NEED HELP: Selling My Business and Investing $2M Profit

[MscO]

Hello,

I would like to ask for some advice regarding investing profits from a business exit.

I am 25 years old from Eastern Europe and I am about to sell my business for around $2M (applied lessons from both books, thanks MJ!). I do not plan any major expenses in the upcoming years, so I would like to invest pretty much all of it. I have read both The Millionaire Fastlane and UNSCRIPTED so I do have a rough idea about creating the “unscripted money system”, however, I am a complete newbie in investing.

The thing is that I still have to run my business and I spend most of my time working so I do not have the time to research and learn about investing. As of now, most of my business profits are just sitting in my checking account, which really hurts to even think of the lost interest I am not getting. I would like to change that and find a solution I could implement right away before I get more time to learn more.

The biggest issue when researching a simple investing strategy is that all of these strategies are aimed at 40+ years of investing for retirement (Slowlaner strategy). Obviously, I do not want to do that. Since I live in Eastern Europe, my living expenses are around $1500 per month, so I should be able to retire already.

Most of the strategies are about investing in index funds, however, since I live in Europe, I can invest only in ETFs (and stocks). I have an account in Degiro so I am able to access a wide range of products. As I mentioned before, I am looking for a very simple strategy that I could implement right away. Based on my understanding, going for 70% Equity / 30% Bond ETF investing would be a viable strategy. The majority of the Equity investment would go in an S&P500 Index fund.

On the other hand, such a strategy seems to be better for long-term investing and not creating a proper monthly “paycheck pot” since it can be quite volatile and I will need the income regularly to cover my expenses.

With that being said, I would truly appreciate if you could share your experience:
1) I am looking for a simple strategy I could implement without doing an extensive research
2) 3-4% per year would be more than enough to cover my expenses

I was also wondering, once I get the time to really dig into this and research properly, what kind of resources can you recommend to learn about investing?

Thank you very much!

Take care,
M.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Sirrom]

Wow man! Congratulations on reaching such a milestone! As i do not have sufficient knowledge i can’t help you. Just wanted to say you rock.

 

[ExaltedLife]

Hello,

I would like to ask for some advice regarding investing profits from a business exit.

I am 25 years old from Eastern Europe and I am about to sell my business for around $2M (applied lessons from both books, thanks MJ!). I do not plan any major expenses in the upcoming years, so I would like to invest pretty much all of it. I have read both The Millionaire Fastlane and UNSCRIPTED so I do have a rough idea about creating the “unscripted money system”, however, I am a complete newbie in investing.

The thing is that I still have to run my business and I spend most of my time working so I do not have the time to research and learn about investing. As of now, most of my business profits are just sitting in my checking account, which really hurts to even think of the lost interest I am not getting. I would like to change that and find a solution I could implement right away before I get more time to learn more.

The biggest issue when researching a simple investing strategy is that all of these strategies are aimed at 40+ years of investing for retirement (Slowlaner strategy). Obviously, I do not want to do that. Since I live in Eastern Europe, my living expenses are around $1500 per month, so I should be able to retire already.

Most of the strategies are about investing in index funds, however, since I live in Europe, I can invest only in ETFs (and stocks). I have an account in Degiro so I am able to access a wide range of products. As I mentioned before, I am looking for a very simple strategy that I could implement right away. Based on my understanding, going for 70% Equity / 30% Bond ETF investing would be a viable strategy. The majority of the Equity investment would go in an S&P500 Index fund.

On the other hand, such a strategy seems to be better for long-term investing and not creating a proper monthly “paycheck pot” since it can be quite volatile and I will need the income regularly to cover my expenses.

With that being said, I would truly appreciate if you could share your experience:
1) I am looking for a simple strategy I could implement without doing an extensive research
2) 3-4% per year would be more than enough to cover my expenses

I was also wondering, once I get the time to really dig into this and research properly, what kind of resources can you recommend to learn about investing?

Thank you very much!

Take care,
M.

Whats wrong with the "investing for retirement" approach? Its not a good idea for making a million dollars but you're past that point, no?

3-4% interest is easy to find if you're investing over a million dollars.

 

[MscO]

Wow man! Congratulations on reaching such a milestone! As i do not have sufficient knowledge i can’t help you. Just wanted to say you rock.

Thank man! I appreciate it

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[MscO]

Whats wrong with the "investing for retirement" approach? Its not a good idea for making a million dollars but you're past that point, no?

3-4% interest is easy to find if you're investing over a million dollars.

I would not say it is wrong, but I believe it is not suitable for my situation.

Based on my understanding, "investing for retirement" strategy is mostly about the gains in the long-term, so you do not mind volatility that much as long as you "lock" your profits by moving your investments from Equity into more conservative options such as Bonds, as you get closer to your retirement.

I think that this option is not ideal for me since volatility could be dangerous since I need to withdraw cash on a regular basis to cover my expenses. In such case, I would be forced to realize a loss during a market dip - a good example of such a situation would be March 2020, when S&P500 index fund dropped by 30% +.

As I said before, I am a newbie so maybe I am completely wrong, but based on my understanding, dividends are a better way to cover living expenses, rather than taking out profits from the assets growth.

 

[Zealander]

In my mind you have two options and the one you choose depends on what you want from life.

1) You do not want to work a day in your life anymore and want to do gardening, some gaming , etc (not expensive hobbies) then the investment strategy works fine for you since you could take 3 % from your portfolio and should be ok to live on 60k per year. This should in theory last you indefinitely.

2) You want to live it up (Read expensive car, bigger house and just want the pleasantries of life) then 2 million is not going to cut it without working at all. So if you plan to have larger expenses then what I would suggest is to just either freelance for like 20 hours per week or something like that and this way you would be able to not touch your investment funds and let them grow a lot. I am saying this as an option because even though you said you want to retire, really think about it what are you going to be doing when all of your friends are working, it will get boring pretty quickly.

I would just put like 1.5 m into stocks (dollar cost averaging like putting in 100k every month) and invest the other 500k into investment properties (apartments for long term rent).

Then smooth sailing from there.

Cheers

 

[MscO]

In my mind you have two options and the one you choose depends on what you want from life.

1) You do not want to work a day in your life anymore and want to do gardening, some gaming , etc (not expensive hobbies) then the investment strategy works fine for you since you could take 3 % from your portfolio and should be ok to live on 60k per year. This should in theory last you indefinitely.

2) You want to live it up (Read expensive car, bigger house and just want the pleasantries of life) then 2 million is not going to cut it without working at all. So if you plan to have larger expenses then what I would suggest is to just either freelance for like 20 hours per week or something like that and this way you would be able to not touch your investment funds and let them grow a lot. I am saying this as an option because even though you said you want to retire, really think about it what are you going to be doing when all of your friends are working, it will get boring pretty quickly.

I would just put like 1.5 m into stocks (dollar cost averaging like putting in 100k every month) and invest the other 500k into investment properties (apartments for long term rent).

Then smooth sailing from there.

Cheers

Thank you for sharing!

I definitely agree - I did not mention this, but I still want to work and contribute. The truth is that I do not care that much about money anyway... I will probably start another business shortly after I sell this one.

Anyway, back to the original point. You mentioned that you would put 1.5M into stocks, however, since I am a complete newbie in investing, I don't feel comfortable investing in something I don't understand. That is why I considered index funds (ETFs in my case), since the portfolio and strategy are already defined and I can only invest - no research, no speculation, little time managing it.

This brings me back to my original question - How to create a portfolio that would fit into my plan. (My Plan = getting a total of 4-5% per year while withdrawing around $2-3k per month) Some people say that the easiest strategy is to invest in just 2 index funds - the majority into S&P500 and the rest into Total Market.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Zealander]

Thank you for sharing!

I definitely agree - I did not mention this, but I still want to work and contribute. The truth is that I do not care that much about money anyway... I will probably start another business shortly after I sell this one.

Anyway, back to the original point. You mentioned that you would put 1.5M into stocks, however, since I am a complete newbie in investing, I don't feel comfortable investing in something I don't understand. That is why I considered index funds (ETFs in my case), since the portfolio and strategy are already defined and I can only invest - no research, no speculation, little time managing it.

This brings me back to my original question - How to create a portfolio that would fit into my plan. (My Plan = getting a total of 4-5% per year while withdrawing around $2-3k per month) Some people say that the easiest strategy is to invest in just 2 index funds - the majority into S&P500 and the rest into Total Market.

ETF's are fine. I would suggest that you need to talk to a financial advisor for your specific situation. rentals could be the part that generates you cashflow month to month and the stock portfolio for long term growth. Also do look into if you get all of the investor protections investing into S & P 500 as a european. There are a lot of good european etfs that might be easier to get since you are living in Europe.

 

[Chomiyeon]

I am inspired by hustles like this. Congrats! If you don't mind me asking as I'm just curious you reached this milestone at such a young age. How long did it take you to build and eventually reached the point to sell this business? What industry are you in... Is it a SaaS company, ecommerce, etc.?

I'm just admiring at a distance. I won't be able to post something that can help you in your current dilemma.

 

[Kevin88660]

Hello,

I would like to ask for some advice regarding investing profits from a business exit.

I am 25 years old from Eastern Europe and I am about to sell my business for around $2M (applied lessons from both books, thanks MJ!). I do not plan any major expenses in the upcoming years, so I would like to invest pretty much all of it. I have read both The Millionaire Fastlane and UNSCRIPTED so I do have a rough idea about creating the “unscripted money system”, however, I am a complete newbie in investing.

The thing is that I still have to run my business and I spend most of my time working so I do not have the time to research and learn about investing. As of now, most of my business profits are just sitting in my checking account, which really hurts to even think of the lost interest I am not getting. I would like to change that and find a solution I could implement right away before I get more time to learn more.

The biggest issue when researching a simple investing strategy is that all of these strategies are aimed at 40+ years of investing for retirement (Slowlaner strategy). Obviously, I do not want to do that. Since I live in Eastern Europe, my living expenses are around $1500 per month, so I should be able to retire already.

Most of the strategies are about investing in index funds, however, since I live in Europe, I can invest only in ETFs (and stocks). I have an account in Degiro so I am able to access a wide range of products. As I mentioned before, I am looking for a very simple strategy that I could implement right away. Based on my understanding, going for 70% Equity / 30% Bond ETF investing would be a viable strategy. The majority of the Equity investment would go in an S&P500 Index fund.

On the other hand, such a strategy seems to be better for long-term investing and not creating a proper monthly “paycheck pot” since it can be quite volatile and I will need the income regularly to cover my expenses.

With that being said, I would truly appreciate if you could share your experience:
1) I am looking for a simple strategy I could implement without doing an extensive research
2) 3-4% per year would be more than enough to cover my expenses

I was also wondering, once I get the time to really dig into this and research properly, what kind of resources can you recommend to learn about investing?

Thank you very much!

Take care,
M.

I suggest you speak to your local banker/investment advisor and explore the options.

Then you can always seek a second opinion here.

This is because for regulatory reason we don’t know what investment vehicle are available in your country. And what is the tax implication.

Probably you are looking at low cost Mutual fund/etf that give you exposure to dividend stocks and corporate debt (junk bond) that can give you 4-5% income return per year.

It is less risky than an index that contains a lot of “growth stocks”. But still it carries the risk of market volatility.

If the index crash by 30-40 percent you must be mentally prepared for a 10-15 percent drop in your portfolio.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[MscO]

I am inspired by hustles like this. Congrats! If you don't mind me asking as I'm just curious you reached this milestone at such a young age. How long did it take you to build and eventually reached the point to sell this business? What industry are you in... Is it a SaaS company, ecommerce, etc.?

I'm just admiring at a distance. I won't be able to post something that can help you in your current dilemma.

Thank you for the kind words!

It will take some time to finalize the sale and make the transition... So in total around 5 years. Yes, e-commerce.

Feel free to PM me if you want to discuss further

 

[MscO]

I suggest you speak to your local banker/investment advisor and explore the options.

Then you can always seek a second opinion here.

This is because for regulatory reason we don’t know what investment vehicle are available in your country. And what is the tax implication.

Probably you are looking at low cost Mutual fund/etf that give you exposure to dividend stocks and corporate debt (junk bond) that can give you 4-5% income return per year.

It is less risky than an index that contains a lot of “growth stocks”. But still it carries the risk of market volatility.

If the index crash by 30-40 percent you must be mentally prepared for a 10-15 percent drop in your portfolio.

Well, I prefer talking to strangers on the internet rather than talking to investment advisors :-D

I guess that the main question is whether to go after cashflow or asset growth. This is the part where I am getting confused. Considering my situation described above:

1) Option 1: Look for High Dividend Yield ETFs (Such as: Vanguard High Dividend Yield ETF), looking for a 3-4% yield that would generate enough cash flow to cover my expenses. Basically buy and "never" sell, live off the dividends.

2) Option 2: Look for a high growth potential ETFs (Such as: Vanguard 500 Index Fund ETF), selling around $40k of my portfolio per year to cover my expenses, since the dividend yield would not be enough.

Based on my understanding, Option 2 is a higher risk/reward option. If it grows more than $40k in a year, my portfolio would be growing even if I withdraw cash. On the other hand, If I would withdraw during a market crash period, those $40k could "cost" me 2-3x more because I won't be able to wait for it to grow back.

Thank you! I truly appreciate you taking the time to share your thoughts.

 

[MscO]

ETF's are fine. I would suggest that you need to talk to a financial advisor for your specific situation. rentals could be the part that generates you cashflow month to month and the stock portfolio for long term growth. Also do look into if you get all of the investor protections investing into S & P 500 as a european. There are a lot of good european etfs that might be easier to get since you are living in Europe.

Thanks for sharing.

Yes, I did think about buying a property as well, however, that requires a lot of work on my end and I do not expect to have the capacity any time soon.

We have the option to invest in ETFs such as Vanguard S&P 500 UCITS ETF. It seems to be a standard for EU investors as well

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Kevin88660]

Well, I prefer talking to strangers on the internet rather than talking to investment advisors :-D

I guess that the main question is whether to go after cashflow or asset growth. This is the part where I am getting confused. Considering my situation described above:

1) Option 1: Look for High Dividend Yield ETFs (Such as: Vanguard High Dividend Yield ETF), looking for a 3-4% yield that would generate enough cash flow to cover my expenses. Basically buy and "never" sell, live off the dividends.

2) Option 2: Look for a high growth potential ETFs (Such as: Vanguard 500 Index Fund ETF), selling around $40k of my portfolio per year to cover my expenses, since the dividend yield would not be enough.

Based on my understanding, Option 2 is a higher risk/reward option. If it grows more than $40k in a year, my portfolio would be growing even if I withdraw cash. On the other hand, If I would withdraw during a market crash period, those $40k could "cost" me 2-3x more because I won't be able to wait for it to grow back.

Thank you! I truly appreciate you taking the time to share your thoughts.

Since you are probably starting another business and this fund is to cover your expense option 1 sounds like a better option. This pot of money is not playing to win but more of playing not to lose.

Like you said you are new to investing, parking your money in a relatively safer place give you time to learn more about investing. You can diversify to risky assets later.

 

[ExaltedLife]

I would not say it is wrong, but I believe it is not suitable for my situation.

Based on my understanding, "investing for retirement" strategy is mostly about the gains in the long-term, so you do not mind volatility that much as long as you "lock" your profits by moving your investments from Equity into more conservative options such as Bonds, as you get closer to your retirement.

I think that this option is not ideal for me since volatility could be dangerous since I need to withdraw cash on a regular basis to cover my expenses. In such case, I would be forced to realize a loss during a market dip - a good example of such a situation would be March 2020, when S&P500 index fund dropped by 30% +.

As I said before, I am a newbie so maybe I am completely wrong, but based on my understanding, dividends are a better way to cover living expenses, rather than taking out profits from the assets growth.

Alternatively theres always the option of putting it all into relatively stable stocks that pay dividends, like the gas pipeline company Enbridge.

You'd have to crunch some numbers to figure out what would work though.

 

[ReeZ]

You should take the time to learn about how to manage your money - investment-wise. I think that's mandatory. You are the only person that you should trust with your own money. You can take advice but you need to learn what advice actually is good and bad.

Investing in Index Funds etc. is the general advice, and it's a good one. But that's for long-term investments. If you wanted to access this money within 5 years, it may have been halved within a month. So you need to define your investment-horizon and your risk tolerance. Frankly, it might be better for you to sit with that money in your bank account until you actually can make the required research, or at the very least doing a longer-term dollar-cost averaging. - Make sure that your money is covered in case of your bank going bankrupt.

Why not take 25% and put it into real estate, 25% into various index funds, 25% towards buying a new company. 10% for emergencies (this doesn't get touched). 5% to play with (BTC, Tesla, stocks etc.) 10% in "safer" asset-classes (gold, metals etc). - This is just an example and will take time to research learn more etc. it's not something you necessarily accomplish in a short timeframe. You can also split up the percentages differently or eliminate certain asset classes. Going a higher percentage of bonds that covers your living expenses, and putting the rest (within reason) into the market, spreading it out, and hedging your bets.


$500,000 with your own cash, and taking on debt (on the business, not personal debt) to buy a business (that you can improve) can definitively get you a good business, that you can sell 5 years down the road and make a hefty return on your money. Depending on the size, industry, etc. you can get from 4-8x - and any profits/cash flow generated during those 5 years. That's way better than than the return the market can get you, assuming it's something you can pull off.

The business is your cash-cow, it's how you generate your wealth and income. The stocks, investments are there to make sure you don't have all eggs in one basket (in your business) and enables you to liquidate if/when the time comes for that.

This is a relevant video to my last point.

View: https://youtu.be/uXZPywdfEi4

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Johnny boy]

You're becoming a slowlaner.

Why is your goal just to cover expenses?

You accomplished all you could in life?

You maxed out your potential?

You went from a nobody to a millionaire in your 20's and you're not even entertaining what else there could be for you if you did the same thing again, and again, and again?

What's your retirement going to be? Golfing a lot, drinking mojitos, traveling around on a cruise ship?

Why do you want to spend $1,500 a month for the rest of your life?

Your 3-4% return needs to be 5-7% to cover inflation.

Why do you have to run your business if you're selling it?

If you are exiting a company with 2 million dollars, your best options would be to start a new business, buy a 4-plex and rent it out, be an angel investor and invest in companies that you see have potential (buying debt or equity), etc.

But almost everything you've described about your situation and goals seems fishy.

 

[MscO]

You should take the time to learn about how to manage your money - investment-wise. I think that's mandatory. You are the only person that you should trust with your own money. You can take advice but you need to learn what advice actually is good and bad.

Investing in Index Funds etc. is the general advice, and it's a good one. But that's for long-term investments. If you wanted to access this money within 5 years, it may have been halved within a month. So you need to define your investment-horizon and your risk tolerance. Frankly, it might be better for you to sit with that money in your bank account until you actually can make the required research, or at the very least doing a longer-term dollar-cost averaging. - Make sure that your money is covered in case of your bank going bankrupt.

Why not take 25% and put it into real estate, 25% into various index funds, 25% towards buying a new company. 10% for emergencies (this doesn't get touched). 5% to play with (BTC, Tesla, stocks etc.) 10% in "safer" asset-classes (gold, metals etc). - This is just an example and will take time to research learn more etc. it's not something you necessarily accomplish in a short timeframe. You can also split up the percentages differently or eliminate certain asset classes. Going a higher percentage of bonds that covers your living expenses, and putting the rest (within reason) into the market, spreading it out, and hedging your bets.


$500,000 with your own cash, and taking on debt (on the business, not personal debt) to buy a business (that you can improve) can definitively get you a good business, that you can sell 5 years down the road and make a hefty return on your money. Depending on the size, industry, etc. you can get from 4-8x - and any profits/cash flow generated during those 5 years. That's way better than than the return the market can get you, assuming it's something you can pull off.

The business is your cash-cow, it's how you generate your wealth and income. The stocks, investments are there to make sure you don't have all eggs in one basket (in your business) and enables you to liquidate if/when the time comes for that.

This is a relevant video to my last point.

View: https://youtu.be/uXZPywdfEi4

Thanks for sharing! I appreciate you taking the time. I guess I will have think about this more than I thought

 

[MscO]

You're becoming a slowlaner.

Why is your goal just to cover expenses?

You accomplished all you could in life?

You maxed out your potential?

You went from a nobody to a millionaire in your 20's and you're not even entertaining what else there could be for you if you did the same thing again, and again, and again?

What's your retirement going to be? Golfing a lot, drinking mojitos, traveling around on a cruise ship?

Why do you want to spend $1,500 a month for the rest of your life?

Your 3-4% return needs to be 5-7% to cover inflation.

Why do you have to run your business if you're selling it?

If you are exiting a company with 2 million dollars, your best options would be to start a new business, buy a 4-plex and rent it out, be an angel investor and invest in companies that you see have potential (buying debt or equity), etc.

But almost everything you've described about your situation and goals seems fishy.

Thank you for sharing.

Not sure what exactly seems fishy - I am asking for advice on investing in a community I respect. Anyway, I am happy to answer your questions.

1) Becoming a slowlaner
- I am sorry, but I do not agree. Slowlaner is a person who tries to get wealthy by accumulating it over a long period of time, usually their whole life in order to enjoy it for a few years before their life ends. In that matter, I would say that being a slowlaner is a mindset. That is simply not me.

2) Why is my goal just to cover expenses?
- Well, yes. My money goal is to cover my expenses so I can focus on other things. I am a minimalist and I do not find joy in expensive things
- I am happy with the way I live my life, therefore my goal was to make it as sustainable as possible
- Obviously, it is not my ultimate money goal, but it is the first one I want to achieve - complete financial independence

3) Accomplished all in my life? My potential?
- Certainly not, but it has little to do with money. I do not measure my accomplishments by the amount of money I managed to accumulate. I actually have a lot of goals I would like to pursue, but in order to do that, I have to achieve financial independence first

4) From nobody to a millionaire?
- I do not think that becoming a millionaire makes me somebody.
- No, I do not feel the urge to do it again and again and again.

5) What is my retirement going to be?
- I have never said that I want to do nothing all day, drinking mojitos
- As I mentioned above, I want to pursue projects that may not be as profitable (some of them not at all profitable), but those are my passions I want to enjoy and not concern about money
- BTW I recommend reading The Millionaire Fastlane and UNSCRIPTED = build a profitable business, sell it, use the money to enjoy life and do what you enjoy (not drinking mojitos, but doing something meaningful that you enjoy)

6) Why do I have to run my business when I am selling it?
- Well, it is not a car so I cannot simply hand over the keys and be done with it. The transition takes some time, I want my team to get to know the new owner properly, etc.

I believe that you should think more about your goals - wanting more money by default could make you really miserable once you inevitably hit the ceiling. I hope that it is not that complicated to understand that I do not need more money to be happy - I respect that you do, but I am sure as hell that I don't.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Johnny boy]

Thank you for sharing.

Not sure what exactly seems fishy - I am asking for advice on investing in a community I respect. Anyway, I am happy to answer your questions.

1) Becoming a slowlaner
- I am sorry, but I do not agree. Slowlaner is a person who tries to get wealthy by accumulating it over a long period of time, usually their whole life in order to enjoy it for a few years before their life ends. In that matter, I would say that being a slowlaner is a mindset. That is simply not me.

2) Why is my goal just to cover expenses?
- Well, yes. My money goal is to cover my expenses so I can focus on other things. I am a minimalist and I do not find joy in expensive things
- I am happy with the way I live my life, therefore my goal was to make it as sustainable as possible
- Obviously, it is not my ultimate money goal, but it is the first one I want to achieve - complete financial independence

3) Accomplished all in my life? My potential?
- Certainly not, but it has little to do with money. I do not measure my accomplishments by the amount of money I managed to accumulate. I actually have a lot of goals I would like to pursue, but in order to do that, I have to achieve financial independence first

4) From nobody to a millionaire?
- I do not think that becoming a millionaire makes me somebody.
- No, I do not feel the urge to do it again and again and again.

5) What is my retirement going to be?
- I have never said that I want to do nothing all day, drinking mojitos
- As I mentioned above, I want to pursue projects that may not be as profitable (some of them not at all profitable), but those are my passions I want to enjoy and not concern about money
- BTW I recommend reading The Millionaire Fastlane and UNSCRIPTED = build a profitable business, sell it, use the money to enjoy life and do what you enjoy (not drinking mojitos, but doing something meaningful that you enjoy)

6) Why do I have to run my business when I am selling it?
- Well, it is not a car so I cannot simply hand over the keys and be done with it. The transition takes some time, I want my team to get to know the new owner properly, etc.

I believe that you should think more about your goals - wanting more money by default could make you really miserable once you inevitably hit the ceiling. I hope that it is not that complicated to understand that I do not need more money to be happy - I respect that you do, but I am sure as hell that I don't.

Okay have fun

 

[lludwig]

Hello,

I would like to ask for some advice regarding investing profits from a business exit.

I am 25 years old from Eastern Europe and I am about to sell my business for around $2M (applied lessons from both books, thanks MJ!). I do not plan any major expenses in the upcoming years, so I would like to invest pretty much all of it. I have read both The Millionaire Fastlane and UNSCRIPTED so I do have a rough idea about creating the “unscripted money system”, however, I am a complete newbie in investing.

The thing is that I still have to run my business and I spend most of my time working so I do not have the time to research and learn about investing. As of now, most of my business profits are just sitting in my checking account, which really hurts to even think of the lost interest I am not getting. I would like to change that and find a solution I could implement right away before I get more time to learn more.

The biggest issue when researching a simple investing strategy is that all of these strategies are aimed at 40+ years of investing for retirement (Slowlaner strategy). Obviously, I do not want to do that. Since I live in Eastern Europe, my living expenses are around $1500 per month, so I should be able to retire already.

Most of the strategies are about investing in index funds, however, since I live in Europe, I can invest only in ETFs (and stocks). I have an account in Degiro so I am able to access a wide range of products. As I mentioned before, I am looking for a very simple strategy that I could implement right away. Based on my understanding, going for 70% Equity / 30% Bond ETF investing would be a viable strategy. The majority of the Equity investment would go in an S&P500 Index fund.

On the other hand, such a strategy seems to be better for long-term investing and not creating a proper monthly “paycheck pot” since it can be quite volatile and I will need the income regularly to cover my expenses.

With that being said, I would truly appreciate if you could share your experience:
1) I am looking for a simple strategy I could implement without doing an extensive research
2) 3-4% per year would be more than enough to cover my expenses

I was also wondering, once I get the time to really dig into this and research properly, what kind of resources can you recommend to learn about investing?

Thank you very much!

Take care,
M.

Congrats and welcome to the "sold your first business" club.

 

[Martzee]

You can open a trading account with Tasty Works, for example. They will allow you to access the US exchanges and buy stocks and trade options. Here is their link:

Tastytrade Help Center

support.tastyworks.com

Unfortunately, to trade or even invest in the markets, you will have to dedicate time and learn about it. You cannot run your own business without giving it any time and effort to learn, can you?

However, you still can place your money into an index fund for example SPY (S&P500), QQQ (Nasdaq), and IWM (Small caps) to park the money in there until you learn how to invest. You will participate in any market gains (and losses), and collect dividends.

And once you learn the ropes, you can sell those funds and do some active management investing in dividend stocks and trade options.

And let me use a typical cliche - if you invested money in SPY in 2010, your money would gain 230% since then. Some people despise this and "not enough" but better than in a savings account.

After that, learn the ropes. Set a strategy and a plan and execute. Investing and trading is a business and a very hard one. Clueless people lose their shirts. Ask yourself questions such as what you want from investing? Growth? Passive income? Active trading? And once you know find ways how to achieve it, what tools to use, and what investment vehicles to use.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Freddy270291]

If I were you, I would invest 1M in the most secure stocks and diversify this investment ("secure" stocks like JNJ, MMM, ABBV, O, SO, etc..). If you manage to have around 3% of net dividends, it would be 30k/year (2.5k/month) and that's enough to cover expenses and keep investing the remaining dividends.

The other thing, you will have the extra 1M (better 800k, just to have 200k as FU pot or cash for unexpected events) to invest in yourself and eventually a new businesses/houses to rent.

My 2 cents.. and congrats! Would love to hear your story..

 

[MTF]

@MscO you seem to be pretty conscious about what you want and very mature for your age, and that's a great first step on this new path.

Since you want predictable cashflow (I'm partial to such investments as well), I'd primarily go with dividend stocks, ideally blue chips with a long history of paying dividends - dividend kings that have increased their dividends for at least 50 consecutive years or dividend aristocrats that have done so for at least 25 years.

I prefer to invest in individual stocks due to my worldview but there's ProShares S&P 500 Dividend Aristocrats ETF that owns shares of all dividend aristocrats. It's probably the simplest thing you can do to get predictable cashflow from your investment in the stock market.

Once you invest, say, $1-1.5 million in dividend stocks depending on how diversified you'd like to be, consider other options.

A small amount of precious metals (say 5% of your portfolio) is good insurance. It won't cashflow and you aren't buying it to sell later. You're just buying it to store some wealth in an asset with a long, long history.

Real estate could be a great choice as well for cashflowing investments but I don't know that much about it as personally I wouldn't want to deal with tenants and/or property managers.

There are probably some good real estate opportunities in Eastern Europe. But this requires way more effort than the stock market (can easily become a new job) so you need to take that into account.

You may look into P2P real estate loan platforms (or more easily, a deal syndicate like www.evoestate.com) to diversify without this additional time/energy investment.

Other than that, you said this:

- As I mentioned above, I want to pursue projects that may not be as profitable (some of them not at all profitable), but those are my passions I want to enjoy and not concern about money

If these passions have even a little of earnings potential, if done right eventually they'll become your additional sources of income. And these can actually become your safest, most enjoyable income streams. For example:

• $500/month from Udemy courses teaching about your business experience
• $250/month from a book on knitting (that you learned for fun)
• $750/month from coaching others how to knit (not passive but enjoyable and you have all the time you want so why not if it's fun?)

Then as you expose yourself to new, different things that early retirement will help you with (passions, industries, places people), you'll build a wealth of knowledge, connections, etc. and that in itself is another storage of value you can tap into whenever you need it.