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$1 Million

Discussion in 'General Entrepreneur Discussion' started by ErikV10, Nov 20, 2007.

  1. ErikV10
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    ErikV10 New Contributor

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    Let's say you've got $1 million to invest any way you want.

    The GOAL is to make as much money from it as possible, but not lose it.

    Putting it in a bank at a 5% interest rate is only about $50K/year.

    On the other hand, I heard people say giving it to financial adviser will average your earning 15%+. Is that true?

    What would you do? :thumbsup:
     
  2. CarrieW
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    CarrieW Gold Contributor Read Millionaire Fastlane Speedway Pass

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    ID DO EVERYTHING LOL!!!

    seriously tho i would probably do a little in a lot...

    id definatley fund a nice sized forex account for 50K and trade and also stock trading account too 5-10k to play...

    id buy my yacht and create the business in it i want.(if you want details on this id be happy to share lol)

    id buy a variety of real estate.

    id search for really fabulous business plans and ideas and fund them....

    i have an invention id like to take off the ground.

    omg what i could do with a million bucks!
     
  3. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    The answer to this is going to depend on a lot of things, and will likely be different for different people.

    Here are some questions to ask yourself:

    1) What is your risk tolerance?

    You say, "The GOAL is to make as much money from it as possible, but not lose it." Does this mean that you would like to have 0% chance of losing the entire $1M? Or 0% chance of losing any of it? Or 20% chance of losing 50% of it? Or 10% chance of losing all of it and 80% chance of losing 20% of it? Or something else?

    Until you understand what your risk tolerance is, you can't figure out what investments you'd have open to you.

    2) What types of investing meet your risk tolerance?

    Once you understand your risk tolerance, you can begin to understand what your options are with respect to investments. For example, if you decide that you want no chance of losing any of your money, your best option will likely be a Certificate of Deposit, or something similar. If you're 100% comfortable with losing all of it, but want to try to make a lot of money very quickly, you could find a roulette table and put it all on the number 7. Most likely, your risk tolerance falls somewhere in the middle, and you'll have to evaluate which investments meet that risk tolerance.

    There may also be various business models within each potential investment that have different risk profiles. For example, both SteveO and Russ invest in real estate, but because they have different business models for their investments, I'm guessing one of them has a higher risk of losing capital than the other. I have no idea who has the higher risk of losing capital (and I'm not saying either has much of a risk whatsoever), but since I'm guessing they've both done serious analysis of their models, they are well aware of their individual risks, and are comfortable with it based on their risk tolerance. Keep in mind that the one with higher risk probably also has the higher potential for bigger payoffs.

    3) What types of investing are you good at?

    Once you understand your possible range of investments that meet your risk tolerance, you will have to evaluate your ability to successfully execute those investment strategies. In general, you should pursue whichever strategies you are most likely to successfully execute. For example, if you know real estate really well, you probably shouldn't put all the money in the stock market. Just because investing in one thing may be lower risk (in general) or higher reward (in general), it doesn't mean that it is for you. For example, there are some really good investment models that I would never pursue, as they just don't fit my personality or my skill set.
     
  4. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I'm not sure $1M would allow you to do all those things...in fact, I have a feeling most yachts start at a bit more than that... :smxB:
     
  5. CarrieW
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    CarrieW Gold Contributor Read Millionaire Fastlane Speedway Pass

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    yes they do but not the one i want! its a fixer upper! and i would get funding somehow on the renovation and business kick off...

    he never said it was the only money that we could use lol...
     
  6. CarrieW
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    CarrieW Gold Contributor Read Millionaire Fastlane Speedway Pass

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  7. JesseO
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    JesseO Contributor

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    Very easy for me. With $1 mil I would either buy a $2-$4 mil property and make lots of money, or invest in a REIT of sorts and make roughly the same returns. I don't understand or trust the stock market, so real estate is my safety net (which would make wayyyyy more than 15% annually).
     
  8. kimberland
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    kimberland Bronze Contributor

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    Well, I only have half of that with my financial advisor
    and he gets me an average return of 12% (after fees).

    'Course my advisor isn't just any ol' advisor
    (took a lot of research to find him)
    and it is not exactly hands off.
    I can't just hand over cash and forget about it
    (he's an employee, albeit a highly skilled employee).

    But unless you won the lottery,
    this is just pie in the sky.
    If your route to wealth works
    (and a million would say that it was working),
    then it makes sense to continue on it.
     
  9. MCD
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    MCD New Contributor Read Millionaire Fastlane

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    Could you please elaborate on how your yacht is going to help you create a business.
     
  10. Sparlin
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    Sparlin Bronze Contributor Read Millionaire Fastlane

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    Hi MCD, this thread is 4 years old. It's possible Carrie will respond, but I just wanted to draw that to your attention. I made the same rookie mistake when I first joined :)
     

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