Close to what I'd do. I'd first consult an expert about asset protection, then get a modest house and a different-city apartment, and then put everything remaining in three index funds (ITOT, IXUS, and a little AGG, or equivalents).
https://seekingalpha.com/article/4423498-berkshire-hathaway-...
none of the bogglehead investment advice claim that it's not possible to beat the market - the claim is that it's hard, and if you're average person (and face it, most people are average people), the best advice is to do what is more likely to succeed, rather than the small chance thing that might succeed beyond your wildest dreams.
Therefore, the best advice for the average person is to buy index funds, rather than follow the path of Buffet.
Since 2008, BRK is just keeping up with SP500, and even that seems to be due to outsized bets on Apple, which offset earlier mistakes of not investing in Apple, Microsoft, Alphabet, Amazon…and instead going with IBM/Heinz.
That is a lot of risk for no gain over 15 years. Obviously, Buffett is playing with money he can afford to lose, but he is smart enough to advise others who cannot afford to lose to invest differently.
https://dqydj.com/sp-500-return-calculator/
https://dqydj.com/stock-return-calculator/
Dec 2007 to Dec 2022 is 8.86% for SP500 vs 7.99% for BRK-B.
Dec 1997 is 7.7% for SP500 vs 10.57% for BRK-B.
BRK even provides this information by year in their annual report on page 2, and the all time record is BRK at 20% versus SP500 at 10%:
https://www.berkshirehathaway.com/letters/2021ltr.pdf?mod=ar...
Of course, I should not debate that it is possible to beat the market, but the question for an individual is, is the potential return over the relatively risk-less SP500 worth the risk? And the data for the past 14 years or so indicates that BRK’s edge may have decreased.
I write “relatively risk-less SP500” because on a sufficiently long timeline, I assume US federal government is bailing out SP500, or the US federal government has big problems (such as does not exist in the form it is in now).
The book, first of all, does a good job of laying out the complete case for why index funds beat human managers, starting out by telling the story of an investor who made that very bet (literally), who ironically most people would put on the other side of that: Warren Buffett. Buffett bet a fund manager that an index fund would beat the best of any funds his opponent would select. A decade or so later, Buffett was proved right and declared the winner.
https://www.advisorperspectives.com/articles/2017/11/13/ted-....
If even Warren Buffett is betting on index funds as beating active investors, why are most people so reluctant to?
But besides that... why are index funds - which you can also think of as 'fully automated/computerized investing' - so effective?
There's a few reasons, but a really simple explanation is: over time, a bunch of fund managers are just going to recapitulate the market, and the advantage computers have is, they can duplicate that functionality but their fees are zero (or 0.001% per year, whatever is the tiny amount it costs to run the servers). Human fees are not zero. Therefore, the computers win.
Another one is just that the whole market, diversified, ends up being the best hedge against... everything. Is Elon Musk a genius one day, and now getting pilloried as an idiot as the head of Twitter? If he's a big part of your portfolio, and you bought in a year ago, that really hurts. When you hold the whole market following impersonal computer rules, you are insulated from this.
And it turns out, when you look at the full impartial record of active investor picks, it's pretty poor really.
A final thought that book suggested to me: if you have over 10 million dollars, you probably can't beat what the market can do. Wave the white flag and throw it all in an index fund. The computers have won, and just as we acknowledge that with chess and Go (art's probably next), index funds are an extension of same.