$700k - where do we put it?

[daniel927]

@stell Go to an advisor..

 

[apostleteora]

@stell Clearly you're not getting the advice you came here for. Maybe I've missed something too. Can you clarify your outright gross worth excluding your family home and debt on investments ($1m, correct?)

You want passive income of at least $140k per year and your business is bringing it $5-600k per year. Have you sold your business or is something happening to that income? Are you going to hire a managing director to replace you while retaining your shares?

You are right to worry about rising interest rates. Inflation is absolutely booming and the RBNZ has to do something about it. Rates may rise quickly.

I think you should also be looking at international investments to hedge your NZ exposure, even though the NZD will be stronger than other leading currencies if the RBNZ becomes bullish.

 

[stell]

@apostleteora Correct. We have a morg on the rental of $1M. Business is still with us, returning $500-600k after tax and for the purpose of discussion not factoring in a sale. Thanks for the advice.

 

[apostleteora]

@stell It seems to me the best way to achieve what you desire is to hire a managing director to sustain and grow the business while you retain a directorship and the shares. I assume the CEO salary will be at least $200k and up to $400k, netting you a $100-400k dividend plus any growth. Alternatively you could promote one of your existing team into a senior leadership position to take over the majority of your responsibilities and pay them an increased salary along with bonus or profit share.

As for the $700k - I would offset that against your mortgage while you have it sitting in cash and are deciding what to do. Then talk to your bank about their private wealth team. You may or may not have enough net wealth to be welcomed as a private wealth customer but you have enough income. I imagine they will consider it. They will be able to give you sound and free financial advice and you will get exclusive access to investment products.

I disagree with the advice here to speak with a general financial advisor. You'll recieve generic advice that is universally applied - as you have alluded to. The private wealth team with you bank will give you better advice and access to products and they'll do it for free (the advice part at least). Your investment fees will also reduce as you become a bigger fish.

Also I would always keep $200k in straight cash in your position while maintaining a $140k per annum lifestyle.

 

[stell]

@apostleteora Thanks for advice. We've requested with Westpac to get into this space. We might look at the MD play in 2023 to run the company. I will miss it and the ppl too.

 

[ingodislove]

@stell Go to r/FatFIRE and check out the post history. Many have asked this same question and received tons of advice.

 

[stell]

@ingodislove Thanks for the link!

 

[robin459]

@stell Well done mate! I get such a kick, and a healthy dose of motivation out of reading success stories like yours.

I tend to agree with others that you shouldchat to a professional. My situation is wildly different, and i’m nowhere near FIRE, but I’d either invest in ETFs (nzx50, sp500 + vanguard total world) or try my luck at new build property development (maybe just a couple of townhouses, nothing large scale, but attractive due to new build low mortgage rates, new zoning laws, exempt to new landlord rules, aaaaaand our fellow kiwis need homes to live in).

Good luck friend

 

[stell]

@robin459 Cheers mate, you'll get it done. You'll laugh but I stacked containers for a job in East Tamaki 14 years ago for 2 years.

 

[sarahsocool2010]

@stell Sought advice?

 

[jkpeach1]

@stell What do you do for a living.. that’s all I want to know!