Prepare the Cake
Preheat oven to 325°F (163°C). Grease and flour a 10–12 cup bundt pan.
In a medium bowl, whisk together flour, baking powder, and salt.
In a large mixing bowl, cream the butter and sugar until light and fluffy (about 3 minutes).
Beat in eggs one at a time, mixing well after each addition.
Mix in vanilla extract.
Alternately add the dry ingredients and the milk to the batter, beginning and ending with the dry ingredients.
Stir in the rum until fully combined.
Pour the batter into the prepared bundt pan and smooth the top.
Bake
Bake for 55–65 minutes, or until a toothpick inserted into the center comes out clean.
Remove from oven and let cool in the pan for 10 minutes, then invert onto a wire rack.
Make the Rum Glaze
In a small saucepan, melt butter over medium heat.
Stir in sugar and water, bring to a boil, and boil for 5 minutes, stirring constantly.
Remove from heat and stir in rum and vanilla.
Glaze the Cake
While the cake is still warm, poke small holes all over with a skewer or toothpick.
Slowly pour the glaze over the cake, allowing it to soak in. You may need to do this in layers.