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Old 12-29-2007, 08:50 AM
 
Location: Marietta, GA
857 posts, read 4,478,201 times
Reputation: 809

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Kattygirl,
I know that I highly recommended Target-date Mutual funds, and I stand by that recommendation, but what forest beekeeper recommends is also a very good suggestion.
I have bought and flipped houses for decades, and I would put a "For Sale or Rent" sign up on them when I was far enough along with the renovations. I would take whichever came first, a good sale price or a good rent. Over the years I have had many rental properties (and still do) and it is an excellent investment, but some people don't have the stomach for being a landlord. That is something only you can decide. If you are a risk-taker and are willing to put up with the potential aggravation then go for it. If you want something relatively hassle-free then stick with mutual funds.
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Old 12-29-2007, 10:11 AM
 
Location: Forests of Maine
30,722 posts, read 49,538,109 times
Reputation: 19162
I have seen other folks do the single-family rentals. I would never do that.

To my understanding they will NEVER break even. They rarely cover their mortgage payment. Then taxes, garbage, sewer, lighting, and repairs will all come from your pocket.

Only tri-plexes begin to carry themselves. Five-plexes are better. And I have always been able to buy them for cheaper than neighboring single-family buildings of the same square footage.

But again you have cash in fist, so it really does not apply.
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Old 12-29-2007, 02:09 PM
 
Location: Las Cruces
10 posts, read 24,007 times
Reputation: 34
I would consider Vanguard's Target Retirement Fund 2030.

Vanguard has the lowest expense ratios in the business.

The fund is a life cycle fund. They use portfolio analysis theory to determine the optimal investment mix for an investor given the year they want to retire.
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Old 12-29-2007, 02:21 PM
 
Location: Forests of Maine
30,722 posts, read 49,538,109 times
Reputation: 19162
Quote:
Originally Posted by captgwg View Post
I would consider Vanguard's Target Retirement Fund 2030.
It is still stock market investing, which is still pretty close to gambling, any guaranteed return is very low.

And it has no sheltering, so you pay income taxes.

How did Vanguard do during the Enron collapse? Ooops!
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Old 12-29-2007, 07:41 PM
 
Location: Las Cruces
10 posts, read 24,007 times
Reputation: 34
>It is still stock market investing, which is still pretty close to gambling, any >guaranteed return is very low.

>And it has no sheltering, so you pay income taxes.

>How did Vanguard do during the Enron collapse? Ooops!

The Vanguard Target Retirement Fund 2030 did not exist during that period of time.

It's not only stock market investing. It has bonds.

During the Enron collapse period, interest rates were going down significantly, bonds were going up significantly.

Also, there is a foreign component. When the dollar goes down, that component goes up. The dollar has gone done significantly over the last 5+ years.

Most of the gain in such a fund would be capital appreciation and taxed at a capital gain rate only after they are sold.

Diversification is the only free lunch in finance. You get something for nothing. The life cycle funds do this for you without having to understand the theory behind it.

The fund re-balances as the target date approaches for you automatically.
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Old 12-29-2007, 08:11 PM
 
Location: Forests of Maine
30,722 posts, read 49,538,109 times
Reputation: 19162
Quote:
Originally Posted by captgwg View Post
... The Vanguard Target Retirement Fund 2030 did not exist during that period of time.
True, but Vanguard did exist, as I said, and it was hammered.


Quote:
... Most of the gain in such a fund would be capital appreciation and taxed at a capital gain rate only after they are sold.
Ouch that must hurt.


Quote:
... Diversification is the only free lunch in finance. You get something for nothing.
Really for nothing? I can invest in Vanguard for nothing.

I don't have to put any money into it, and it will gain profit for me?

That is so cool!

And it's sheltering? Tell us about it's sheltering.

And the guaranteed return too, what about that?



I have friends who have put money into Vanguard funds before.
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Old 12-30-2007, 10:44 AM
 
Location: Marietta, GA
857 posts, read 4,478,201 times
Reputation: 809
Quote:
Originally Posted by forest beekeeper View Post
I have seen other folks do the single-family rentals. I would never do that.

To my understanding they will NEVER break even. They rarely cover their mortgage payment. Then taxes, garbage, sewer, lighting, and repairs will all come from your pocket.

Only tri-plexes begin to carry themselves. Five-plexes are better. And I have always been able to buy them for cheaper than neighboring single-family buildings of the same square footage.

But again you have cash in fist, so it really does not apply.
I beg to differ. I wouldn't have rented them out if they had a negative cash flow. Mine had anywhere from $150 month to $500 per month positive cash flow, so when I had five of them at the same time they were producing about $1,500 per month. Sometimes the tenants buy them, and sometimes I choose to not renew the lease so that I can try to sell it (depending on the market) and then I am able to take the profit from the renovation.
I am down to two houses now because I don't plan on staying in this area. When I decide where to relocate I will start again because it is a great source of extra income for my retirement.
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Old 12-30-2007, 11:09 AM
 
Location: Forests of Maine
30,722 posts, read 49,538,109 times
Reputation: 19162
Quote:
Originally Posted by NorthmeetsSouth View Post
I beg to differ. I wouldn't have rented them out if they had a negative cash flow. Mine had anywhere from $150 month to $500 per month positive cash flow, so when I had five of them at the same time they were producing about $1,500 per month. Sometimes the tenants buy them, and sometimes I choose to not renew the lease so that I can try to sell it (depending on the market) and then I am able to take the profit from the renovation.
I am down to two houses now because I don't plan on staying in this area. When I decide where to relocate I will start again because it is a great source of extra income for my retirement.
Very good!

Dont forget the tax sheltering too
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Old 01-01-2008, 01:00 PM
 
4,948 posts, read 16,546,726 times
Reputation: 2866
I would either open a roth with Vanguard or fidelity. Then invest in mutual funds they have. You also since you are young have the roth money buy stocks in VZ or ATand T
since they pay a good dividend which would be reinvested tax free.
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Old 01-01-2008, 06:28 PM
 
Location: Nebraska
4,235 posts, read 7,278,410 times
Reputation: 6705
A lot of how to invest your money will depend on what kind of skills and knowledge you have. If you are married and your husband/wife has skills that complement yours you are doubly fortunate. For instance if you are a carpenter or understand how to use hand tools and power equipment investing in "fixer uppers" can be lucrative, especially if the better half can handle the property management and bookkeeping.

If you want to invest that $10,000.00 in the stock market go to your local library read everything you can about investing. Anything by Warren Buffet is a good start. Be very cautious about getting advice from anyone who charges a fee for advice, unless that fee is a percentage of a profit that he steered you toward. Anyone else is just a salesman and his interests may be different than yours. Online stock investing can be very lucrative IF you learn how to do it.

GL2
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