I'm looking at my finances

[MojoMan]

If I"m willing to go with moderate risk (say a 10-20 year horizon), where would you put your post-tax $?

 

My retirement is in one of those "year you retire" funds.

[detlef]

If I"m willing to go with moderate risk (say a 10-20 year horizon), where would you put your post-tax $?

 

My retirement is in one of those "year you retire" funds.

We're starting to buy investment property. Right now, we're looking at doing it one of two ways.

 

1) Take the plunge and be a landlord

2) Being "the bank" and getting 6% on money that is pooled with others to finance some local guys who are buying, upgrading, and managing properties.

[MojoMan]

We're starting to buy investment property. Right now, we're looking at doing it one of two ways.

 

1) Take the plunge and be a landlord

2) Being "the bank" and getting 6% on money that is pooled with others to finance some local guys who are buying, upgrading, and managing properties.

 

Yeah, I know that passive income is a good way to go but I have my doubts about being a landlord (I can fix a house as well as Puddy can fix a flat) and if I have to pay a pro for every repair...goodbye profits.

 

Option 2 sounds interesting.

[Furd]

1) Take the plunge and be a landlord

 

If you are taking about picking up the odd residential or even small commercial property, I don't know anyone, personally or professionally, who has found this to be a worthwhile or profitable endeavor.

[Big Country]

If I"m willing to go with moderate risk (say a 10-20 year horizon), where would you put your post-tax $?

 

My retirement is in one of those "year you retire" funds.

 

 

1. Do you have a minimum 6 month emergency fund built up?

2. Are you maximizing any 401K or other employer based retirement account (457, etc.) you may be eligible for?

3. Are you contributing the max for you and wife to a ROTH IRA?

4. Have you established a 529 plan for any children?

5. Do you have any outstanding debt (mortgage, car loan, student loans, etc.)?

6. Are you planning any major purchases in the relative near future (ie home ,car, etc.)?

 

Really, in order to completely answer the question adequately would require disclosing more personal information than you'd want to do on a public forum, but some basic general suggestions could be made based on the responses to the above 6 questions.

 

Also, for full disclosure, I am in no way a personal finance professional, only someone that has taken an active interest in my own personal finances thus done quite a bit of looking into various options. I am generally far more conservative than many would say is necessary for my age, but willing to take some financial risks.

[detlef]

If you are taking about picking up the odd residential or even small commercial property, I don't know anyone, personally or professionally, who has found this to be a worthwhile or profitable endeavor.

I have some friends, locally, who are doing pretty well with it. That said, I'm leaning towards option #2 and banking some guys around here who are basically contractors doing the same.

[Brentastic]

If you're looking to buy stocks, which I do NOT recommend for the most part. However, there are a few long-term buys out there, imo. I like AK Steel Holding Corp (AKS) at any price under $7 a lot especially if your time horizon is 20 years. Right now it's at $7.88 but got as low as $5.51 just last month and will probably see sub $7 again soon. It could easily go lower than $5 in the coming months/years but the tangible asset value of AKS is $5.38 - which means you're getting the stock price at the same value as it's tangible assets. Stock prices are irrational more often than not, so if you can buy a stock at it's book value, you're getting a super good deal. It allows you to ignore the irrationality of the moment. There aren't too many stocks you can find at that bargain and since your time horizon is 10-20 years, this stock is an ideal buy-hold under $7 (and preferrably closer to $5 if you can remain patient). The typical rule is to allow yourself a 30% premium over the tangible asset value which is why my sub $7 price point is relevant. Anyways, just a stock to keep your eye on for a larger ceiling in the coming decade(s). Before the crash in 2008, this stock got as high as $73 per share and now it's under $8. Be patient with it and buy it in the $5-$6 range and you'll be getting a steal for a long-term hold, imo.

 

Other than that, I'll maintain my recommendation of being long the USD (US dollar). It's climbing and should climb well over $80 in the coming years and probably approach or surpass $90 in the next 5-10 years. Right now it's hovering around $78.

 

Avoid: Gold, silver, equities, bonds, money markets or any other "fund".

Edited November 21, 2011 by Brentastic

[MrTed46]

If you are taking about picking up the odd residential or even small commercial property, I don't know anyone, personally or professionally, who has found this to be a worthwhile or profitable endeavor.

 

around me it's very profitable

[paulzale]

We're starting to buy investment property. Right now, we're looking at doing it one of two ways.

 

1) Take the plunge and be a landlord

2) Being "the bank" and getting 6% on money that is pooled with others to finance some local guys who are buying, upgrading, and managing properties.

 

Both 1 and 2 can be lucrative. My financial planner posed the question to me, do you want another job that you get called to during dinner? After thinking about it we went with option 2. We have interest in commercial properties and residential in 2 different "funds". Doing pretty decent, not beating the market during up years, but well ahead of the curve in the sideways or down market. The drawback is that you tie your money up for a year at a time, but a little more flexible that actually purchasing property on your own.

[BeeR]

For the moment I have a big chunk sitting in a money mkt which is a joke of a return (1-2%) but at least not losing. Long term I still think stocks are the way to go as they have always been but when to plunge is my concern. This would seem to be a massive buy-cheap time but it looked that ways years ago and if I had followed my plan/pattern, a (generally) logical of hi/med/low cap with some internationals and specialties mixed in, I'd have lost even more than I already have thx to investing aggressively. sigh

[Big Country]

For the moment I have a big chunk sitting in a money mkt which is a joke of a return (1-2%) but at least not losing. Long term I still think stocks are the way to go as they have always been but when to plunge is my concern. This would seem to be a massive buy-cheap time but it looked that ways years ago and if I had followed my plan/pattern, a (generally) logical of hi/med/low cap with some internationals and specialties mixed in, I'd have lost even more than I already have thx to investing aggressively. sigh

 

 

Just curious, but where do you have a money market that is returning 1-2%? Would love to get access to a money market returning that much.

[Avernus]

I know Brent said to stay out of gold, but it's gone up for over a decade every year. I have sold all of my gold a couple of months back and still have my silver in hopes for a better return in the next 6-9 months without holding my breath.....but I'm not sure I would invest in silver - gold just has a strong track record and will continue to do so as long as people lack faith in paper currency which seems to be the trend anymore..

 

I would probably look into buying houses and flipping them in largely populated areas...imo the housing market should go up due to inflation which would yield a good return on your investment in terms of dollars....

 

but as far as investing in currency, the USD could rally in the short term, but Oanda is even telling it's clients to stay out of the currency markets because it's a bad idea atm.....and this coming from a company that makes their money off you doing this...

 

here's a video I watched about this

 

http://www.youtube.com/watch?v=X-DcUvX81Cs...ture=plpp_video

[Brentastic]

FYI - in a large degre bear market that we're currently in (a.k.a. depression) all prices should delfate, commodities included. If you think the stock market is going to tank as I do, you should assume the same fate for precious metals as well as most other commodities. Most people recommend precious metals as a hedge against economic crisis but the reality is that they are really just a hedge against inflation in the long run. The problem with investing in gold/silver at this moment in time is that we are currently in a deflationary depression plus the fact that precious metal prices have seemed to end their most recent parabolic run up. At their current prices, I would only invest in precious metals during a hyperinflationary crisis which should not be a concern in the immediate future, imo. This may be a concern 10 years from now but not now. Just an fyi for those who think otherwise.

[Big Country]

While all interesting suggestions being proposed, they all ignore the needed responses to the questions I posed, and, in my opinion at least, do not qualify as moderate risk investments. Individual stocks, real estate flipping, individual rental properties etc. are all much riskier than what I would define as "moderate".

 

 

ETA: Edit just to reiterate that I classify myself as more "conservative" than most, so factor that in to my definition of "moderate risk".

Edited November 21, 2011 by Big Country

[otis29]

If I"m willing to go with moderate risk (say a 10-20 year horizon), where would you put your post-tax $?

 

My retirement is in one of those "year you retire" funds.

Unless you are either very lucky at guessing on stocks or very knowledgeable of investing, I'd say the "year you retire" funds aren't the worst thing you could house your money in.

[muck]

I'm looking to partner with an investor or two and buy some beef cattle to be run on a few acres in our back.

 

If anyone here is interested, LMK.

[MojoMan]

1. Do you have a minimum 6 month emergency fund built up?

2. Are you maximizing any 401K or other employer based retirement account (457, etc.) you may be eligible for?

3. Are you contributing the max for you and wife to a ROTH IRA?

4. Have you established a 529 plan for any children?

5. Do you have any outstanding debt (mortgage, car loan, student loans, etc.)?

6. Are you planning any major purchases in the relative near future (ie home ,car, etc.)?

 

Really, in order to completely answer the question adequately would require disclosing more personal information than you'd want to do on a public forum, but some basic general suggestions could be made based on the responses to the above 6 questions.

 

Also, for full disclosure, I am in no way a personal finance professional, only someone that has taken an active interest in my own personal finances thus done quite a bit of looking into various options. I am generally far more conservative than many would say is necessary for my age, but willing to take some financial risks.

 

Let's just say that I have some post-tax money that I can invest. I don't see needing the money in the short term but I don't want to totally gamble with it either. Just wondering what Huddlers thought would be places to invest.

[Brentastic]

While all interesting suggestions being proposed, they all ignore the needed responses to the questions I posed, and, in my opinion at least, do not qualify as moderate risk investments. Individual stocks, real estate flipping, individual rental properties etc. are all much riskier than what I would define as "moderate".

 

 

ETA: Edit just to reiterate that I classify myself as more "conservative" than most, so factor that in to my definition of "moderate risk".

Since he mentioned post-tax $$ - I took his post to mean he's looking to dabble in speculation with very little money. Maybe I'm wrong but that's what I was responding to.

 

As most of you know, for a complete risk-free investment (i.e. not losing) - I still have not wavered from good ole' "cash hoarding". Cash will be king over the next 5-10 years and having extra cash will put you in a great position to make long-term investments when everything bottoms out.

[Yukon Cornelius]

I'm looking to partner with an investor or two and buy some beef cattle to be run on a few acres in our back.

 

If anyone here is interested, LMK.

just bought an Angus steer

[Big Country]

Let's just say that I have some post-tax money that I can invest. I don't see needing the money in the short term but I don't want to totally gamble with it either. Just wondering what Huddlers thought would be places to invest.

 

Obviously there is way too little information provided to give a truly accurate answer, as noted in my first response. But, in order, here is what I would do:

 

1. I would first make sure I had an adequate emergency fund stashed someplace safe, CD ladder, higher interest online savings (even though that is only about 1% these days), etc. Depending on stability of job and how much you have in principal in a ROTH you could pull from, somewhere from 6-12 months of living expenses is the minimum I'd suggest

 

2. If you aren't already, maximize any tax deferred retirement space that you can from your employer.

 

3. Maximize your ROTH IRA contributions.

 

4. Put money away for children's education - 529 plan.

 

5. As I dislike debt, but extra towards any outstanding debt to eliminate it, whether a car loan, mortgage, etc. Quite possibly this should be #4 on the list.

 

6. Assuming all of the above has been taken care of/maximized, then you could specualte with some individual stocks, ie put some aside to day trade with, if you want the real estate exposure, perhaps consider investing in some REITs that focus on stuff that interests you (or, if you want real estate exposure in general, invest in a REIT fund or ETF), throw some cash muck's way and buy a piece of a cow. Put some of the cash into a hobby that interests you. If ths is truly "extra" cash that you aren;t going to rely on for long term living expense, put it into something you enjoy that may or may not generate an economic return. Me personally, I think long term chugging away with a well diversified mix of stock/bond funds will see you being just fine. But, that said, if you have covered all of the above items (1-5), depending on the amount, why not put it into something fun for you and the family and take a nice vacation, etc. If it's a lump sum you have, price out on that. If it's a monthly amount you expect to come in regularly, plan on that andsay book a vacation for 6 or 9 months from now when you;ve built up enough to pay cash for the trip, etc.

[MrTed46]

I personally would invest it in RE, specifically rental property. My family has been doing this with success just don't be foolish and research it. I don't like commercial as much as I like resi.

[Brentastic]

Obviously there is way too little information provided to give a truly accurate answer, as noted in my first response. But, in order, here is what I would do:

 

1. I would first make sure I had an adequate emergency fund stashed someplace safe, CD ladder, higher interest online savings (even though that is only about 1% these days), etc. Depending on stability of job and how much you have in principal in a ROTH you could pull from, somewhere from 6-12 months of living expenses is the minimum I'd suggest

 

2. If you aren't already, maximize any tax deferred retirement space that you can from your employer.

 

3. Maximize your ROTH IRA contributions.

 

4. Put money away for children's education - 529 plan.

 

5. As I dislike debt, but extra towards any outstanding debt to eliminate it, whether a car loan, mortgage, etc. Quite possibly this should be #4 on the list.

 

6. Assuming all of the above has been taken care of/maximized, then you could specualte with some individual stocks, ie put some aside to day trade with, if you want the real estate exposure, perhaps consider investing in some REITs that focus on stuff that interests you (or, if you want real estate exposure in general, invest in a REIT fund or ETF), throw some cash muck's way and buy a piece of a cow. Put some of the cash into a hobby that interests you. If ths is truly "extra" cash that you aren;t going to rely on for long term living expense, put it into something you enjoy that may or may not generate an economic return. Me personally, I think long term chugging away with a well diversified mix of stock/bond funds will see you being just fine. But, that said, if you have covered all of the above items (1-5), depending on the amount, why not put it into something fun for you and the family and take a nice vacation, etc. If it's a lump sum you have, price out on that. If it's a monthly amount you expect to come in regularly, plan on that andsay book a vacation for 6 or 9 months from now when you;ve built up enough to pay cash for the trip, etc.

 

I'm not trying to be a dick here but your advice has been sound advice for the past several decades. However, in a deflationary depression not so much. I'm trying not to sound like a broken record either but everyone needs to shift from what "used to work" to "what will work" in a deflationary environment. I feel like my continual "preaching" on the current and upcoming state of the global financial crisis is worth whatever flaming I will get from the few know-it-alls on here (not you) because in the end my forecasts will prove accurate. I'm adamant in my message because if I can help anyone be prepared for what is to come, that's a good thing. Trust me on this.

 

A 529 for instance is a state ran fund for college. We are in unprecedented times and should treat our investments as such. Everyone is going broke, including state and local governments - why would you trust them with your money? I would not trust ANY entity managing my money right now - especially if your goal is maximum safety. At least with a stock (which I don't recommend) you control when to buy and sell. Any investment that relies on some other person, governement, organization or entity to manage it, is NOT a safe investment in these times. At the end of the day, when state and local governments need to default on many of their IOUs, they will only payback the debt that helps the individual lawmakers. They care not about you or me - believe that.

 

REITs are TERRIBLE investments during a bear market.

 

At the end of chapter 16 of Conquer the Crash, Bob Prechter presented a list regarding investments in real estate.

 

 

Some Things To Do

 

. . . you can take the following steps:

 

 

• Make sure you avoid real estate investment trusts, which are perhaps the worst property-related investments during a bear market. Some REITs valued at $100 a share in the early 1970s fell to ¼ by late 1974, and most of them never recovered. REITs are sold to the public because the people who do the deals don’t want to stick with them. The public falls for REITs cycle after cycle. These “investments” hold up in the best part of bull markets, but they are disasters in bear markets.

• If you are in the real estate business, wrap up any sales deals you are working and get out of all investment real estate holdings unless they are special situations about which you know much more than the market does. In general, wait for lower prices to re-invest.

• If you hold a big mortgage on expensive property that depends upon massive public patronage, such as an arena, playhouse, amusement park, arts center or other such facility, consider selling it or subleasing it insured.

• If you are a banker, sell off your largest-percentage mortgages and get into safer investments.

• If you rent your living or office space, make sure that your lease either allows you to leave on short notice or has a clause lowering your rent if like units are reduced in price to new renters.

• If you have a huge mortgage on a McMansion or condo that you cannot afford unless your current income maintains, sell it and move into something more reasonable. If at all possible, join the 1/3 of title-holding Americans who own their homes outright. Be willing to trade down to make it happen. See Chapter 29 for more on this topic.

• If you consider your home a consumption item, and you wish to keep it on that basis, fine. If you are just as happy renting your residence as owning, do so.

• At the bottom, buy the home, office building or business facility of your dreams for ten cents or less per dollar of its peak value.

 

Edited November 22, 2011 by Brentastic

[gbpfan1231]

I'm not trying to be a dick here but your advice has been sound advice for the past several decades. However, in a deflationary depression not so much. I'm trying not to sound like a broken record either but everyone needs to shift from what "used to work" to "what will work" in a deflationary environment. I feel like my continual "preaching" on the current and upcoming state of the global financial crisis is worth whatever flaming I will get from the few know-it-alls on here (not you) because in the end my forecasts will prove accurate. I'm adamant in my message because if I can help anyone be prepared for what is to come, that's a good thing. Trust me on this.

 

A 529 for instance is a state ran fund for college. We are in unprecedented times and should treat our investments as such. Everyone is going broke, including state and local governments - why would you trust them with your money? I would not trust ANY entity managing my money right now - especially if your goal is maximum safety. At least with a stock (which I don't recommend) you control when to buy and sell. Any investment that relies on some other person, governement, organization or entity to manage it, is NOT a safe investment in these times. At the end of the day, when state and local governments need to default on many of their IOUs, they will only payback the debt that helps the individual lawmakers. They care not about you or me - believe that.

 

REITs are TERRIBLE investments during a bear market.

I find these things kinda funny..

[Jackass]

The best advice i can give you, and i'm not trying to be a dick here, is to not listen to anything Brentastic says to do.

[Brentastic]

The best advice i can give you, and i'm not trying to be a dick here, is to not listen to anything Brentastic says to do.

Why is that, Jackass?

 

I've advised maximum safety by recommending to not be long stocks but to be long cash instead.

i've warned of a deflationary depression that becomes more obvious with each passing day.

The stock market has traded net sideways over the last 12 years while inflation has increased - that's a loss if you're long stocks.

The dollar appears to have bottomed in March 2008 and looks to be in the early stages of a multi-year climb.

I've been talking about sovereign government defaults since early 2010 - the news is just now becoming mainstream.

I've warned of a stock market crash that will bring the DOW to at least 5K with a liklihood of 3k or even 1k - this has yet to happen YET.

 

I'd say I've called it right so far with a market crash still in the works. What have you done other than flame me for having an unpopular view on the world economy that just so happens to be pretty spot on at this moment?

Edited November 22, 2011 by Brentastic