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Secure investing – Big investors portfolio examples

3 ways of secure investing

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You may have inherited, won a settlement or a lawsuit, or saved patiently for years: how do you securely invest a large amount of money, especially if you have not had the responsibility of managing such large amounts?

Fortunately, some instruments offer you security and profitability. It all depends on the objective you have for the resources.

Investment alternatives for large amounts of money:

  • ETFs and index funds
  • Permanent investment portfolio
  • Life cycle portfolio
  • Real estate investments
  • Businesses in which you have extensive knowledge and experience.

To dig deeper, we will answer the question about secure investing large amounts of money using three points of view:

  1. My experience with hundreds of ETFs and index funds.
  2. Examples of the investment portfolios of the most qualified and successful entrepreneurs and investors.
  3. The study of your strengths and knowledge

Before investing (especially in large amounts), it is important to know your situation.

There are questions that should be answered before selecting the best investment alternatives:

Do you know exactly how much you are going to invest?

It seems like a basic question, but after advising many individuals and families, I can tell you that 95% of them did not know their situation in detail before they started advising.

If your fortune comes from an inheritance or litigation, do you know how much you will have to pay in taxes? Do you know how much you will have to pay the lawyers? You must check this and subtract it from the original amount.

How much do you need to live on?

I advised a gentleman of a certain age, who had always lived on rather light means, to say the least. Around the age of 65, he received a large sum of money and naturally decided to increase his standard of living. Calculating his average expenses, his fortune would last about 10 years at most, maintaining his rate of spending.

This situation is not sustainable. It is important to establish the amount of money you require to maintain the standard of living you desire, and adjust it, if necessary. Ideally, the annual returns on your wealth (discounting inflation) should be higher than your annual cost of living.

What is your objective with this large amount of money?

In some cases, such as the 65-year-old man, the goal is to preserve wealth. In other cases, the objective is to use the resources to build a business or create a fund to finance a foundation. Each case is different. The distribution of your portfolio depends on your objective.

investments goals for 65+

Do you know how to manage money?

This is what I mean: Do you have enough knowledge and experience to study and make the decisions by yourself, or do you prefer to hire a professional? In the second case, I recommend you read the article on advisors, planners, and coaches, where we tell you what each one does and how to know when you need one.

At this point, I invite you to write down your answers and then continue with the investment options

Index Funds and ETFs

ETFs are investment instruments that allow you to invest in portfolios of stocks, bonds, commodities, real estate, and almost any asset imaginable. This flexibility means you can configure your portfolio to either hold or grow, according to your risk appetite and level of knowledge. Read more about Index Funds and ETFs in this article.

If your interest is to protect your wealth, one of the best alternatives is a permanent portfolio, which is made up of stocks, bonds, cash, and gold in equal fractions, as indicated in this summary.

If you are interested in growing your wealth, you can set up a life-cycle portfolio (Burton Malkiel, A Random Walk on Wall Street) with a percentage in stocks (say 30 to 60%) through ETFs such as VOO (Standard and Poor 500), VCR (Vanguard Consumer Discretionary) or VGT (Vanguard Technology Index).

The rest is in corporate bonds and federal reserve bonds. Experts like Malkiel suggest that the percentage in bonds should be similar to your age. That is, if you are 40 years old, 40% of your assets should be in bonds. At 65, 65%.

The reason for this is that high-quality bonds and Federal Reserve bonds tend to weather downturns much better, while stocks tend to grow in economic booms.

Some of the most striking advantages of ETFs and index funds are:

Maximum diversification, low risk.

Minimum cost. The management cost percentage can be between 0.1 and 0.5%. Far from the 2% to 3% of the very expensive pension funds.

Liquid. In most ETFs, the sale can take a few hours or a few days. In some cases, it can take up to a couple of weeks, which we consider very liquid.

Safety: Mutual fund managers such as Black Rock and Vanguard manage billions (equivalent to trillions) of dollars; they are known as serious and well-managed companies.

Note: We do not recommend investing in individual stocks unless you are very knowledgeable. Investing in stocks through ETFs reduces the risks associated with individual stock selection because of diversification.

What billionaire entrepreneurs and investors invest their fortunes in

Below you can see the stock investment portfolio of great tycoons: Bill Gates, Warren Buffet, and Jeff Bezos , as well as some comments on the concentration of their fortunes.

Bill Gates, Founder of the Bill & Melinda Gates Foundation

The co-founder of Microsoft is one of the largest shareholders, holding 1.36% of the shares as of the date of publication of this article. This equates to more than $22 billion (at current market capitalization value).

The following is the distribution of his stock portfolio:

bil gates portfolio

Warren Buffet, CEO and shareholder of Berkshire Hathaway.

According to, Warren Buffet owns a significant percentage of the Berkshire Hathaway conglomerate: about 16%. That is, approximately $84 billion. Warren Buffet’s investment portfolio is extremely concentrated on one stock.

The following is the distribution of his stock portfolio:

warren buffer portfolio

Jeff Bezos, CEO of Amazon

Jeff Bezos’ investment portfolio is highly concentrated: He owns approx. $100 billion in Amazon. In addition, he owns a huge portfolio of Amazon-related companies.

What to invest large amounts of money in, depending on your area of expertise and knowledge.

When reviewing the investment portfolios of the three tycoons, it is striking to note the high concentration of their investments in the companies they founded, respectively Microsoft, Berkshire Hathaway, and Amazon. This means that these tycoons consider their companies to be the best destination for their immense wealth.

Keeping proportions in mind, it is useful to use this same logic in our particular cases. You may not have found a software company or an industrial conglomerate, but you probably do have experience in a certain business or industry.

By knowing a business or economic sector more closely, you have more information than the average person about the opportunities that present themselves, as well as the risks to avoid.

For example, if you have experience in real estate, you will have a much deeper perspective on real estate investments than a person like me who has worked in the pharmaceutical sector.

What if I have no experience in any sector

Knowledge is the source of many fortunes; whatever your current situation is, invest some of your money in preparing yourself. Take courses, hire competent coaches and advisors, and learn how different investment alternatives work.

In this article, we list 10 books useful in your preparation to manage the large amounts of money you have the responsibility to protect and grow. As you prepare yourself you can use a permanent portfolio to protect your wealth while acquiring more and more knowledge to take more risks in search of more profitability.

Conclusion: how to invest large sums of money

ETFs and Index Funds are very flexible, low-cost instruments that provide great diversification and security.

A permanent portfolio is an appropriate strategy to protect capital.

A life-cycle portfolio allows you to expose yourself to greater risk while maintaining a conservative position with corporate and Federal Reserve bonds.

Great entrepreneurs concentrate a significant portion of their wealth on the companies they create or manage.

The knowledge and experience of each individual are key to allocating a significant portion of wealth to the sector, business, or company that is most deeply known.

Preparation is the key to creating value and finding opportunities to grow wealth and build an investment portfolio designed for each investor. Be prepared and study continuously.

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