A little bit of everything and am waiting on more real estate opportunities.
In the safe, as nothing but cash
Stock market
401k or other retirement specific savings
Real estate investing
Gold and other precious metals
Land or home improvement for personal use
Paying off ALL debt
Guns, ammo, and prepping
A little bit of everything
Other
A little bit of everything and am waiting on more real estate opportunities.
-Seconds Count. Misses Don't-
Originally Posted by 0ddl0t
If you really want to go the set it and forget it route, Vanguard offers target retirement date funds that adjusts the allocation of stocks and bonds over time (favoring stocks when you're younger and bonds as you get closer to retirement). If you really don't know or want to know what you're investing in besides something "safe", these are pretty good choices.
For people waiting on "real estate opportunities" - are you planning to purchase in cash only?
It depends on interest rates and what I can do with the money. I have a mortgage at 2.25% and am earning more than 4% on 28-day T-Bills. So I pay the minimum on the mortgage. If the mortgage rate was 10% and risk free savings were 8%, I would pay in cash. In general, debt for investment properties makes sense as long as one can cover the debt service if you lose a substantial percentage of your tenants or need to invest significant funds due for repairs or upgrades.
Before we borrow, I make sure we can cover the debt service for five years with no income. Other people borrow with the intent of using the equity in one to fund the next one or two. Works well until the income stream evaporates for a couple. I rather have one or two very nice properties than ten or twenty lower-class properties. Less hassle even with a good property manager.
That said, after COVID, I will never be a traditional landlord again. Sticking to short-term rentals only even though the vacancy rate and client checking are issues. Trying to build up repeat visitors (annual vacations) to minimize client turnover and risk. Works here because this is a destination.
I'm not. If a rental property can't reliably pay for its own 7.5% investment mortgage I don't see it as a compelling investment.
In my investment area, single family homes are only offering ~6% gross margins (e.g. $600K home that rents for $3K, $400K home that rents for $2K, etc). And that's gross - subtract maintenance, taxes, & insurance and you'd be lucky to get 4%. Why bother using your cash to buy yourself a somewhat risky part time job that offers less return than a certificate of deposit at your local bank?
On the other hand, building an accessory dwelling unit (ADU) next to an existing rental appears to offer much better margins. A $200K adu added to that $600K home ought to rent for an additional $2,000, giving a 12% gross margin on the ADU. Same goes for a $75K garage studio conversion on a $300K house that'll rent for $750. Still not worth buying the house at today's prices, but worth considering if you have existing rentals - especially if your state/county has grants.
Just keep in mind that some lenders won't finance an ADU unless you refinance the existing home with them too. This might be a deal killer if you locked in a super low rate in prior years...
Maybe.
The conventional wisdom around rental properties seems to be that you should never pay cash, and if the rental income can’t beat the mortgage rate for the property then you shouldn’t buy it. Bearing in mind that interest rates for investment/rental properties are higher than for primary residence.
Lots of folks have also been getting into the “short term rental (e.g. Airbnb) thing, to the point that many markets are saturated or glutted and they can’t cover their costs.
A counterpoint that I’ve been considering is multiple long-term (annual lease) rentals paid cash with a property manager to take care of the tenant issues and a realtor to take care of keeping it filled. I’ve done a bit of the math and I could get pretty good returns on that in our area, particularly if you “buy low”. AND have the benefit of properties owned outright that can be sold at peaks.
There’s something to be said for knowing that you own the thing (taxes and insurance notwithstanding).
We own my MIL’s house outright. Most people would tell you that’s stupid and I should mortgage it and invest that money to get a higher return… ok, but I’d still have to pay that mortgage, with what money exactly? (we don’t charge her rent). I think we paid it off just before Covid as well, and I’d bet we’re doing better in appreciation than we would have done in the market over that time. If at some point we start collecting rent on the house, and/or the market is returning or poised to return good numbers, and the interest rate on a rental mortgage is lower than the investment returns maybe we’ll refinance and invest instead.
Does the above offend? If you have paid to be here, you can click here to put it in context.
You're on to something Rob.
People are about to get a hard lesson on protecting the principle at all costs. Something that got learned the hard way in the 1930's (as well as every other bubble).
I highly recommend -
https://www.amazon.com/Great-Depress.../dp/1586489011
When it comes to learning about gold, I give this advice that I learned over the years -
Most of the people talking about gold are focused on one of two things - gold as an investment (like stocks, bonds, etc.) and gold as a short term trade. Trading is the new gambling to the younger people. Try to find people that look at gold only as a long term savings, and a way to protect your purchasing power. These are the people that understand gold, and monetary history.
https://fred.stlouisfed.org/series/CUUR0000SA0R
Last edited by Clay; 03-24-2023 at 08:54 AM.
Personally I just keep plowing most of my money into index funds, and hold back a relatively small amount, say 10%, for snap buys. I recently did well on TSLA, for example, because I figured there would be a rout and rally after the Twitter purchase. I still think it's overvalued but I don't care because I was making a short term bet that paid off. I should have bet bigger, but I did all right.
In a sense most of my money is in real estate, but it's in my house and my cabin, and I don't plan to sell either. But locally, prices are only back 5-10% from the peak six months ago, and in some sense it's nice to look at the valuation on paper. There's always the possibility things will get so fucked here that we'll relocate to a smaller market in the US - real estate there tends to fluctuate more than here, and so potentially we could sell here and do okay leaving for a very distant market. But you couldn't really make money moving around within a reasonable distance from here; I already live in a town of 8 or 10 thousand with no real economy, and the average home price is now probably about 750k. I'd have to move somewhere inaccessible to save much, and that wouldn't be fair to my kid.
I'd like to erase all my non-mortgage debt this year and probably will - there isn't that much but I did end up a bit behind with Erin not working for a few years there.
This is a thread where I built a boat I designed and which I very occasionally update with accounts of using it, which is really fun as long as I'm not driving over logs and blowing up the outboard.
https://pistol-forum.com/showthread....ilding-a-skiff
Yes. I buy rentals and farmland cash because I can.
I’m throwing money at VOO as I feel like.
Ally is offering a 4.35% no penalty CD
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