Sat Jul 06 2024, by Tyler Gardner

Investing $1 Million in Your 50s or 60s: Smart Strategies for Financial Independence

Here is exactly how I would invest $1 million if I were in my 50s or 60s. I'm Tyler, a former financial advisor and portfolio manager. Now I make financial content for free, so that you don't have to pay for it.

1. Remember the 4% Rule

Before I invest anything, I would remind myself of the 4% rule. We can usually be safe taking up to 4% of our portfolio for annual spending without eating too much into the principal. Unfortunately, $40,000 a year is just not gonna do it for me. So, I would invest 100% in stocks and look to live off of 8% to 9% annually.

2. Smart Stock Investments

To accomplish my first goal, I would invest $500,000 directly into stable dividend stocks like Verizon, ExxonMobil, or Johnson & Johnson. Alternatively, I could make it easier on myself and just put all of it into a dividend ETF like Schwab's SCHD. I would invest the remaining $500,000 in growth stocks like Tesla, NVIDIA, and AMD, to continue building my net worth. I'm 60; I'm not dead!

3. Adjusting for Cash Flow

If I ultimately decided I needed a higher cash flow to keep up with my extravagant purchases of white t-shirts at Target, I would simply reallocate some of my dividend stocks over to money market funds that invest in short-term and relatively safe US treasuries, currently returning around 5%.

If any of this is helpful, like and follow, and I'll keep trying to get you one step closer to where you need to be.

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