I'm a computer programmer who got in early it a successful internet company.

My business is entering a transition period and I'm not sure if I'll be making the same income for much longer. I'd say I have a 70% chance of my continuing business going well. If not, then I'd like to take my savings and opt for an early retirement and freelance work to keep me busy.

My question is about what I should do with my savings? I've been investing with Bank of America, Franklin Templeton, and American Funds for about 10 years. The money is in various diversified mutual funds and bonds. I don't get involved in the specifics of which funds to buy or which bonds. I just make sure each person I work with knows he is being compared to other investment managers. I have fairly low management fees (around 1%).

Is this a safe place to store my nest egg, and if not, what other options do I have?

Thanks in advance.

  • How do you define "safe"? Do you mean guaranteed x% return? Do you mean the firm isn't corrupt and therefore likely to steal from you?
    – Alex B
    Commented Jan 7, 2011 at 16:13
  • And are not your funds held in a client account separate from the money managers. Commented Dec 26, 2013 at 17:56
  • I meant "safe" as in are they a smart place to store most of your nest egg, or are they something that most wealthy people know to avoid?
    – Gattster
    Commented Dec 27, 2013 at 21:42

6 Answers 6


Unless and until you are ready to do the ground work and get your hands dirty in the market, it is better to let the money where it is. But how to distribute money in which asset classes, industry etc is your choice to make.

But remember that a big investment company doesn't guarantee that you will always earn a return higher than the market or it is safe with them. They are also bound to make mistakes and go bust, but it would be quite rare for companies, with billions of assets because they have strict checks in place and invest with extreme caution and proper research.

One option is to try dabbling in the markets yourself, slowly, not everything at once. You will learn a lot and there are loads of information on the net and books in stores which could get you started. You will need to do a lot of groundwork to beat the market. That is difficult but not impossible. People have done it time and time again and they have put in hard work to do so. And I don't see with a little bit of work and time, why you shouldn't be able to do that, unless and until you are lazy and don't intend to do it.


Is it safe? No in general. Are there any other safe "paper" ways to invest money let's say for 30 years and be sure nothing will happen to them and you will end your life without relying on pension? No.

In these times only real properly gives you some sort of warranty in 5-30 years term. Land, buildings, production lines. Not necessary in US - lots of countries have 0 or fairly low property tax. Some gold, platinum, silver and other rare elements to diversify. - This is the only way you can be sure you will not suddenly loose everything.

  • Thanks for posting. I've been wondering when someone would post something like this, and it's this kind of concern that lead me to post the question. I'm curious how many other members agree with this? I'll wait and see how many up-votes this gets.
    – Gattster
    Commented Jan 6, 2011 at 4:03
  • @gatt Nothing is safe, really. There is something to be said for owning land and precious metals. However, both entail their own set of headaches. Commented Jan 6, 2011 at 7:16
  • @George surely, there is a lot of pain. But it's harder to loose everything at once. Commented Jan 6, 2011 at 7:25
  • 2
    @bars Investing in real estate in a foreign country can be a great way to lose everything suddenly. (Foreign investors are juicy targets for scams in this scenario, not to mention political risk.) Meanwhile, most people do not realize that investing in precious metals involves more than just transaction costs. I am not saying that these ideas are invalid. However, they are likely not the best options for someone interested in a more hands-off approach. (Well, the investing in precious metals can be, but it incurs a recurring cost like property tax.) Commented Jan 6, 2011 at 10:04
  • @George No single way is valid. For long term it should be heavily deversified. Commented Jan 6, 2011 at 15:21

I can only give you advice on what I would do if I was in this situation:

  1. As mbbhunter mentions above, the first question you have to ask yourself is how much time do you want to spend to manage your money? The more money you have, the more money you can possibly make by becoming educated in investing (e.g. if you can increase your return on investment (ROI) on $500,000 1%, it does a lot more than increasing your ROI on $50,000 by 1%.

  2. If I was you, I would either track my investments myself or ask an accountant (or a fee-only financial advisor) to determine 3 things:

    • Your overall interest rate of return (IRR) per year vs the S&P 500
    • Your overall asset allocation
    • Your overall gain (% increase) since investing inception vs the market.
  3. After you learn this information, go about deciding how much $ you want to manage yourself (this can be 50%, 20%, or 0%), start reading the Motley Fool if you want to invest it yourself, and invest the rest in a low cost account like Vanguard with your desired asset allocation (whatever meets your comfort zone).
  4. Every 1-3 months, rebalance your portfolio and see how you do vs the index funds

At the very least I would spend some serious time getting educated about your newfound wealth. Good luck and if you find a need for additional computer programmers at your company dont hesitate to let me know ;-)

  • Another great answer. Thanks so much. It seems I have a lot to learn!
    – Gattster
    Commented Jan 5, 2011 at 3:24

You don't say what kinds of mutual funds, or what bonds.

You don't say how old you are.

You seem to have enough cushion to strike out on your own comfortably. This is good.

Compared with Vanguard's management fees, the fees you're paying are pretty high.

The bottom line of what to invest in rests with you. If you outsource it, it's still your money. The managers get paid whether you make money or not.

You have lots of other options: real estate from a distressed seller, commodities, currencies, websites, or other things where you have a knowledge advantage.

For the time being, though, if you're concerned about your main income stream, I wouldn't get terribly risky with your money. Cash is just peachy in that case.

  • Thanks for the answer. I did forget to mention my age, which is 30.
    – Gattster
    Commented Jan 4, 2011 at 17:41
  • Cash is a loser investment for anything other than emergency funds you will be losing value due 3% or more to inflation. Commented Dec 26, 2013 at 17:58

Having more money than you know what to do with is a good problem to have. :) Congratulations on your early retirement!

I'd say this is a good time to start learning about investing, because nobody will look after your money as well as you will. Fund managers and financial advisers may mean well, but they are just salespeople, paid commissions to promote their employers' products. Not that there's anything wrong with that; it's just that their interests are not aligned with yours. They get paid the same, whether you make or lose money. If you want to live off your investments you must invest in your financial education.

  • To get educated, would you recommend reading the motley fool as CrimsonX mentioned? Any other recommendations?
    – Gattster
    Commented Jan 5, 2011 at 3:26
  • Despite the name, the Motley Fool is a good source. :) Also check out seekingalpha.com.
    – alekop
    Commented Jan 5, 2011 at 19:54
  • As for books, I recommend the Rich Dad, Poor Dad series by Robert Kiyosaki, The Road to Wealth by Suze Orman, The Lazy Investor by Derek Foster and Warren Buffett and the Interpretation of Financial Statements by Mary Buffett.
    – alekop
    Commented Jan 5, 2011 at 20:03
  • I woudl add the intelligent investor by buffet - hes the guy that taught warren buffet all he knows Commented Dec 26, 2013 at 17:59

All of our paper ways are safe; if they go away this society has much bigger problems than what your retirement account is worth.

I more or less understand the idea of being backed by the full faith of the government to mean that the government will be around for my entire lifetime.

It is my opinion that everybody who suggests we invest in gold, whiskey, nickels (or to a lesser extent real estate) because the value of money is going to go away, are interested in survival in a Mad Mad apocalyptic world. I very much doubt we get there, and if we did everybody who planned for it wasted their time.

Therefore, invest in the traditional methods that are frequently discussed here. Then invest in our society, then make sure you vote from a learned position to keep our society on track with sensible leaders who are above reproach.

  • 1
    I don't think it will be like Mad Max at all - although that would be cool as hell. Government currencies have been going bust for all of history (en.wikipedia.org/wiki/Hyperinflation) and it has not resulted in a Mad Max world. I think the US dollar bust will be similar to Argentina - bank shutdowns, limited withdrawals, and rapidly rising prices (themodernsurvivalist.com/?p=871, themodernsurvivalist.com/?p=435). But by all means keep your money in the bank - you'll have millions of depreciating dollars sitting in a totally unaccessable bank.
    – Muro
    Commented Jan 7, 2011 at 14:00

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