise for over a year now and am pretty impressed. I haven't tried CrowdStreet but it appears to offer some higher risk/higher reward options than Fundrise. 

I'm torn between wanting to be an active investor in my current area with my own properties vs letting other people manage my money. I have a local friend who already hosts Airbnbs that would be willing to add a few more to his portfolio for some commission, but that model also seems a little risky at present.

I know gold and Bitcoin don't provide any passive income, but I think they could be a good hedge against inflation. 

Anything I'm missing as a must? How might you rebalance this portfolio?

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Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
6y

You gotta be kidding me. You were lucky enough to inherit $2.5 million because you came out of the right cloaca, and now you're asking strangers on Bigger Pockets for investment advice. Hire a fee-based financial advisor. Don't be a total fool.

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  • Investor · Member since 2019 · 11 posts · 6 votes
    6y
    Originally posted by @Alice Huang:

    @Everett E.

    Do you have a solid CPA who’s investment savvy yet? The only “fee-based financial advisors” I would hire, suggested by Jim, is a savvy CPA who can help you plan your future and taxes.

    Having worked for “financial advisors” during my college years, stay away from them! Majority of them just “invest” in whatever fetches them the highest fees.

    Also for everyone else, why not ask the BP forum? We are a group of savvy investors right? Unlike those self-proclaimed financial advisors who are actually employees...

     Thank you for the informative response and addressing the haters.

  • Investor · Member since 2019 · 11 posts · 6 votes
    6y
    Originally posted by @David S.:
    Originally posted by @Craig Janet:

    How much do you need to retire comfortably? How much risk are you willing to take. 2.5Mil in a CD could get you $75K per year for doing absolutely nothing. Add one or two SFHs with a good property manager and your easily over $100K per year with very little risk and no work. If it were me I would do this:

    1. 1 Million Cash/CD- $30K per year

    2. 500K in SFHs- $50K

    3. 500K- Dividend Stocks- $20K

    4. 500K Buy House, Car, Boat, etc. Cash

    That would give you $120k per year with no bills and you can blow every penny of it because you're still worth 2.5Mil and growing. That's my two cents but I pretty conservative and would be happy living a modest lifestyle.

    Based on the math here, I wouldn't take this advice. ;)

     Thanks for double checking that.

  • Investor · Member since 2019 · 11 posts · 6 votes
    6y
    Originally posted by @Michael Swan:

    Swanny says there will be some great deals a year from now or early in 2022.

    “Whatever the mind can conceive and believe it will achieve!!!“ Napolean Hill

    Swanny

    What's your reasoning for predicting deals a year from now? Mortgages failing due to COVID?

  • Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
    6y

    You can only take Forbearance so long and we still have sky high unemployment.  Many people will need to give their apartment complexes back to the bank or sell to someone like me at a huge discount!!


    Swanny

  • Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    6y

    @Everett E. with that capital deployment potential and the assumption that your getting by just fine without it and don't need the $ to live, I would suggest a different structure plan of reviewing it in TIME deployment vs USE deployment. 

    This is to say, $ you can put to work today, $ put to work in the next 6-12 months, and $ put to work 12+months. 

    This is due to fact we are in a very fluid economic situation right now, uniquely fluid situation making predictability very difficult as we do not have historic data to accurately weigh from. The 1 certainty is much will be changing and evolving and doing so at a rapid pace, especially November. When viewing it in a time deployment manner, I believe it best helps to peg the top 3 deployments for each, and prepare to move rapidly when the opportunities appear as time will be of the essence. 

    I would also keep an eye& ear out for the emerging innovators, every significant economic shift and calamity breeds innovators and those innovators require seed capital, think Facebook, Google, Netflix and so on, those early $ investors made multipliers on their capital that makes any other investment pale in comparison. Their will also be innovators in REI as we are in a tough situation, innovation blooms from adversity.

  • Chandler, AZ · Member since 2017 · 174 posts · 269 votes
    6y

    Jumping and (semi) hijacking this thread :)  How do you all feel about (with respect to safety) the crowd source investments such as Patch of Land, Fundrise, etc?  Returns are nice, and the programs seem to have solid safety mechanisms in place.  Most actually protect the crowd investors before they protect themselves.

    @Daniel McNulty I'm not currently in Fundrise as I thought they were not the best choice.  But I'd love to hear some of your suggestions for better places to invest.  :)

  • Investor · Member since 2019 · 11 posts · 6 votes
    6y
    Originally posted by @Daniel McNulty:

    @Everett E.

    There are many better RE funds available than FundRise.

    They are an average operator and are having liquidity problems. You can do better than that.

    Other than that, not a half bad plan.

    Good luck!

    Any you would recommend?

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