How to Invest $15 Million

About this video

• Video Title: How to Invest $15 Million
• Channel: Rob Berger
• Speakers: Rob Berger
• Duration: 00:28:18

Overview

This video addresses six common financial and investment questions. Rob Berger discusses how to invest a large sum of money, the nuances of the 4% rule and inflation, the comparison between multi-year guaranteed annuities and Treasuries, the role of high-yield savings accounts versus bonds, and finally, a personal question about practicing Bikram Yoga.

Key takeaways

• Investing $15 Million: The approach to investing should remain consistent regardless of the amount, focusing on low-cost index funds from reputable providers like Vanguard, Fidelity, Schwab, or BlackRock. Key considerations are the spending rate and the equity-to-fixed income allocation.
• The 4% Rule and Inflation: Bill Bengen's 4% rule originally used the Consumer Price Index (CPI) for inflation adjustments. While CPI is a reasonable measure, the actual spending rate and individual circumstances are more critical than the specific inflation number used in the model.
• High Yield vs. 4% Rule: A retirement portfolio yielding 6% does not negate the principles of the 4% rule. The rule focuses on the initial withdrawal and subsequent inflation-adjusted spending, not just the current yield, which can fluctuate and may not keep pace with inflation or preserve capital.
• Annuities vs. Treasuries: Multi-year guaranteed annuities may offer higher yields than comparable Treasuries, but Treasuries are backed by the U.S. government, making them safer. Annuities carry insurance company risk and typically involve surrender charges for early withdrawal, making them less liquid.
• High-Yield Savings vs. Bonds: High-yield savings accounts can be viewed as short-term, demandable bonds. While they offer flexibility and competitive rates currently, their rates can change, unlike fixed-coupon bonds. The choice depends on the investor's need for liquidity, yield stability, and risk tolerance.
• Bikram Yoga: The speaker finds Bikram yoga (a form of hot yoga) beneficial for balance, strength, and its meditative quality, despite the challenging hot environment.