how should you invest $100,000 what about 1 million even if you don't have these amounts the principles in this video still apply I'll teach you how to build a simple long-term set it and forget it portfolio so that you can get started investing today whether you have a dollar or a significantly higher amount stay tuned okay so before I get into teaching you how to actually apply these principles and the qualifying questions we're going to ask we need to understand who is this video even for so this could be for people who have inherited a
significant windfall uh you know having forbid the is through the death of a loved one or someone who just won the lottery or could be an insurance suit who knows but large windfall number two is people who have sold a business so they've built their business over time over many many years uh they're starting to get a business that is actually salable that they can sell for specific amount based on the valuations that they make and they can send it sell it for hundreds of thousands to tens of millions to hundreds of millions of dollars
who knows number three is Savers so these are people that have been saving for a long time uh they're the type of people that are the brick brick people their dollar cost averaging they're investing in their 401ks their Roth IRAs these are people who've been investing for a long time and now they have a significant Nest Egg of 100,000 million maybe even five or10 million and then also the newbies so these are people that are just starting to invest all these principles that I'm going to teach you will apply to all these categories of people
but I do want to qualify this very quickly before I get into the meat of the video so why is it so hard to invest such a big amount of money okay so say you are the business owner who sold his business for $3 million right now you have this big infusion of cash what are you going to do with it so if it came fast you don't want to blow it so windfall this could be fast uh you sold a business that's not fast Savers are not fast newbies are not fast or it can
be slow you built up a business over many years you saved over many years or you're just starting okay so that's kind of neutral so came fast you don't want to blow it if it came slow you want to preserve your purchasing power because you took all this time to build up a business to save this money you know or you're just starting out right so both of these shouldn't change your approach but there's life implications of you know death say it is a windfall now you have to think about life without that spouse or
that loved one or you know having forbid child whatever it is uh you could have sold your business now you have no purpose in life you're kind of retired if you will or you're you you want to start something new or you left a career uh you left a long career where you saved up for a long time and they 401k or you built up a lot of money in cash and now you don't know what to do because you're either retired or you're changing careers or starting something new so we're going to get into
all this and this is setting the foundation for the video okay so one more set of questions I know you guys are probably clicking off this video now but this is important especially if you are the Target demographic for this video who does have a lot of money so there's three important questions this is three question mark So number one is the time frame for this money okay is this going to be three years or less are you an older person who needs the cash right so if it's three years or less keep it in
cash if it's three or more you can invest it right so that's typically when people ask me hey Marco I'm saving for a down pay of payment of a house should I keep it in a high yield savings account or CDs or some cash equivalent like a treasury for example T bill or should I just invest this in S&P 500 and use it for the down payment so this time frame is important if you're older I think cash is a little bit more secure gives you more peace of mind uh if you are more open
to risk then you can invest it but that time frame should be 3 years uh so lump some versus dollar cost average so yes you sold the business yes you have this big uh inheritance yes you have this big windfall uh do you invest it all at once with the lump sum or do dollar cost average meaning do you invest this uh same increments same time frame over a long period of time so I already did a video on this I'm not going to get too much into it but the findings from that video was
that lump sum uh actually produces better results than dollar cost averaging however dollar cost averaging I think is what behooves most people from a psychological standpoint so the psychology of not Plumping in all your money at once at one time because you may get in at a high entry you may get in at a low entry you may get in somewhere in the middle um you know time in the market is obviously better than timing the market um so I think for most people it'll behoove them to dollar cost average but this is something you
can only answer for yourself and then number three is how involved do you want to be so do you want to set it and forget it which I'm going to show you here in the next slide or do you like analyzing individual stocks do you like real estate do you like you know being philanthropic do you like giving it to charities is you like being involved in volunteering there's a bunch of different things that you can do with your money and remember guys money is just Freedom Units it's just options that's all it is um
so you need to realize or figure out how involved you want to be so if we are talking about death in this video with the windfall and stuff like that uh check out today's sponsor policy genius life insurance is my family's Financial safety net a proper life insurance plan is the best defense you and your family can get this process may sound overwhelming but it couldn't be simpler than using policy genius to simplify everything my wife and I did just that getting started with policy genius is simple we filled out our information on the website
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a life insurance policy through policy genius can give it to them head to policygenius.com whiteboard Finance or click the link in the description to get your free life insurance quotes and see how much you could save okay so let's get into the two portfolios that I'd recommend to my own brother or sister or parents okay so if you're someone who said it and forget it you want a dollar cost average over the long term or just plop this into uh two or three asset classes this is not involving real estate this is not involving alternative
Investments this is not involving Bitcoin this is more of your traditional financial advisor portfolio if you will so we have the two fund portfolio which is Warren Buffett's portfolio he said in a newsletter that he would recommend this to any of his trustees uh and it's going to beat any High fee manager over the long term so what he recommends is 90% some sort of S&P 500 equivalent uh you can use like uh spy or ticker symbol uh vo for example uh and then you can use 10% short-term treasuries this could be a VSS I
don't want to write this down it's I'm running out of space it's vs sbsx or vgsh um either way depending on your age you know if you're 25 then I would go 9010 uh if you're 75 I probably wouldn't go 9010 so you can always play around with these weights but his big philosophy in the twoof fund portfolio is that it's heavily weighted towards equities with a low expense ratio and again you can get that exposure using ticker symbol spy or vo those are just a few examples or you can go the Jack Bogle boglehead
three fund portfolio so this is the this is similar except it's not S&P 500 it's actually going to be total US Stock Market you get exposure to that with vti um and then you can have us bonds total us bond market you can do that with b and d and then International stocks this is everything excluding United States that's VX us okay sorry I know it's kind of hard to read so what Jack Bogle talks about is that you can do a three fund portfolio it's pretty much similar to this one um except I've done
a demo on these two portfolios over the past 40 years this two fund portfolio destroys the three fund portfolio and a part of that is because since in Inception uh this us Bond B andd fund is down about 5.2% okay so just something to think about but this is basically the two portfolios and let me get into different waiting here okay so we talked about the waiting on the two fund portfolio you can adjust these accordingly uh typically the rule of thumb for basically equities to Bonds in your portfolio is the number 110 minus your
age so if you're 30 years old you should have at least 80% exposure to equities if that makes sense um some people do 120 if they want a little bit more equities in their portfolio but basically this three fund you can break it down to a few different common weightings you can do 8020 you can do 33 3 33 34 uh or you can move that 1% around however you want or if you're a little bit older you can actually do uh 2080 20% equities 80% bonds uh personally I'll show you exactly what I do
um I'm running out of room here uh let me actually do this in the next slide here I'll show you exactly what I do with my own Pi Theory okay so this is my own personal Pi Theory uh I'm not looking at this as just one portfolio I'm looking at this as my entire net worth so if you guys are looking for a gauge on what I do uh this has been my Pi theory for many years now uh so typically I like to be in 15% cash um it could be a little bit less
depending on the uh type of Market we're in however this is not only just an emergency fund this is also for buying opportunities as well this could be buying a business buying a piece of real estate so I know 15% sounds high but there's a reason for that it's offense and defense uh number two is stocks is 35% of my net worth bonds zero as long as I can help it uh real estate 33% precious metals 2% bit coin 15% and then also I'm involved in some private uh Capital deals private equity and then also
0% on Commodities I would run as far away from Commodities as possible uh this right here Bitcoin that's the only commodity you need so if you guys are looking for a barometer you can easily adjust this so if you know you have all your net worth and one of these things you can adjust it but also uh to play Devil's Advocate if you are an expert in stocks an expert in bonds an expert in real estate then I would probably just focus on what your subject matter expert in because you can get outsize returns and
you have an edge if you want to be Diversified this is exactly what I do okay so my thoughts at the end of the video These are never scripted I don't have any bullet points I'm literally just freestyling this uh when it comes to my thoughts and uh investing a large sum of money uh the math the math basically justifies Vanguard has done studies on this people many people have done study studies on this lump suum beats dollar cost averaging but from a psychological standpoint it's the same question as should you pay off your mortgage
right well on one hand mathematically if you have a low fixed rate interest rate you know why would you pay that off on the other hand it could give you some psychological benefits so you need to understand that you need to understand your time frame you need to understand your age and your risk tolerance so there's no one siiz fits all but once you answer those questions the two and three fund portfolios are still a very viable option uh the two fund has crushed the three fund over many many years however that's a lot of
different economic factors that may not be true in the future no one has a crystal ball so when it comes to stuff like this you need to think of your net worth as a pie that's the analogy that I always give um and this pie should be should be Diversified into many different things in my opinion for the average person again if you're a subject matter expert in one of these slices then that slice should probably be your whole slice right if you're an expert in restaurants why would you invest in stocks right you're going
to get way better returns running a restaurant so um Different Strokes for different folks but I think for the majority of people who don't want to be full-time you know equities analysts burning the midnight oil and researching all these individual stocks and earnings reports and you know 10ks and all that stuff um the the two and three fund portfolios are a good starting point hopefully you got value out of this video if you did please like the video share it with a friend hit the notification Bell and leave me a comment Down Below on what
you thought thank you so much and have a prosperous day if I didn't have a wife and kids this would be my pie right here just a whole lot of Bitcoin buddy no I'm just kidding I just want to make as many people as mad as possible bye Bitcoin nerds [Music]
