|
I'd start with 10k inflation adjusted personal Series I savings bonds from the US treasury, which pay quote a bit more then any available CD in terms of APY, and have a 3 months interest penalty for 5 years after purchase. I'd probably wait until after april 30th, since the fixed rate interest rate on them is currently zero but will hopefully go up. You don't pay state or local taxes but you do pay federal taxes. That leaves 490k. I'd put 100k into wealthfront, so they will use individual stocks instead of etfs for tax loss harvesting. I'd take 90k and invest it in AA or A rated municipal bonds, if you are in a state where gains are tax free, creating the beginnings of a bond ladder. We expect the fed to raise interests rates 3 times next year so I'd probably split this 15k for the first raise, 25k for the second raise and 50k for the third raise. if I have a 401k I'd invest the maximum 18k in 2016 and contribute the 18k in 2016, making purchases immediately after interest rates go up in dividend stock etfs, reit etfs, broad market etfs, and a small cap etf. Likewise 5500 each ear for an ira, or possibly a roth IRA, depending on current income levels. I'd save 153k in a savings account like synchrony bank with 1.04 apy interest. Part of that should be a year's expenses, the rest used to purchase stock in solid companies if the market crashes. I'd want to adjust this after a market crash year. Then I'd split 300k into 100k for a broad based index etf, 50k in a small cap etf, 25k in a midcap etf, 75k in a large cap etf, 25 k in a bond etf. I'd spend 5k on individual stocks using a robinhood account, so I could get a feel for the market. The remaining 20k would be for taxes on any dividends, idly playing the market so I wouldn't touch the bigger investments, and an emergency fund, again placed in a synchrony or equivalent savings account. |