[USER]

We (husband and I) recently received a windfall of ~12mil(post tax) due to my company’s acquisition. Before that happened we already had 2mil invested into the stock market, have a 1.9mil mortgage with a 3% interest rate, 2 kids (8 and 3) with 529 accounts being funded and 401ks.

We are both from India and work in tech in senior management roles. We will be 40 in less than 3 years. What should our strategy here be?

I would like to retire soon if possible but my husband intends to keep working as of now. He makes 350k per year and I make 275k.

My first thought is to pay the mortgage off but we have no idea whether to just invest everything in stocks etc or will something else get us more returns?

We live in Fremont CA.

[Emily]

I can see why you would want to pay off your mortgage since it is probably a huge monthly expense.

Even if you have a large sum from your windfall, I’m guessing only one salary won’t be enough to live on.

However, as someone else said, it is cheap debt, so you may not want to pay it off.

First, I would say to find a good financial planner for a fee not a regular management commission.

As part of that, they will ask you to do a budget and figure out your expenses and spending

What amount will you need to cover your lost income? I doubt it is your full salary, but you do need to know.

So, you have a good way to turn part of that 12 mil into cash without depreciation of the initial asset?

It could be using the 3-4% withdrawal rate or it could be in stocks that provide dividends etc.

From there, you will be able to make an easier determination of what makes the most sense.

There are a lot of people in this group working on their first 100k and they need some free FB advice just to get them on the right track.

You have enough here that you probably need some advanced planning and also some serious tax advice too.

A lot of it is also about mindset. With such a large amount, you can withdraw almost 500k a year using the 4% rules and hopefully not impact your principle.

So, if you stick within that budget etc. you should be ok, but many people get excited – second home, fancier car, etc.

and all of a sudden your spending has increased significantly because your mindset sees this as bonus money rather than a replacement of your current salary.

So, hire a few professionals and be mindful if how you think about this windfall and how that shapes behavior and it should work out well for your family.

[Wilson]

For a peace of mind, I’d pay off the mortgage BUT, I’d also give back. There are a lot of kids & people in your country that needs help.

Give back.

[David]

Work two more years
Pay everything off

You will likely have $500,000 a year or more without even trying from a simple HYSA

You won’t run out of money in this lifetime or next
Retire

Enjoy life, you made it

[Vishnu]

Congrats!
You can easily retire today assuming the 4% rule and you maintain a similar lifestyle.

This is not financial advice (have to do that) but here’s what I would do:

You can pay off the mortgage or not. It’s whatever helps you sleep better at night. At some point you don’t have to optimize for every dollar you get.

At this stage you can choose to give up opportunity cost for peace of mind if that’s what you want. Nothing wrong with it. Assuming you don’t pay off mortgage.

I would deposit $1-$2 million in a FCNR account in India for 2-3 years. It’s about 4.5% rate at the moment.

I would personally keep some cash outside of the US as a safety net. Decide what to do with the money afterwards either bring it back here or reinvest into something else in India.

FCNR stays in USD and doesn’t convert to rupees so the money holds strong.

Buy $2-$3 million in cash flowing real estate. Ideally larger multi family or the like. (I have a background in this so I would personally buy more but that’s just me.)

Put $6-$8million into a low cost index funds. Pull out 4% each year or don’t depending on if you’re working or not.

Buy some gold and crypto with the rest, keep the rest in cash (one year of expenses) either for emergencies or for some biz opportunities.

You can also allocate a small portion of your yearly earnings to give to a charity or nonprofit organization every year.

And definitely splurge up to $250k or so without feeling guilty!
Congrats again!

[Arslan]

Pay off mortgage and all other debts
Retire and let your husband work
Invest the remaining into whatever high conviction plays you like or ETF.

Rest and relax and enjoy life.

This is the way!

[Brian]

Congratulations!!! If it were me, I’d hold tight & just sit on the liquid cash for a bit. Let it all settle.

While you wait, get your estate set up including a trust fund.

You all may very well not even want to stay where you are as soon as you’re ready to FIRE.

It’s time to reimagine what’s possible in life.

What an amazing blessing!!!

[Amanda]

I’d 100% pay it off. This economy is so volition right now.

And as long as you can keep your expenses manageable I absolutely think you can retire

[Paul]

We’re extremely wealthy and can do whatever you want. Pay your mortgage offer don’t pay it off. It doesn’t matter. Get an investment advisor if you don’t know how to invest.

Maybe Fidelity.

They will tell you what to do with your money to keep it safe you don’t ever have to work again if you want to, and if your husband wants to keep working, that’s fine.

You are in the top 0.1%.

[Justin]

Keep the mortgage With a 3% interest rate, your mortgage is considered “cheap debt.” Investing the funds in higher-yield options (e.g., stocks or bonds) could generate returns that exceed the interest saved by paying off the mortgage.

• If peace of mind is important, consider partially paying it down while keeping liquidity for investments.

[Author]

Posts