How to invest $1 million dollars (The million dollar portfolio)

If you clicked this article thinking “Jimmy reached the double comma club and his brokerage account is $1 million” then I am sorry to disappoint you, but that is not the case. 

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We’re far from it, slowly but surely I’ll get there :) 

HOWEVER, if $1 million were to be found in my brokerage account the next day (call the cops and financial fraud departments, because wtf is a kid my age doing with $1 mil and how did that money get there?) I’d allocate that money and make that bitch go to work! 

So, I decided to make an imaginary portfolio and tell you how much money each individual stock gets. Sounds cool, right? Well... thinking about it some more, it sounded really lame, because any blogger can just call out a random list of companies and say “this one, this one, and this one” and end the article. So I challenged myself a bit by having a set of rules. I can’t pick companies that I currently own or have previously owned. I also have to state my reason as to why I’d invest in it. 

Click here to view my live portfolio

and click over here if you want to see my monthly series on the stocks I buy

The companies that are out of the question

Okay, so, I can’t use any of the following listed companies since I either currently own them or have previously own them. (Please share this article since I went through the trouble of going through a lot of monthly statements just to make sure this list is accurate.) I also made a poor attempt to make this in alphabetical order, so don’t yell at me please if I do screw up. 

  • Apple

  • American Express

  • Amazon

  • Bank of America

  • Berkshire Hathaway

  • Chipotle

  • Cintas

  • Cisco

  • Coca-cola

  • Extra space storage

  • Freshpet

  • Groupon (Groupon was the only investment I facepalm every time I think about it, it was my first year investing man, cut me some slack)

  • JPMorgan Chase

  • Monster

  • Netflix

  • Square

  • Visa

  • Waste Management

  • Wells Fargo

I hope that’s it. OKAY time to allocate my million and tell you why

1. Microsoft  $175,000

OKAY listen, I had to settle with Microsoft! If I can’t buy Apple and refuse to buy Google or Netflix since they don’t pay a dividend, this once tech giant (that still somewhat is) will have to do. It has a strong quarterly dividend, their financials are good, I’m concerned about the immense amount of long term debt they carry on that balance sheet, nonetheless it’s a strong brand, and while it isn’t resilient during economic downturns, it sure has the sufficient amount of cash and assets to stay afloat during turbulent times.  

Microsofts diversified in terms of the amount of products and services it sells in comparison to other tech giants. It thinks; software, hardware, and services. In comparison to an Apple where they only focus on Hardware, just recently services (it has paid them off) but has yet to enter the cloud space.

2. McDonalds $125,000

I’m just here for the dividend really, revenues are declining or stagnant, other people are eating in alternative chains that are healthier, and McDonalds doesn’t have much room for growth in the following decades since it’s so big, unless they do some ballsy moves with their mccafe segment of their business to compete against other coffee chains.

But DAMN RIGHT I’ll take an annual dividend of $4.64 per share as of the day I’m writing it. This baby can compound and boost my net worth like a rocket ship.

3. Nike $125,000

It is said that Gen-Z is slowly gaining disposable income and the brand I see winning the most from that said disposable income is Nike. After Nike’s “Just do it” campaign, it certainly left a lot of the younger progressive generation with something super memorable that aligns well with their philosophy of a progressive nation. That is in fact, a successful and gangster ad.

Not sure why, but I can still recall the budweiser ads from the super bowl showcasing the Clydesdales, it probably struck me in some emotional way.

I digress…

Nike did the same, it is bound to continue being a strong company, overall a strong brand with a growing dividend, with plenty exposure in international markets. Only issue to look out for our costs in terms of manufacturing their items.

4. Mastercard $100,000

If you restrict me from investing in Visa and American Express, then Mastercard will have to do. Why not Discover? Mastercard is the second largest company in terms of market share when it comes to the credit card and payment processing business. It’s a very fierce competitor against Visa who has plenty of growth in international markets. International penetration that Discover has yet to achieve, making more in profits than Discover, and is an overall stronger brand.

It has $0 in short term debt, plenty of long term debt, however, a strong balance sheet full of assets.

5. Nvidia $75,000

A chip company that will certainly have a large part in the crypto currency mining craze, and blockchain tech, the functionality of autonomous cars, as well as esports. Nvidia creates said chips for pcs and gaming pcs. The same chip manufacturer can be found in Teslas (and potentially other vehicles that are self-driving.) Crypto miners utilize powerful processors to mine for their cryptocurrencies. If you ask me, Nvidia certainly has a bright future ahead.

No short term debt, debt to asset ratio is at 0.30 which is REALLY good, this company isn’t running on debt, cash and cash equivalents have just skyrocketed over the past 4 years, I love Nvidia.

6. Alibaba $70,000

The Chinese amazon. I certainly think that Alibaba will dominate in America and overthrow Amazon if it were able to either 1) open warehouses in the U.S or 2) figure out how to expedite shipping overseas to get goods over to the U.S. Alibaba is also involved in cloud services, fintech, marketing, ads, and media. In other words, it’s well diversified. While Amazon is also involved in the same businesses, it’s not so much involved in fintech or payment processing.

Alibaba has been profitable far longer than Amazon has and makes far larger profits than Amazon.  

7. PayPal $70,000

PayPal is making deals left and right with payment processing companies, e-commerce businesses, it continues to improve their Venmo app. PayPal is bound to be a clear winner in the fintech space.

8. Planet fitness $68,000

This thing is LOADED with debt, however, Planet Fitness is furiously franchising their brand and requires the franchisee owners to replace gym equipment every 5 years, sold by the corporation itself, so it’s not much of a concern to Planet Fitness themselves to worry about using capital to purchase new equipment, it’s the franchise owner, the only thing Planet Fitness is concerned about is manufacturing the equipment. A good growth stock to have in the portfolio.

9. PNC financial $68,000

Boring bank, flat revenues well above $14 billion year after year, net income of $4 billion or more year after year, a very good profit margin if I do say so myself. AND PNC HAS HELLA ASSETS AND CASH FOR DAYS.

10. Southwest Airlines $64,000

So much love for this airline, their assets to liabilities ratio is 0.56 which is good for the most part, constant increase in revenues and profits year over year. Their flights are cheap so we know their main targeted clients are middle class Americans. Which consists a large portion of America.

The only issue is fluctuating costs with oil and maintenance on their planes. 

11. Clorox $60,000

Everyone needs their cleaning supplies no matter what the overall macro economy is doing. I hate their financials overall, but Clorox is here to last till the end of times.

Disclaimer, while this article consisted of stocks you could purchase for $1 million and did not talk about other investments you can place your $1 million towards, just be aware there are other assets you can place your money towards that do not have to be paper assets.

It might be another article for another day? ;)