Going back home with $1.5M. How should I start?

[Rickson9]

Unless you are atheist. Then Well Played Sir!

 

[invst4profit]

I agree 100% Adam.

At that age with that money and income I would be set for life and not looking for the stress and work associated with further earning. I would channel all my efforts initially into finding someone trusted to invest and manage my cash. My investments would be conservative and lifestyle simple middle class.

 

[Rickson9]

I would be in the opposite boat. I would continue to actively invest. I actually had that amount at that age and took almost 2 years away from employment. It may sound strange, but I got progressively bored. It was shocking how long 16-18 hours a day, every day, every week, every month is.



I traveled, I played video games, I watched movies, I worked out, I had hobbies, but I still got bored. I had no goals. Another big problem is that most of my friends were working when I was not. I couldn't even hang out with my friends until the evening or weekends.



I just recently turned 40 and have doubled that stake and then tried to 'retire' again. This time I only made it to 1 year before throwing in the towel. Perhaps when I'm older I'll be able to hold out longer. When all my friends retire.



I compromise by taking a job that takes up around 20 hours a week and a hobby that takes up 6 hours a week. I still have quite a bit of free time. I just got back from a 2 week vacation in California (Oakland/SF)



16-18 hours of free time a day may not be long if you have a month or so of it, but month after month, it becomes pretty brutal.



First world problems.

 

[invst4profit]

Defiantly understand, I suspect you may be a A type person. The money you earn is only a side effect of doing what you find fulfilling. There is also the common problem among individuals with "money" that they never have enough to feel complectly secure, the more they have the more they feel they need to reach that point of compleat financial security which then becomes unattainable.



For myself I retired at 56 and have worked full time since renovating/flipping homes and have put aside all my personal hobbies and interests. At the end of this summer I intend to retire again and have probably enough hobbies, interests and activities (including renovating my own home) to keep me occupied 24/7 to the grave. The fact is my interests could have kept me occupied regardless of what age I retired.

I personally have never placed a high value on wealth as long as my wife had enough to live comfortably. Now that I feel she is financially secure regardless of my life expectancy I have no reason to earn any more money but it just keeps coming in anyway.



Funny how that works when you are young you work hard for low wages and never have enough and when you are older and really don't need as much as you have everything you need there is more than you need to spend. Leave it for the kids I guess.



However 1.5M plus a income of 3500/month would have put a stop to my working days. That's potentially 10,000 per month with conservative investing and in my opinion more money than anyone really needs.

 

[Thomas Beyer]

[quote user=invst4profit]

Funny how that works when you are young you work hard for low wages and never have enough and when you are older and really don't need as much as you have everything you need there is more than you need to spend. Leave it for the kids I guess.


Interesting observation that I second ..



so what IS the answer then to that ? Slack off when you are young ? Travel more when you are young ? Work less when you are middle aged ? Spend more lavishly on travel or life today (business class flight instead of economy, leather seated car instead of cloth, house with a view as opposed to one without a view, ..) i.e. spend more on life's enjyoable things that are not necessary but certainly enjoyable ?



Although I do know people with immense wealth who would not fly business class or buy that new car .. and I always wonder why that is ?

 

[invst4profit]

The answer is simple. Do what ever you want.



Each individuals sole purpose in life is to please themselves until they no longer exist. There is no "greater purpose" to life.

If you are not happy then you do not understand the basic concept of our existence.

 

[Rickson9]

[quote user=ThomasBeyer]Although I do know people with immense wealth who would not fly business class or buy that new car .. and I always wonder why that is ?




Ironic that you mentioned this.



Although I don't have immense wealth, both these situations have happened over the last year.



During my latest flight to and from California, during the online check-in, I stared at the "upgrade seats" page for a long long time. The amount to upgrade was a relatively meaningless, but I just couldn't pull the trigger. It just felt like a rip off (I'm sure that I get "ripped off" all the time by buying various brands, but this emotion was more pronounced for "upgrading" the seats). I know the money was a relatively insignificant, but I just couldn't do it. It was interesting sitting at my seat in front of my computer, pondering my intent/motivation/emotions/ego.



The same thing happened about a year ago with a car. I just couldn't justify buying a lavishly branded hunk of metal that took me from point A to point B; which doesn't do the task much differently than a less lavishly branded hunk of metal. Again, the difference in price, while more significant than upgrading the flight, was still relatively inconsequential.



I used to know a fairly wealthy pharmacist who owned a number of pharmacies who wouldn't pay the piddly $100 a month "towel service/plus" membership at the gym, and instead, after showering, literally took hundreds of paper towels to dry himself.



I've seen people use their money to find relationships/love/acceptance/admiration/etc.



It's very deeply ingrained habit used to shore up psychological issues I think.



I've long stopped investing just for the money. It's closer to a compulsion/addiction/obsession. IMHO.



[quote user=ThomasBeyer]so what IS the answer then to that ? Slack off when you are young ? Travel more when you are young ? Work
less when you are middle aged ? Spend more lavishly on travel or life
today (business class flight instead of economy, leather seated car
instead of cloth, house with a view as opposed to one without a view,
..) i.e. spend more on life's enjyoable things that are not necessary
but certainly enjoyable ?


I think this is a personal decision. Speaking for myself, I tried the slacking off. That eventually made me into a lazy, unmotivated, blob.



I also tried the traveling. Again, this may sound ridiculous, but after each cruise/5-star resort/"fine-dining"/etc. the pleasure drops off dramatically until you don't even remember where you went because they all look/taste/smell/feel the same, and you'd rather be home anyway.



I also tried doing the consumer-centric buying-stuff thing. That's a treadmill to nowhere. The pleasure hit the first time is great, but it also drops off hard unless more money is spent, and then eventually that doesn't work, and you have to keep buying "the next thing" to get that pleasure "hit". It never ends. Also the feeling eventually becomes empty/pointless/brainless-slave-to-marketing.



My "solution" is to spend the money on my family/friends. I actually find it 10x easier to buy stuff for them. I may
agonize for months on whether I really need another iPad mini, but I'll
buy them for my friends/family. Especially those who are not very financially
well-to-do. For no particular occasion/reason. Just to see them enjoy
it.



So that's what I'm doing now. I use the money to encourage/facilitate time together over food/drink/conversation. It's quite rewarding/fun/enjoyable.



I need to restrain this kind of behaviour with my daughter. I can see buying things to "see her happy" being very destructive to her
personality/ambition/assocation-with-money/ego.



All IMHO.



First world problems.

 

[TangoWhiskey]

This post headed down some great tangents. For me, having spent the last year and my own capital learning how to manage large, complex renovation projects of 500-600K that is necessary to do a large apt bldg upgrade and tenant re-positioning, I can see the large sums of wealth that will result from a career spent doing this and eventually larger projects. If you want a challenge Cammeray, and had LOTS of time to spend, and an interest in learning how to execute a vision through construction, you would certainly be able to take your capital and supercharge your wealth building by learning how to do development or large renovations on whole apt buildings but it will come at the cost of your time for about 2-3 years and it will be a lot of stress. On the plus side you get the satisfaction of seeing a large permanent expression of your own creativity and efforts which can be pretty nice.



You could buy that 11 suiter Thomas forwarded the link for (great resource in this community) but before buying investment real estate read the book Other People's Money. This book is a great account of the worlds largest apt building deal in 2006 for two complexes of 11000 units in Manhattan that failed resulting in the loss of 2 billion $$$. It has a great account of the impact of tenancy laws on the financial success of this deal and more generally in real estate investing, so when considering where to invest ALWAYS consider the political landscape. Trump in Art of The Deal also rants on about rent control laws - do yourself a favour and read these two books.



BC is rent control so that's why the rents on that 11 suiter are definitely below market. If you can, avoid political controls of your investment future. You like control of cashflow and your investments and this is a risk you haven't been exposed to so far which could really hurt you without prior study. Most provinces in Canada are rent control and if I was to focus on one of them I would find a niche were rent control laws don't apply, like new construction after 1990 in Ontario. Or I would go to a province that doesn't have it; namely AB SK NB and NS.



Good luck.

 

[invst4profit]

If you look outside BC do not even consider Ontario. The government here is extremely pro tenant believing that "tenants can do no wrong".

As a example evictions can take up to 6 months or longer and in the interim the tenant can live rent free if they chose simply walking away scott free in the end. We have no damage deposits, pet restrictions are illegal and rent controls are killing the business for small investors. The list of ante landlord policies goes on and on.

 

[RedlineBrett]

To the OP I would rent, and establish your 'back to Canada' lifestyle costs, and ensure you can keep it under your 100k /yr.



Get a REIN membership if you are interested in real estate. Maintain employment in your feild. 1.5M is not enough to retire at 32. Once you have some answers there then you have less variables in your 'lifestyle' equation, and you will know more what the pot of gold has to look like.



To the others... lots of really interesting insight! How hard you need to work really comes down to how expensive your kicks are.

 

[Wei]

I agree. Despite how people like Vancouver real estate, it is not the best place to invest. I think a lot of it is emotional attachment to "the best livable city in the world".



Eddie, if you are willing to look outside of the box, in some cities in northern BC or Alberta, you can get way higher return and cash flow that you would can't dream of in Vancouver.



http://www.goldenbuffalo.ca/investmentsummary/