What to do with a large sum of money?


I’ve been asked this by a few people and the underlying question is, if I currently have a decent stash, after all debts are paid off, and want to invest after my tax friendly accounts have been funded, should one wait till today’s market pulls back some before investing all of it into their index funds or just keep stashing ala dollar cost averaging or dump all at once?? My advice is to keep it simple and keep stashing in low expense ratio index funds, to include a decent distribution that falls inline with the typical splits for more aggressive to conservative investing tolerance given a person’s current stage towards retirement. I myself am still up in the air with DCA. What say you Rockstars!?!?


I suppose it depends on how large the sum is. Personally, every month I throw all my excess money into VTSAX despite what the market is doing that day. Now, if it is super large then my inclination would be to buy a piece of real estate but that’s just me and certainly not the answer for everyone. I think many would agree not to try to time the market. Just get the money in and let it work for you. :slight_smile: Now, where can I find a large sum of money for myself…?


Ask yourself “What’s important about money to you and why”. Then ask why your last answer is important to you. (Maslow hierarchy of needs).
Get your foundations right before you do anything else. It’s your money, your life and the choices you make will not only impact you but those around you.


Each person’s answer to this question will be different. I own individual stocks because I like searching for undervalued companies, but as the market has risen, I’ve reduced some positions, and let more cash build up than usual. I’m not overly worried about a pullback because most of my stocks pay dividends between 2% and 8%, but I want to have some cash on hand in case either individual stocks or the market in general seriously retraces. FWIW, Buffet and Munger do the same thing.

If I suddenly received a large sum of new money, and I wasn’t already a long-time investor with a lot of experience and knowledge, I’d take a while to study all of the various investment alternatives. The market has risen for nine years without a serious pullback, and the low interest rates may have artificially created a new bubble in the market. This has happened several times over the last two decades. When the high-tech bubble burst, everyone rushed into housing. People decided to put their money into something physically tangible that they thought would retain its value. The shift into housing created a different kind of bubble, and after that bubble burst, money shifted into the stock market and foreclosures. Many serious investors now suspect that the market is once again exhibiting “irrational exuberance,” and they’re either hedging their bets or reducing their exposure. If I decided to put money into an index fund, I’d “layer” my way in. IOW, I’d establish a modest position, and then wait before adding to that position. In the same way, if I decided to buy some CD’s, I would only buy 12 month CD’s, and wait to buy more every six months or so. That’s because the Fed is raising interest rates, and CD rates usually rise in tandem.

Someone who thinks like an investor is always looking for something that appears to be seriously undervalued, and although a few (very few) individual stocks may be seriously undervalued at this time, the market in general is not. Whether it’s fairly valued or over-valued cannot be known until later, but I don’t know anyone (including many successful investors) who thinks that its undervalued. Just my two cents.


I agree with others that it really is an individual circumstances. I think most people should do DCA based on your AA over 12 months. For me, it’s individual DGI stocks or building up cash for a real estate transaction, because I’m actively trying to build up passive income.


Liquidating your real estate. :smiley: I kid…


When I sold my real estate, which was the source of my big chunk of $$, I threw it all into Betterment. I decided I didn’t like Betterment, so I DIY’d and eventually I allocated differently.

If you really don’t have a clue and don’t want to worry about, consider Vanguard Personal Advisor Services. Whatever they recommend is going to be good enough for most people.


for me, 100k, 200k, 500k - if I got it, I would put it directly into my taxable account and purchase VTSAX. no question… no hesitation… :slight_smile:


I subscribe to a what price and on what terms - so I don’t like to overpay and will wait for something that makes sense to my simple mind but only for individual stocks I pick up (which I do solely for alignment of value reasons - I expect and am ok with doing worse than the market on average).

Timing, on the other hand doesn’t have a great track record. The difficult question is this;
What pull back prices will you invest in it - a ten percent drop, a twenty percent drop? A fifty percent drop?

It is very possible that the market might drop 9% in a big correction and never hitting your buy price and then go sideways for 12 months and then go up 400% over the next 15 years. Where would be the buy point?

The challenge here is that the moves are very sudden and there isn’t time to “get in” because after all, you have to buy from someone on the other side of the trade who isn’t going to give away money unless they need to sell for a purchase or as part of a normal withdraw.

I find this article on the affects of missing the top 25 days each decade has on a portfolio.


2/3 of the time you will come out ahead if you throw it all in at once. You have to remember that the market has gone up over the last 100 years and so you are usually buying at all time highs regardless of the time.
If you can live with the odds that you have a 2/3 chance of making more money by going all in and if it goes down you have the opportunity to dollar cost average and save some taxes then go all in. If you can’t live with it divide the sum by 12 and take a year to put it in.


Agreed - Vanguard has done research on this in the past. I just bite the bullet and put it all in. If it’s a windfall, though, then I follow the rules for a windfall and wait for a period of time to let it “cool off” in a savings account so I don’t make a poor decision.



Getting the obvious out of the way… it depends on so many factors such as what you are trying to accomplish, your timeline, your risk tolerance, how close you are to your goals, the size of the large sum, and on and on.

Answering for myself:

If this large sum of money is enough, let’s say a loved one passes away and leaves $2M in life insurance, I think I would be all aboard the wealth preservation train and not worry so much about building additional wealth. I’d probably put 25% into stocks and 75% into CDs, T bills, and savings accounts. I would sell all or most of my property as a liability mitigation strategy.

For non-life changing amounts of money (and events), I’m a fan of using debt as leverage to fund cash-flow. While I’d set a little aside, I would use the majority of the money as a 25-30% down payment on an apartment building, likely in a city in the mid-west / central US. I would certainly take my time and not rush into a purchase, though.


I think it is necessary to invest your large sum of money wisely to have a good return.
There are numbers of investment plan in market you could choose and in my way you always have the opportunity to get better return from investment plans where risk are high comparatively lower risk invest. For example investment in schemes like Fixed Deposit will be result in no risk with medium return, while investment in Crypto currencies can provide you the higher return but here the risk are high, no doubt.
So a wise decision is necessary if you want to make your large sum of money, larger than now.


If you have huge amount of money then I would say you can invest in the cryptocurrency which gives you lot of source of new income earning platform.I have found some of the Cryptocurrency Blogs which are also showing the importance of investment in cryptocurrency for good earning.