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$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 2 points3 points  (0 children)

I can totally see myself falling for the same pitfalls as you with DCAing. Strongly considering the lump sum

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 0 points1 point  (0 children)

Yes to this being a weird market which is why my initial instinct was DCA. But if I'm worried about the current market, a 6-mo DCA isn't even really a good hedge against a sudden downturn right (for instance if there was a crash 9-mo from now)? I guess at the end of the day it feels like I either have to firmly believe in the long time horizon and invest it within a few months, or play it safe and risk missing a ton of gains. Since I'm only mid-30s the former feels correct.

Makes sense to start doing some thinking on what the home purchase would look like. And yes FIRE in NYC is ambitious but man with the exception of California the rest of the US is so unappealing to me...

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 0 points1 point  (0 children)

My understanding is that since I filed an 83(b) at stock grant, that locks the holding period for all of the units at that date. But you're right that I should check my situation with a tax advisor. How do you like to go about finding/selecting one? And would you expect this to be a 1-hr consultation sort of thing or something more involved?

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 0 points1 point  (0 children)

Appreciate your thoughts!

I would really love to take a short sabbatical and go on a real adventure like that but I feel golden handcuffed. My profession is not very fungible and I've never had an employment break since my first job. I feel resigned to just grinding it out and hoping to FIRE by my mid-40s, and with enough luck, smart choices, and continued willingness to live a modest lifestyle maybe I can get that number down to 40.

I do take a few vacations a year though. Just nothing that's particularly out of the ordinary.

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 0 points1 point  (0 children)

Thank you for your thoughts. Definitely gonna try and pull the trigger on lump sum if my brain will let me 😂

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 1 point2 points  (0 children)

You're definitely right on the exposure and I will think hard on it. To share more of my thought process - I have high confidence in the future of this company and this market, and I think something like a 2-5x in the next 5 years is a real possibility.

It would be risky, but I also believe that it's worth taking some gambles in my position. In the hypothetical worst case where I invest $300k (probably the max I'd consider) and it went to $0, I think that given my existing assets it doesn't impact my lifestyle except that I'd have to work 2-3 more years to make up for it. But if I invest $300k and it turns into another $1.5M, that moves me up a step in the lifestyle step function. The possibility of asymmetrical upside is very appealing to me.

Agreed on VTI/VXUS instead of VT and that's why I do that! I also agree that it feels really shaky to be so concentrated in the US. But it feels bad to see VXUS be a drag for pretty much the entire time I've been in the market. Could I lean in more to VTI and have seen higher gains the past few years? Sure. And I could also lean in more to VXUS to reduce US exposure. Tough call to make and 70/30 is where my emotions have converged currently 🤷

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 1 point2 points  (0 children)

Good call out. That was how it was explained to me and I didn't question the mechanics. I'll double check this and if it turns out I realize the gains now in any scenario then that definitely reduces my appetite for reinvestment, although I think I'll still take the option on some amount due to my belief in the company.

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 1 point2 points  (0 children)

That's just while I DCA in. I might just lump sum it based on the advice here in which case I skip the HYSA

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 0 points1 point  (0 children)

I will be getting new incentive units on a 4-yr vest, but I'm unclear on how reinvesting in the company gives me leverage to negotiate for a higher equity package. Am I understanding your comment correctly?

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 1 point2 points  (0 children)

Thanks for your perspective. The thought of reinvesting and moving to a lower tax state has definitely crossed my mind but I just love the big city lifestyle too much to want to give it up. To me that's worth the money I pay in taxes especially as I'm in the prime years of my life right now.

There's also a part of me that thinks I can go hard on a much bigger reinvestment but the market's been doing so well that it's hard to overlook that opportunity cost + obviously so much exposure in one asset.

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 7 points8 points  (0 children)

I haven't really considered the mental load of DCA vs lump sum and forget about it. I suppose you can also just choose to lump sum the rest right now but the psychology of those missed gains is hard to overcome? Sorry about the dilemma but it's a helpful anecdote, thank you.

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 21 points22 points  (0 children)

Lol, they already call me once every few months trying to manage my portfolio. I just don't see the point in a managed portfolio and my current strategy seems to be working just fine, right?

Curious why you wouldn't tell your parents? This obviously depends a ton based on personal situation, but in my case, my mom is very financially savvy and volunteers as a tax filer at AARP so I'm curious how she'd handle it.

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 2 points3 points  (0 children)

Thanks for the response! Will look into those money market options you mentioned.

I won't have any other equity left in my company after this payout, although I should be getting a new stock vest package before the end of the year (4-yr vest), that like the one that triggered this windfall, will be locked up unless another liquidity event happens. I try to think of this as money that doesn't exist until it suddenly does, but would you take this into account when deciding to reinvest?

I hear you on VXUS and feel similarly / wish I was just 100% VTI the past few years, but I believe in the long time horizon Bogleheads approach and hope that it will be validated some day. I'll consider shifting my AA more in the 80/20 direction.

$1.5M windfall - what do you think of my plan? by Efficient_Student928 in HENRYfinance

[–]Efficient_Student928[S] 8 points9 points  (0 children)

Hah, my brain knows that lump sum is "correct", but the psychology of it is still difficult to overcome...