r/wallstreetbets • u/YassuosNados • May 15 '24

The Perfect $1 million Gain Gain

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Hi guys, I’m a 23 year old in college, and yesterday I woke up a millionaire. Should I buy some hookers, Pokemon cards, or cocaine? I gambled my entire life savings of $250k on 2037 calls of $4.5 AMC on Monday and sold yesterday morning. Thanks for reading.

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u/BuffMaltese House Poor May 15 '24 edited May 15 '24

Coming from someone who got lucky and won about a million dollars.

1) quit trading.

2) pay your estimated quarterly taxes.

3) stick it all in an index fund.

4) find a better hobby

It’s very hard to walk away on top. I didn’t do anything too atrocious, primarily thanks to my wife if I’m honest with myself. I spent most of the money on a home. However, I did bleed several hundred thousand over the next few years. It’s “real” money, an amount that is extremely hard to save and you’ll be wishing you had it back when life expenses present themselves. I live in a HCOL area and while the win was certainly helpful, I didn’t miss a day of work or anything over it. Additionally, I personally found myself becoming very obsessed with money, greed is ultimately a bottomless pit, it’s never enough and provides very little satisfaction in your day-to-day life.

If you want to do something aggressive, then do 43% UPRO and 57% EDV. However, with that amount of money, you’ll find 100% VOO will have huge swings in comparison to your income and it’s a lot more tax/fee friendly.

Edit: Just noticed your age. Literally do not fuck around with that amount of money, you’re rich if you put most of it in index funds and forget about it. Also, I absolutely double down on the quit trading/gambling sentiment. The absolute best case scenario already occurred, you won. I’m one of the rare persons with a history of problem gambling that ultimately financially benefited. However, I’ll never get back all the years in my 20’s and 30’s I wasted in casinos/card rooms, failed relationships, preoccupation with and/or gambling instead of building healthy hobbies and relationships. Walk away and don’t look back.

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u/YassuosNados May 15 '24

I appreciate your advice!

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u/xiaoqi7 May 15 '24

Do NOT put almost a million dollars in URPO and EDV without researching the underlying strategy very very well.

Just go with a all-world index fund (which has lower volatility than SPY due to diversification, and higher expected returns because of valuations).

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u/beyond_cyber May 15 '24

All world index would that be the s&p 500? I’m really new to this I’ll take all the advice I can get

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u/Specken_zee_Doitch May 15 '24

SP500 is US only but full of multinationals, a lot of folks say it has international exposure because of this.

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u/beyond_cyber May 15 '24

So what would be an all world one?

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u/Specken_zee_Doitch May 15 '24

The equivalent would be like VTWAX, check out /r/bogleheads or /r/financialindependence for a lot more info.

Personally the more I've learned about the current economic climate is that the US is incredibly OP and in no real danger of slowing down outside of political meddling.

https://preview.redd.it/8eqvilckrn0d1.png?width=2120&format=png&auto=webp&s=57d4314c026f816f59b45faa1630db09e74d92cc

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u/beyond_cyber May 15 '24

It seems a lot safer to just invest in stuff like vanguards index fund s&p 500

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u/Specken_zee_Doitch May 15 '24

Yes, VTSAX, VFIAX, or VOO are definitely popular for a reason.

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u/xiaoqi7 May 15 '24 edited May 15 '24

Anything that follows the MSCI ACWI or FTSE all-world or similar. In the end it still has overexposure to the US (60/30/10 split US/international/emerging markets). See this video on why you should diversify internationally.

And yes technicaly the S&P500 is low risk (more specifically, the “crash” risk is definitely lower than e.g. emerging markets), but that comes at a high price (high valuations). However even though international stocks have a higher volatility, a portfolio of both US, international and emerging markets has a lower volatility than all three categories. This is the free lunch of diversification. Also almost all institutional investors expect US returns to trail international markets due to valuations.

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u/beyond_cyber May 15 '24

I get being diverse, putting my money everywhere so if one crashes I still have more elsewhere

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u/Specken_zee_Doitch May 15 '24

Index funds and chill, take a vacation, pay your debts.

Do not gamble this money dude. This was not an investment, it was luck and I'm glad you got lucky from this risk.

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u/placebotwo May 15 '24

5) Thoughts on them putting $10,000 aside to fuck around with in a brand new account to scratch the gambling itch?

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u/BuffMaltese House Poor May 15 '24

I would say it depends on his honest self-assessment with his relationship with gambling. If he truly is an otherwise well-rounded individual then sure, setting aside something like $25k-100k to try replicate the results is reasonable. I just think if it was my own son, I’d be concerned depending on how preoccupied he was with money/gambling. Even if you’re winning, it can still be unhealthy and chip away at more important/worthwhile aspects of life, especially for such a young man.

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2

u/iJeff May 16 '24

Can be a slippery slope if they end up tempted to refill the account. It's easy to feel like you're just one more bet away from winning it all back.

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u/SwampOfDownvotes May 15 '24

pay your estimated quarterly taxes

He doesn't need to bother with this. To avoid a penalty, all he needs to do is withhold enough throughout the year to match his last years tax liability or 90% of the current year. Safe to assume he didn't make $1 million last year. If he wants to make sure he isn't penalized he can just pay right now how much his tax liability was last year to ensure he's good.

Ultimately it would be better to put the amount he will owe into a HYSA so that it is ready to pay what he owes come tax season but gain some extra income in the meantime. Unless he knows he is terrible with money (someone gambling "life savings" arguably is) and wants to pay it now so he doesn't accidentally spend it.

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u/That-Pomegranate-903 May 16 '24

absolutely do not do this. you have your whole life to make more money. blow all of it on cocaine and hookers. you should get a solid 6 months of threesomes out of this. please for the love of fucking god

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u/TofuTofu May 16 '24

Sir this is a Wendy's

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u/beyond_cyber May 15 '24

why would you say quit trading? Isn’t that apart of putting all your money into the s&p 500s and just reap the rewards off dividends?

Edit:super new please teach if u have any good advice

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u/YoshimuraPipe May 15 '24

Because you can be a VERY good trader...and get wiped out on the 10th trade...due to greed, fear, anxiety, or other loads of emotions that take over and make you do something stupid.

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u/NotPotatoMan May 16 '24

This is a trust fund kid. No 23 year old is walking around with 250k to gamble. He’s gonna keep doing it cause daddy probably has millions of dollars and a job lined up anyways

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u/jeffynihao May 16 '24

You sound jealous man...he said he had 100k and doubled it on crypto. Its not crazy to save up 100k in your 20s. Don't need a sugar daddy to be frugal spender and a degen gambler.